All Time Why’s


To market to market to buy a fat pig. A new record high for the local market, we are now closer to 56 000 than we are to 55 000. Last night our market closed up 0.9% to finish at 55 685. The 12 month high list is growing in companies which is always nice to see. Not only does it contain two South African focused retailers, Clicks and Dischem, it now also includes two banks! Capitec and Standard Bank. The two most SA Inc sectors, retailing and banking have a showing on the 12 month high list, despite our recession and not great growth prospects for at least the next few years.

Standard Bank makes some sense to me, the market is re-rating the company to now trade on a P/E of 11, still lower than First Rand but higher than Nedbank and Barclays Africa. Clicks trades on a P/E of 30 and Dischem even higher at a P/E 40. Granted that Dischem had many moving parts in their only set of numbers so far, the market is still pricing in some big growth for both companies. If we have zero/ negative growth in South Africa, the only growth will be coming from taking market share from other retailers. Who though?

For comparison, Woolies trades on a P/E of 15. They have a loyal rich customer base and half the business is based in Australia who are not in a recession (GDP: Australia grabs record for longest time without a recession). Woolies are also launching their food offering in Australia, which looks amazing. See picture below. The photo comes from Zeenat Moorad, there are more great pictures on her Twitter timeline, go have a look.

New York, New York was mostly lower yesterday; the S&P 500 was down 0.22%, the Nasdaq was down 0.35% and the Dow slightly up 0.08%. Just before the market close news broke that the investigation into Russian interference in last years US election has changed gear, with the lead investigator upping the ante (Mueller’s latest move in the Trump-Russia probe may foreshadow a ‘large-scale series of prosecutions’). US markets had a very noticeable drop on the news. Political uncertainty is not good for markets short term but in a month day they will have forgotten about it and be back on their very way.


Linkfest, lap it up

One thing, from Paul

As a Barcelona fan, I’m saddened by Neymar’s move to PSG. No man! Here is an interesting analysis of trends in player remuneration in European football. The Brazilian wizard will earn EUR 600 000 a week (after tax) – Neymar Is Less Greedy Than He Looks


Byron’s Beats

How cool is this building that has just been built in Taiwan. 23 000 trees growing off the side of it will absorb 130 tons of carbon a year. There is also a lot of excitement about growing food on the sides of skyscrapers. Although it is still early days, urban forests and farms are becoming more and more a reality – A smog-eating twisting tower that features luxury apartments will soon open in Taiwan – take a look inside

For all you athletics fans, Mo Farah will be racing in the 10 000-meter and 5000-meter in London tomorrow for the last time. Nike have made a special addition Nike Air Zoom Pegasus to celebrate this amazing athlete. But don’t despair, he wants to give long distance running a go. I wouldn’t be surprised to see him on the podium at a few big marathons – Mo Farah takes on the London track one last time


Michael’s Musings

Here is a look at what it takes to be in the top 1% in the US by income, what I found most interesting is to see how quickly incomes rise while you are in your 30’s – How much money you need to earn to be in the top 1% at every age. Remember that to be in the top 50% by wealth globally you only need an NAV of around $2 000.

Have you have ever wondered what our cities will look like after we are gone? Now you can get an idea – Nature is Reclaiming Fukushima’s Abandoned Areas. All that is missing is a few zombies now?

Newspapers are one of the industries hit by the emergence of the internet. The New York Times is showing that surviving in the digital age can be done – The New York Times Passes 2 Million Digital Subscriptions. See the strong up tick in 2016? That is when Trump started criticising them, showing that even bad publicity is good publicity.

Infographic: The New York Times Passes 2 Million Digital Subscriptions | Statista You will find more statistics at Statista


Bright’s Banter

A Ritholtz Wealth intern by the name of Tommy Tranfo wrote an interesting article on Barrons basically outlining why millennials are afraid of the stock market compared to previous generations. This triggered a rebuttal by his colleague Mike Batnick, giving us millennials lots of empirical evidence to why we should invest in the stock market and why we should start now – A Millennial’s Rebuttal


Home again, home again, jiggety-jog. The Rand has been weakening during the week, going from $/R 12.96 last week to currently $/R 13.37 and from EUR/R 15.31 to EUR/R 15.90. A weaker Rand has been good for our dual listed stocks and large multinationals that dominate our Top 40. The market moving news today is the monthly Nonfarm Payrolls and unemployment number from the US. The unemployment rate is forecast to drop further to 4.3%. The all share is off to a green start this morning, hopefully the Proteas later today will have the same weekend. We haven’t lost a test series in England in 19 years, no need to start now.


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