Prime Time

There was a great deal of focus on Amazon, it was after all Prime Day. Prime Day applies to “Prime members”, you pay a once off annual fee (annuity income for the company) in order to get access to same day delivery in urban areas, as well as other perks.”


 

To market to market to buy a fat pig Another quiet day here in Jozi, at least it appears so at face value. There has been selling of emerging market assets. That includes us. Financials were under a bit of pressure, down around four-fifths. There were new 12 month lows for Woolies, Famous Brands, Pioneer Foods, Life Healthcare ….. that is a broad based sector diversity, food and clothing sellers, restaurants, hospitals and food processors. In the up column were the Rand sensitive stocks and most especially the miners, bouncing back after a few days of commodity prices selling off.

There was very little corporate news on the day, Sygnia, the index tracker business announced a rights issue. They have managed to grow assets under management in a tricky environment. In fact, their business may well be directly related to the JSE “doing worse” or finding themselves in a shifting environment. I suspect that for private clients interested in the market, they should definitely engage with service providers like ourselves, those who are passive savers should look to the cheaper options like index trackers. Expensive models offered by the savings industry are looking more and more like dinosaurs to me, way too expensive and opaque on that score too. Plus, when you try and extract your funds, it is too complicated.


 

Stocks in New York, New York closed mixed after a pretty wild ride involving the US president’s son who was implicated in email scandals. Sounds familiar, right? Other than the outrage from the chattering classes and some shrugs of shoulders, it seems that this is what Mohamed El-Erian meant about the new normal. The new normal is that nothing shocks you anymore and you are not amazed that there are few or no repercussions.

By the close of the session, where the broader market had been down half a percent and up during large parts of the day, the S&P 500 closed shop down nearly one-tenth of a percent. Strange, but true, bearing in mind that the Dow closed half a point (which translates to 0.00 percent) higher and the nerds of NASDAQ rallied just over one quarter of a percent. Stocks in the winners segment included Facebook and Apple, as well as GE and Alibaba.

There was a great deal of focus on Amazon, it was after all Prime Day. Prime Day applies to “Prime members”, you pay a once off annual fee (annuity income for the company) in order to get access to same day delivery in urban areas, as well as other perks. I did a quick search on my Amazon profile and I got the following “Prime members enjoy” benefits. Cardmembers earn 5% Back at Amazon.com with a Prime Credit Card. Earn 2% rewards on your debit spending with Prime Reload. Get FREE Two-Day Shipping on over 50 million items. Enjoy unlimited instant streaming of thousands of popular movies and TV episodes. Over a million songs. Unlimited. Ad-free. Now FREE with Amazon Prime.

And the list goes on a little, including a free book (with a “return”) every month. It may well be worth it, provided you live in the right places to benefit from all of the specials. 11 Dollars a month. That almost sounds like being on the good old fashioned library subscription (books and magazines) and having Netflix, and being inside of the special group of DHL, and having a huge song library, and storage space as well as having a reward program. Seems like a steal, right? Once you are “in”, their moat is dug. They (Amazon) then sell you everything. Like forever, and like Apple music, once you are “out” of the circle, you lose access to all these “great” services. The next question arrises, do you need an Amazon Echo that is 50 percent off currently? Yes, for Amazon Prime members, they get a price of 90 Dollars. By the time you read this, the Amazon prime deals will be over.

I am pretty sure that Amazon will once again be in a position to quickly announce what and how the day was received by all of the customers on Prime. Whilst it is NOT clear the exact numbers of Prime members, according to this article from yesterday – Amazon Prime Members Now Outnumber Non-Prime Customers – there are roughly 63 million Prime Members. That is according to the Consumer Intelligence Research Partners (CIRP). In a twist of irony, the CIRP website is devoid of any free content, you can find that via the Huff post – Michael R. Levin. Give him a follow.

I like Amazon. It is a disruptor and forces us to focus on things that are new. And things that we don’t yet know about. And Bezos is 53 years old. You get the sense that he is just getting started on part of a huge plan to disrupt retail and consumption. We continue to hold what is a wonderful business, they are going to continue to spend like crazy in expanding their offerings.


 

Linkfest, lap it up!

The absolute size of this building is impressive, it is around 5km of building – Hitler’s 3-mile-long abandoned Nazi resort is transforming into a luxury getaway.

We posted a link to a minimum wage study in Seattle a few weeks ago, here is Barry Ritholz take on it – The Overhyped Seattle Minimum-Wage Disaster.

What could go wrongIn China, Shoppers Buy Bad Loans Online With Their Groceries.

Ouch! Car sales of Hyundai dropped 64% in China due to rising tensions between China and South Korea.


 

Home again, home again, jiggety-jog. Stocks have started mixed here, early days for now! Tencent was up, that counts for a lot. We still think Naspers looks quite cheap, relatively.


 

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

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