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Shapiroworld by Strictly Business · Strictly Business

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You're listening to Strictly Business Podcast with Lindsay Williams.
0:05
It's Monday, so it's time for Shapiro World with David Shapiro from Sassfin
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Securities in Johannesburg.
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President's Day in the United States, David.
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The only thing we've got coming out this week, data-wise, which might affect a lot
0:19
of your portfolio entrants,
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is...
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What have we got?
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We've got PCE, that's Private Consumption Expenditure, which is a sort of inflation
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gauge.
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And we've also got the minutes from the Fed meeting.
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Otherwise, it's going to be a quiet one, I think.
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Yeah, look, I think, you know what happened?
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The inflation numbers coming out at the moment are not having the pull or exertion
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that they had in the
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past, as we saw with the job numbers.
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I think it's pretty stable.
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It's neither dramatic either way.
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Even though there were more job numbers in the United States than anybody expected.
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But, you know, they were health workers or something around that, which could be
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seasonal.
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I don't think anybody got excited.
1:01
I think we're in, you know, I just think we're in an off season.
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That's how the best I can explain.
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Yes.
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Nothing really happening that's market moving.
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I think people get annoyed.
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They get a little irritable.
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They get tired.
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So you find this churning taking place.
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And I don't think it's a bad thing.
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I think we need to go through this for a few months and gather momentum again.
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Some people would say that there was an influence from the inflation data.
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It came out at 2.4%, which is, I don't know,
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it's a percent or two lower than I thought it would be after the tariff story last
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year.
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But it's not.
1:41
It's down there.
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And by hook or by crook, Mr.
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Trump has got it there, and he's celebrating it, David.
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but some people might say Well, it's not because of Trump's policies.
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It's because the economy is in the doldrums and there isn't the domestic
1:59
demand to push prices higher,
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which is something that you get, for example, in China, where there's
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deflation, especially with their PPI.
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But maybe you could look at it that way if you're a pessimist.
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I'm with you there.
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I think we need dramatic momentum in
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economies.
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We're not in that kind of...
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area at all you know yes uh it's economies are bumbling over and i keep looking at it
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and i and and that's why i like this off season because um during this off
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season everyone oh you know you've got to get out to united states you've got to go
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into europe i say why why must we go into europe
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you know what's what's happening there excuse to talk about yes david so we go on
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no
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no I'm not...
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I'm not knocking you.
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I think you're in the one bright spot in Europe, which is Holland or Netherlands.
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Yes.
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You know, they've got great companies there because they're the only company.
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They've got ASML and Bessie and these various other bookings.com.
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They've got quite a few high-tech businesses.
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It's a decent hub.
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It's probably the only hub in Europe.
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You know, everything else is pretty dull.
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And, you know, there's nothing there that excites you.
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Yes, there are some very good old companies.
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I love the luxury businesses and so on.
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But they can't compare with what's happening in the United States,
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the amount of money that's being spent there.
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Oh, yeah.
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Absolutely.
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And the amount of money that's going in there.
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Yeah, I mean, if you're anyone.
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China's the only opposition.
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You know, China is the only country that's doing it, whatever.
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So I keep saying, just stop.
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Take a step back.
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America's going to grow.
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It might not grow at the kind of pace that we want it to grow,
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but it's certainly not falling in a heap or going into recession.
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But so we just got to wait a few months for this to all blow over,
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all this talk about the disruption that AI is going to cause and the number of jobs
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and the
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number of companies it's going to destroy.
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Okay.
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You know, yes, I'm sure that, listen, you know, I use AI and there are a few of us
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that do it,
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but I would never attempt to introduce a, you know,
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to go introduce it into a business without support from people who really know.
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Did you see two AI professionals who, one resigned from her job.
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I can't remember the company she was at.
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Anyway, one of them, it doesn't matter at the moment.
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She resigned and she was on the BBC and she said, I'm worried about AI.
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So I got out.
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It's exciting.
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I use it and everything.
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But she said the way it's going and she listed it.
