Hey Siri, play me some Beats

“Apple started their annual World Wide Developers Conference in San Jose with a bang yesterday – Apple Special Event. June 5, 2017. A whole host of new products. The opening is hilarious. It takes place in a world without the luxuries of the apps and the iPhone. A world too wild to remember, yet that was a little over ten years ago. The first three minutes intro of the opening note is what I am talking about.”


To market to market to buy a fat pig Stocks in Jozi recovered off their worst levels, nearly ending the day flat, a marginal decline on the day. Down 0.04 percent by the close, around 20 points worse off. Financials, retailers (SA inc.) were the only stocks that managed to get ahead of the pack, in large part due to the improving currency. The Rand strengthened to within two percent, said Bright, since the laying off of the last finance minister and a cabinet reshuffle the last time around in March. Session end the stocks in the red, at the bottom of the board so to speak, were the likes of Glencore, Sasol and Intu, at the top of the boards, comfortably in the green, were the likes of Amplats, PSG and Redefine. No real patterns there! Humans love pattern recognition, which is why they love looking at charts and predicting what is going to happen next. Lines on a graph do not represent reality.

Telkom released results yesterday, they are in transitional mode (still) where they are moving away from their legacy businesses, fixed lines and even ADSL now (true story, going backwards there) towards fibre to the home and mobile data. And of course cloud storage etc., Telkom have been pretty aggressive on the pricing of these packages. They have the installed infrastructure in order to achieve this, there is just one caveat, this time there is a whole lot more competition. Vumatel and “friends”. Many do collaborate and piggyback off each others infrastructure, the pricing power as a result of the monopoly (that Telkom had in the past) has meant that the business has had to evolve quickly. Shareholders who have gone the distance from the day of listing way back, and the subsequent unbundling of Vodacom. You would have done well to go to sleep and just hang in there.


Across the seas and oceans, stocks in New York, New York bounced in and out of positive territory, ending in the red on the day. And by extension, no new record. I suppose that we have become so used to new records, that we may be in for a quiet period ahead of the next round of earnings season. Which is July. Northern hemisphere summers are always a little lazy for the markets in terms of volumes, in many territories, school is out there! Some places differ more than others, refer to this list – Summer vacation. Two to three months in the US. No wonder you can get a steady and awesome job as a kid. Six to seven weeks in the UK. Germany, as the Germans do, exactly six and a half weeks according to Wikipedia. In Greece, as a kid, you get three months to drive your parents nuts. June 15 to September 11! Yowsers, that is a long stretch, I suspect that there is nothing else during the year.

Session end the Dow Jones Industrial Average shed one-tenth of a percent. The broader market S&P 500 lost 0.12 percent, whilst the nerds of NASDAQ gave up 0.16 percent by the end of the session. A slide in the Apple share price impacted on these indices, see below. Alphabet (Google) cranked through 1000 Dollars a share, as a result earlier share splits (in which you got two separate share classes), the stock been there before. The correct statement is Alphabet Class A shares (with the ticker GOOGL) passes 1000 Dollars a share for the first time. The other share code, GOOG, has passed 1000 bucks a share before, before the split to C class (reserved for compensation) and the A class shares, that have 10 times more votes per share. It is complicated, I know.


Company corner

Apple started their annual World Wide Developers Conference in San Jose with a bang yesterday – Apple Special Event. June 5, 2017. A whole host of new products. The opening is hilarious. It takes place in a world without the luxuries of the apps and the iPhone. A world too wild to remember, yet that was a little over ten years ago. The first three minutes intro of the opening note is what I am talking about.

No music on your iPhone, no maps, no ability to share anything, nobody to tell that you just ate a whole pizza by yourself (many people do not care too much about that). It is quite cool that Tim Cook introduces a 10 year old developer from Australia, who started coding when he was only six. He had made the effort to be at the WWDC. Five apps on the App store already, Cook met him the day before! Another app developer clocked in at 82 years of age, she hails from Japan and has published an app already on the app store.

Tim Cook announced a whole host of products, tvOS (TV operating system, Amazon coming to the TV app, Amazon Prime Video), a new iPad Pro, a new operating system across their devices, iOS 11, a new iMac, a new MacBook pro and MacBook (and a new macOS), an iMac Pro (for business and gamers), watchOS 4 (more relevant information shown to you, a dynamically changing during the day watch as well as big changes to the activity segment), an upgrade to the App store and most importantly (it seems to be attracting the most attention) the HomePod. The HomePod is a device that sits in your home and enables you to use Siri a whole lot better. This is a speaker system with Siri, not too dissimilar to the Amazon Echo. Amazon have sold around 11 million units of Echo (with Alexa), they are very popular for shouting and asking questions. Siri, for reference point, is used by 375 million devices.

The HomePod is double the price of the Amazon Echo, starting around 349 Dollars per unit. The WSJ goes with – Apple Unveils Smart Speaker Called HomePod. Barron’s goes with Apple’s ‘HomePod’ a Winner, Says Loup’s Munster; Major Siri Update Later This Year?

Gene of course worked at Piper Jaffray for years and years and covered Apple. He had the following to say about the Augmented Reality – “That was a huge deal; I think the demo was better than any AR demo I’ve ever seen. I think it just shows they are putting the hammer down around AR.” Recall that we suggested that Apple would get to Augmented Reality in a big way. Apple is a perfection of existing products.

CNet had some cool reviews – Apple already controls your life, now HomePod wants your home

Ironically this release of all these new products and software updates was on the same day that the stock received a downgrade from Pacific Crest, an analyst there, Andy Hargreaves downgraded the stock to a sector-weight holding and lowered his share price to 145 Dollars. There is, as you may expect, an analyst rating website, TipRanks. You can check Andy Hargreaves’s Stock Coverage.

Andy has been really good and very accurate. So what do you do as an owner of the business? Nothing. We plan to own this business for a long, long time. Tim Cook is right, when he left off at the end of the presentation, he said “all is good at Apple”. He is right. We continue to own what is a dynamic business, there are going to be tons of products in the future, without a doubt. Very pleased with these software and hardware updates, as well as the “new product(s)”. Remember that the iPhone is still there king of sales here, the much anticipated new release must hit the mark for the users.


Linkfest, lap it up

Did you know that more retail jobs have been lost in the US (formal jobs at Macy’s and the like) since October last year, than there are in the WHOLE of the coal industry in the US. Food for thought, I know. How about this angle though – Eliminating coal could save more lives per year than the entire coal industry employs.

China have a weird energy problem too, and it has to do with renewables, times of year and unable to use all of it. China has made massive strides in climate change technologies – Why China’s wasting huge amounts of cleanly-produced electricity and how to fix it.

This …. “Patience, a long-term focus, and avoiding the fads are key for successful investing. Some of the most successful stock investors of the last few decades in the United States aren’t known for finding the latest and greatest”Best Habits of Highly Successful Investors.

Talking about those retail jobs that are being lostAmerica’s Dying Malls Weigh On Retailers. Those few lines in there: “Millennial consumers are more attracted than their elders to cooking at home, ordering delivery from restaurants and eating quickly, in fast casual or quick-serve restaurants. Mall traffic has slowed.”


Home again, home again, jiggety-jog. Stocks are lower to begin with here in Jozi. A marginally weaker Rand, new 12 month low for Tsogo Sun I see.

Sent to you by Sasha, Byron and Michael on behalf of team Vestact.

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