Last night, US markets posted their fourth straight session of gains. Shares rose broadly, with ten of the S&P 500’s eleven sectors ending in the green. We are on track for a solid week of positive returns, despite some mixed economic data. Long-term investors are growing more optimistic.
In company news, JSE-listed Mediclinic shares rose 8.6% on talk that its buyout by Remgro and offshore investors might go ahead at a raised price. Elsewhere, shares of cancer biotech company Seagen rose 1.6% after it was reported that Merck is in advanced talks to buy them out for over $40 billion.
At the end of a pleasing day of trading, the JSE All-share closed up a big 3.27%, the S&P 500 climbed 1.50%, and the Nasdaq rose 2.28%.
Our 10c Worth
One Thing, From Paul
Yesterday’s resignation of Boris Johnson reminded me of the Latin phrase “Sic transit gloria mundi”. The direct translation would be “Thus worldly glory passes”.
The point is, fame is fleeting. How many prominent celebrities, athletes and heads of state are now gone and forgotten? The answer is, almost all of them. I grew up in the era of Liberace, Pele, and Margaret Thatcher. My parents used to get excited about Elvis Presley, Rod Laver, and JFK. At the height of their popularity, it seemed that these individuals would be remembered forever. Most are now only known to historians, and rarely mentioned.
Boris Johnson rose to the top, but messed it all up and will probably sink into obscurity.
Friday advice: don’t be an attention seeker. It’s better to be well-respected over a long period, than to flame out trying to become famous.
One of our readers reacted to a link we posted this week about home ownership and property investing, and he and I exchanged some interesting insights. The blog post that we linked to was rather flawed, but made the point that your primary residence shouldn’t be considered an investment. I agree with that because other than a period in the early 2000s, when property prices exploded, housing prices in South Africa have only grown by inflation.
Your family home is best viewed as a comfortable place to build memories with your loved ones.
I ran the numbers on renting vs home-ownership a few years ago. I assumed that the money saved by renting was invested in the stock market. In my analysis, home ownership only made sense if you stayed in the same property for longer than 10 years. The costs of maintenance, buying and selling add up quickly. Estate agent commissions and transfer fees are significant, and the bigger the property, the higher the transaction costs!
My MBA thesis was on creating a local property company. My conclusion was that if you want to invest in property, you need to do it on a large scale. Owning 1 or 2 flats doesn’t work. The return doesn’t justify your effort, and there is an increased risk of a having dud tenant.
For most people, owning a house is good for their finances in the long-term, because having a home loan results in forced monthly saving – if you don’t pay your mortgage bond, the bank will boot you out.
However, if you have excess capital to put to work, putting it into residential property and only keeping up with inflation is not great. You are better off investing in the stock market.
Apple announced a ground-breaking new security feature for iPhones called Lockdown Mode. This is to protect high-profile users such as activists and hedge fund managers who may be personally targeted by state-sponsored hackers.
Lockdown Mode turns off several features on the iPhone in order to make it less vulnerable to spyware, significantly reducing the number of features that attackers can target. This mode limits threats in messages, web browsing, Apple services, wired connections with other devices, and configuration profiles.
Apple said that it would pay up to $2 million to “ethical hackers” who can find security flaws in the new mode. I guess it’s time to organise a hackathon.
Linkfest, Lap It Up
Starvation and malnutrition continues to be the biggest problem in the world. Today, approximately 866 million people live in extreme poverty, this figure represents an increase of about 100-200 million from before the pandemic – Giving people cash is usually better than shipping them food.
The Rand Club has gone through a revitalisation. I (Michael) had breakfast at the Rand Club recently, I was surprised at how easy it was to get there and back from Rosebank – Why I Became a Member of the Rand Club.
Asian markets are flat this morning. Stocks in Tokyo fell after the horrific shooting of former Japanese Prime Shinzo Abe at a political event in Nara.
US equity futures are lower in early trade, but Wall Street will probably wait to take direction from the monthly US employment report, out an hour before the opening bell.
The Rand is at trading at around R16.75 to the US Dollar.
Have a great weekend.
Sent to you by Team Vestact.