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I wasn't listening, of course, but I've got her number and I'm going to try and
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get her on the show with you and Viv.
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But there was another one as well.
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An article that came out on X and another chap that's left AI and was sounding
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warnings.
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Now, I'm just talking.
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from a headline point of view, they were warning about AI.
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I don't know why I've got to go into it, but you're the sort of person that does go
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into that.
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Does that sort of feed into the bubble theory of the stock market numerations
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that we're
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seeing on the NASDAQ, for example?
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The high valuations.
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Oh, you mean, no.
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You mean that we're going to be able to do a lot of tasks without the number of
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people?
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No, no, I'm saying I didn't.
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This is it.
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I'm going into this discussion without having done my research.
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I'm saying that two people from the tech businesses that are behind AI have
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resigned and they've been public with their resignations and talked about why
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they've left because they see AI going in the wrong
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direction.
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In other words, it's going to harm you.
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humanity, et cetera.
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Does that then feed in, as I said, to the bubble theory on the stock market?
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No?
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No.
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No, I think we needed a bit of a sell-off.
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The bubble theory didn't cause a sell-off, so now we've gone 180 degrees in the other
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direction,
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and it's now going to be disruption.
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It's going to disrupt all those kind of companies who won't need
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uh businesses for example like msci like s&p global and and and so on yes i'm sure
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there's going
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to be some of that happening but these companies can now use a uh they can use ai
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themselves and
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perhaps hone in and and uh make their whatever they're going to do speedier and
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more efficient but i don't
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think it's going to completely replace them i can understand and and i'll put you
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in a situation you want to go look for a new
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house So before you would go to the site of some real estate or real estate agent.
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Now you can bypass that and go directly into ChatGPT.
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We'll give you all the houses around.
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But you still want authentication.
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You still want to say, oh, yeah, we had someone visit us and here's the house and
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here's the room.
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It's going to take a lot more to change that.
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And I'm not buying that these businesses are going to collapse.
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It's just going to help people along the way.
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You know, I have lawyer friends who tell me how they use it, you know, mainly to
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help them write.
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Sometimes they can't quite clarify a point.
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Sometimes they don't understand.
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So it does reduce the time that you would have spent on something.
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You can still charge the same price, you know that.
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Yes.
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but you're doing the work and half the time that's that's very true unless
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somebody says listen i know this is ai so i'm not
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going to pay you as much people that can happen i mean i've rejected i've whenever
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i see something that's come to me that has clearly been
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written by something
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that's not human i say thanks very much for thank your ai chat bot for doing this
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for you can do
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that for you i always say that just just because let me just type something in
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David, there's a bit of a noise in the background here.
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Recently, sorry, this is Copilot asking me, recently spoken publicly,
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I'm putting in here, about AI.
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Okay, because they were very high profile, these people.
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Viv would know.
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He's a bit of a nerd.
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He's a nerd.
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He's a total nerd.
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He reads everything.
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And the worst thing is he remembers everything he reads.
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I know, he's so clever.
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So, David, we had the State of the Nation address as well.
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And I must say that a cynic like yourself, because you're not a cynic, you're a
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realist.
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I am.
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You would have seen that and you would have said, I've heard it all before.
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Is that right?
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Exactly.
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It is.
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You know, I don't think we want PowerPoint presentations anymore.
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We honestly need action down at the ground.
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and Lindsay,
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I don't think you would appreciate what's happening in Joburg or in South Africa,
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where there's no water in the taps.
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We're in a fortunate situation here where we've got these JoJo's, you've got four
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tanks.
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So if there is any kind of breakdown, you know,
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we're at least OK for maybe three or four days before maybe it's repaired and so on.
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But there's suburbs that haven't got water, you know, for days, for weeks.
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now you You don't appreciate it because every time you pull a toilet,
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you flush down I don't know how many liters which have to be replaced.
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Now, could you imagine going down to the dam to fill the toilet or whatever?
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Drinking water, bath water, anything.
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And electricity sometimes, funny enough,
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is not as bad as not having water because you can get batteries and you can get
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lights.
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But water is awful.
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And we have a huge...
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issue with both water and power.
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And by power, yes, while Eskom is providing power, the grits within the
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cities.
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are falling apart.
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And the morning after Mr Ramaphosa gave his statement, you know, he gave his sona,
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we woke up to no power.
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You know, we were out for about four to five hours.
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In fact, huge areas, you know, because the infrastructure has never been repaired.
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There's no such thing as maintenance.
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It doesn't form part of the governance, the governor's lexicon.
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They don't know what they've got, you know, they don't know what maintenance
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means.
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And as a result of that, Everything now is, you know, the infrastructure that they
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inherited is just collapsing.
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And that's water, electricity, railways.
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What's the difference between what you experienced on Saturday then, or Friday
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rather, which must have been very awkward.
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Saturday morning, Friday morning.
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Friday morning.
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What's the difference between what you just said, a power outage for four hours
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and load shedding?
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Load shedding is when Eskim says we cannot provide electricity for you.
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So therefore, we are forewarning you, you're going to be out for four hours.
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Yours was just a...
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Oh, hello, we're just sick and we've got no power.
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Yes, now we don't know when it's going to come on.
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And it could be five, six, seven, eight hours.
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You don't know the extent.
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All you do is we apologize for the inconvenience, you know, and you get
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noticed like that.
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Now, this happens regularly.
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This is not a once every six months.
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This happens regularly, every few weeks.
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Maybe, you know, sometimes once a week, sometimes once every three weeks.
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But when it goes out, it goes out.
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And you're stuck.
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You don't know what to do.
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Of course, all the traffic lights go out, everything else goes out, everything falls
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apart.
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Now, you're a business.
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You're a restaurant.
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Okay.
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So, yes, we're used to it.
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So, we've all got inverters or alternatively, we've got generators.
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You know, those still come into power, but it happens all the time.
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And so, while ESCOM is getting its act together or trying, and there's still a
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lot of issues there down the line.
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the internal infrastructure, the grid, the transmission lines, all of those are
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falling apart.
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And that's why he can make these promises.
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We're going to put a committee that's going to look at water.
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Hold on a sec.
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I'll show you pictures.
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And we're just going on a morning run of the state of our roads.
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And, Lindsay, we're not talking little potholes.
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You know, we're talking crevices in the road.
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And I'm not even being… Dramatic.
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I'm just saying there's huge chunks of the roads that are gone.
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The worst thing that happens is during a rainstorm, those potholes fill up.
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So you don't know that there's a pothole and boom, you hit this.
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I mean, how do you survive?
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I don't know.
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I sent you something over the weekend and it was from a South African fellow.
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And he just said, I'm so deeply saddened by this.
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It was on X.
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And it was a series of before and after pictures, South Africa 15 years ago versus
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today.
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And it's startling.
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I don't know if it's AI generated.
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I don't know if it's false, but I don't think it is.
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Absolutely not.
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It looks unbelievable what has happened.
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It's not like a museum.
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I mean, that famous museum in the south of Johannesburg that has been left to go to
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wreck and ruin with pictures there that are worth tens of millions.
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Oh, no, this was in...
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This was the art gallery.
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Yes, that's right.
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This was in Jubeir Park.
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That's right.
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This was a beautiful art gallery where it's just been neglected.
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And some of the, you found some of the paintings in drawers.
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It was just awful.
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But anyway, what I'm saying is this is not that which is very high profile.
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I know Julieta covered it in the Currency publication.
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This is just streets, David.
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You know, local streets, local street corners, shops.
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It's unbelievable what I'm looking at now.
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I'm looking at it now.
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Yeah.
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Is that the reality rather than so?
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That's absolutely real.
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You know, you don't want to go look.
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You know, you don't want to go into those areas to have a look for yourself.
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But that is absolutely real.
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I had the misfortune of having to go to a funeral in Germiston recently.
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Yeah.
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And this is the East Rand.
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And, you know, this was where all the factories were that serviced the mines.
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It was a very industrial area going from, you know, Jermiston to Boxburg to Benoni
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to Springs and so on.
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Mines there and that.
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There's still very nice places along the way.
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But when you see the roads, when you see suburbs like Malvern and the Jewel Street,
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you know,
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which was the motor city where all the secondhand car traders were or used cars.
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Plus, I had a couple of really good Portuguese restaurants in Jewel Street as
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well.
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Do you remember those in that hotel?
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I think the Jewel Street Hotel is still there.
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No, no, that went into, oh, by Ellis Park.
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Yeah, that was another.
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That's even worse.
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You can still go there.
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The hotel still exists.
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But getting there in itself,
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you need some arm support to get there.
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If you drive through Hillborough, it used to be as colourful as anything.
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You don't venture there.
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When I first got married, I was in Yeovil. And it's just
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Regent Street.
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Not Regent Street.
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I'm trying to think.
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There was one area where they had all these cafes and nightclubs and everything.
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It was a very colourful area.
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They had the first Black Steer there, I think, didn't they?
15:59
Wasn't it famous for a Black Steer?
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No, this is after that, yeah.
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on the corner of Louis Botha Avenue there was a Black Steer, sure
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But you don't go into those areas today.
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And when you see the deterioration and decay, it's just sad, you know,
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that what was there.
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So those pictures are real.
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Those are not fabricated in any way at all.
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You know, it's even Ellis Park, which was where all the tests are played,
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which is a wonderful area.
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The surrounding areas now.
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Do you still have that?
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It's also near Ellis Park.
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I think it's in, what's the name?
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Is it Durnfontein?
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What's the name of the area?
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Yeah, Durnfontein.
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Durnfontein.
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There's a market there on a Saturday morning.
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There used to be a market there on a Saturday morning with lots of Indian cloth
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stands.
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People would go there to buy material and things like that.
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Has that all gone now?
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Or you wouldn't know?
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Well, I don't know.
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I'm not going to venture there to find out.
17:02
It's a shame because when I first moved there and my office was in Sandton City,
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which had only just sprung up,
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I could still go to Hillbrow.
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It was a bit edgy, you know.
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You wouldn't walk around counting your money, let's put it that way, but you
17:23
could still go there and there were some fun bars and everything compared
17:25
to the sort of rather sanitised versions in Sandton and in the hotels and things.
17:27
But not anymore.
17:28
You can't go there, David.
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No, I wouldn't go.
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No, I'm not.
17:34
So that's Joburg.
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That's how things have deteriorated and decayed.
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And yes, wild suburbs may become a bit edgy in that.
17:43
It's just that there's been no attempt to clean up anything.
17:48
It's just awful.
17:49
And those streets, I'll show you what's happened.
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That's in the south of Joburg in the city.
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It's more the southeast of the city.
17:56
It's just awful.
17:58
And yeah.
18:00
No, no, that's a reality.
18:02
Cyril didn't do a number on you, obviously, on Thursday night.
18:05
No, no.
18:06
Okay.
18:06
All right.
18:07
And David, what else can we talk about?
18:08
Not much really as it's quiet.
18:10
We've got S&P and everything.
18:13
They're still open today, despite the fact it's President's Day.
18:16
But the real markets are not.
18:18
So we just sit tight as normal.
18:20
FA Cup was boring over the weekend, wasn't it?
18:22
Totally.
18:24
Look, it probably gets a little more exciting as the weeks go by as well.
18:29
But there was nothing really to get excited.
18:33
Only the Aston Villa-Newcastle game.
18:36
I'm glad Newcastle came back because they've had quite a torrid time.
18:39
Yes.
18:39
And hopefully they can find some form.
18:44
But there wasn't anything there as well.
18:47
I don't know.
18:47
Just the games keep coming.
18:49
I just worry about the injuries for these teams.
18:53
Arsenal play now.
18:53
They've got to play Wolves because I think they're making up a game that might be on
18:59
the...
19:01
same day as the Cup.
19:02
So maybe they're bringing it forward.
19:04
I don't know why the reason is that they're bringing it forward.
19:07
But when's the Carabao Cup?
19:10
I think it's the end of March.
19:11
I don't know, David.
19:12
Whatever it is, you've got Champions League, you've got everything.
19:15
We've got Champions League on Tuesday, the knockout phases for the teams that didn't
19:20
qualify automatically.
19:22
That's all tomorrow night.
19:24
It'll be fun.
19:26
But you're asleep by then anyways.
19:28
It doesn't matter.
19:30
I am.
19:32
I am.
19:34
That's my big problem.
19:36
He said, I try to stay up and then I just doze off.
19:38
And then I pick it up in the middle of the night or I wake up and I'm either angry or
19:38
whatever it is, then I can't go back to sleep.
19:40
This is what happens when you get into
19:49
your late 70s.
19:50
I get up early.
19:50
I enjoy getting up early, but it has its consequences.
19:54
It means I just suddenly fall asleep.
19:56
Okay.
19:57
There's a lot of reading to do.
20:00
There's a lot that you have to keep up.
20:02
I must tell you, I'm trying to get a grip on what's happening with AI as well.
20:09
So much has happened, Lindsay, that you need to come back and say, hold on, where
20:16
are we?
20:17
Which are the big platforms?
20:19
Which are the big companies?
20:21
Who's spending, who's not spending, and so on.
20:23
And I want to know who's doing what for whom.
20:25
That's the other thing.
20:26
I mean, you could say NVIDIA.
20:27
Why is NVIDIA so good?
20:29
Why is ASML completely standout on its own?
20:34
What does it sell to these people?
20:35
That's what I don't understand.
20:36
I need someone to give me a sort of a flow chart or something like that,
20:41
up on the metaphorical wall.
20:44
on earth is AI and who are the players, why do they need each other?
20:49
That would be very useful, David.
20:50
I'm trying to do that.
20:52
If you and Brain Boxer, Governor, could do that for us, that would be super.
20:56
He's going to give you something in great detail.
20:58
I want the one in very basic language, the Jack and Jill version.
21:04
The toddler's version, yes.
21:07
Yeah.
21:08
What are the models, who are the platform leaders, then what does it mean to
21:13
compute?
21:13
and who are the hardware businesses.
21:16
So all of those.
21:17
I'll ask him to do that.
21:18
Shall I get him to do that?
21:19
And prepare for Thursday, but ask him to keep it in, not Lindsay Williams'
21:26
language,
21:28
because then he really would be basic, but your language, which is in between the two
21:31
of you.
21:31
Yeah, okay.
21:32
Yeah, I know.
21:33
And then we can start to build out from there.
21:36
How does it all fit together?
21:38
You've got OpenAR, Google, Anthropic.
21:41
You've got all these different layers.
21:42
mean.
21:43
Those who you need for the chips and then the manufacturers around there,
21:50
who's got cloud, you know, and so on.
21:52
And how much are they spending?
21:55
The only one thing that I do come across is the incredible amounts of money that
22:01
are being spent.
22:03
And that's why I come back to America because they're the only ones who can
22:06
afford it.
22:06
$750 billion, as Viv said.
22:09
No, he said two-thirds of a trillion.
22:11
He liked to use the word trillion in there.
22:13
And that's just in one year, as you pointed out.
22:15
Yeah, yeah.
22:16
And that's why somewhere down the line, this is going to give you some forms of
22:22
return.
22:22
So I'm trying to put it into a model that I can understand and talk to people about.
22:29
Yes.
22:29
So I'm not always embarrassed by Viv. He doesn't mean to embarrass us.
22:35
He's just a complete nerd.
22:36
He tells us not.
22:39
Okay, that's a very good idea.
22:42
We get back to basics on Thursday if Viv agrees to.
22:45
Okay, David, thank you very much for your time.
22:47
I'm going to lead that conversation because I'm going to be ahead of him.
22:50
I'll just go in the background.
22:52
I'll say time out.
22:56
Good, fantastic.
22:57
David Shapiro is from Sasson Securities and that was Shapiro World.
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