Latest / Strictly Business Podcast / The 5 o' Clock Shadow with David Shapiro and Viv Govender

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The 5 o' Clock Shadow with David Shapiro and Viv Govender · Strictly Business Podcast

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You're listening to Strictly Business Podcast with Lindsay Williams.
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The JSC has closed its doors for another day, so it's time for the 5 o'clock
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shadow.
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As always on a Thursday, I speak to the double-headed dream team edition of David
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Shapiro from Sassvin Securities and Viv
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Govender from RAND Swiss, both from Johannesburg.
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Gentlemen, lots to get through today.
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And David, I'll start with you and I'll start with Reserve Banks.
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We'll get it out of the way.
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The South African Reserve.
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The Reserve Bank of South Africa surprised.
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everybody with a flat liner.
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They left the repo rate at 7%, the borrowing rate at 10.5%.
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Some people were saying there might even be a 50 basis point rise.
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But this all happened as the oil price was going to $100 and then $101 per barrel.
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So maybe he looks back and says, hmm, maybe we're going to have to have a bigger
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rate rise next time.
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But it's terribly interesting that they've put growth over inflation, it seems to me,
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anyway.
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Oh, it's the first time ever.
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That's the first time I've heard that because their mandate is not growth.
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It's price stability, which is monetary policy.
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So, yeah, in the U.S., I think they've got employment, which I suppose you could
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associate with growth.
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But that was a surprise.
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And when I listened to him, everything he said was, you know, he was trying to be
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bullish.
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But there was a bearish leaning.
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You know, when he spoke about growth, he was trying to lift up.
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growth and believing that inflation is going to come down.
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And I would say, you're dreaming.
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You know, you haven't seen the news.
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We're up at 100, expecting the second half.
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Listen, we're in the second half, you know, for things to improve.
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And if you've watched Mr.
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Trump, there doesn't look like any short-term improvement.
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So I was a little baffled by it.
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He also said that 4% inflation into next year.
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He's target 3%.
1:54
Okay.
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So I thought, well, that's good enough.
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You know, in fact, it was last 5%.
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So, yeah, I'm not a, you know, I don't study it that closely to start to
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comment on every little sentence that he said.
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But, I mean, just I picked up, you know, I couldn't believe that he actually kept it
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on hold.
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And it was two up versus four on hold.
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So I suppose it's one vote.
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I don't know who that vote was.
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But even it was three all.
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You know, they would have had a penalty shootout, so I don't know.
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Anyway, it was a surprise.
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It was a surprise.
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The land's now at 16.75.
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Yeah, having been sub-16.50 for most of the week.
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Viv, were you surprised given the fact that inflation in South Africa at the
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consumer level, the CPI has gone from
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3.1%, close to the target, well done, and then up to a 4 and 4.5 and now
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5%.
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So if you take the 2% on top of the 3...
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0.1%.
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Inflation has gone up by more than 60% over the last, on a percentage basis,
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obviously,
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from 3.1 to 5.
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So that's a big move.
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Were you surprised as surprised as David was?
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I'm very surprised because, I mean, yesterday, the inflation number came out,
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I was suspecting he probably was leaning towards raising, especially as the oil
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price rose.
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When the inflation number came out at 5%, I was pretty much betting it was going to
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be a an increase.
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And as David mentioned, there was even an argument to say maybe a half of an
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increase, because we are going to be going into
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what could be not just a return to the highs we saw a few months ago, but
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remember, a lot of the reasons that the oil
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price wasn't going up as much as people had feared was because there were recently
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reserves.
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These reserves are limited.
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And right now, we're looking at numbers like, I think, back to the 80s or
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something in terms of some of the reserves in the
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world at the moment.
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That is a significant drawdown in terms of what our buffer is right now.
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And also, we're going to be having a super-aluminium event, which we haven't
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even discussed much with regards to a weather pattern that's going
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to, historically has been quite negative for South Africa's food production and
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therefore would translate likely to higher food prices.
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If you look at the latest inflation number, the only reason we saw that
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inflation went up was
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oil and fuel.
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uh in fact food was one of those things that were driving it down a little bit uh
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if that also becomes a driver for new inflation i mean this
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could be really bad going forward uh you know so I was surprised, especially, like
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I said, after yesterday's number.
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We've got to keep an eye on the Chicago Board of Trade and see what the soybeans
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and the wheat and the corn do over there as a result of the El Nino
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effect, the super El Nino effect.
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I remember in 1988 there was an El Nino and people were screaming beans in the
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teens.
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In other words, the price of a bushel of soybeans going into the teens.
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I haven't even looked at what they are, but we must focus on that because you're
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quite right, food prices have been a detractor from the...
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inflation rate, not just in South Africa, but many other places.
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But with fertilizer prices, obviously being impacted by the what's going on in
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the Middle East
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and the oil.
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I mean, it's just this oil story is so interesting because we had, of course,
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Trump
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saying it's falling like a rock.
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And it was it fell precipitously down to just over $70 a barrel.
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But as quickly it's gone from 70 to just above 100 as we speak now.
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And that is hugely, hugely impactful.
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And it seems to have been triggered, David, by the Houthis having a go, having
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a nibble
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at a couple of Saudi oil tankers.
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You've got the Red Sea and the Persian Gulf in trouble now when it comes to the
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transit of oil.
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Very dangerous.
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Yeah.
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You know, the fact that this was never considered is quite remarkable.
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you know that When he decided to go and bomb Tehran and try,
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I mean, the fact that they never thought that this was going to happen, it's just
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baffling, you know, that people with high
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intelligence or the intelligence services that they have.
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And here you are.
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I mean, the Houthis, however they do it, they run around, you know.
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I mean, have you seen these desert movies or the movies where Middle East was?
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You know, they get in a truck and they move from one place to the other.
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You can't find it.
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Shoot, you know, off goes a rocket and hits something in the Red Sea or, I mean,
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now the Red Sea or the Gulf of
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Hormuz, you know, and whatever.
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They can start plugging out, you know, send the bombers and take out one motor
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vehicle.
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But what happens is easy to replace.
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So, I mean, this is, this skirmish can go on.
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You know, it reminds me of the Vietnam War.
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And Viv's probably too, you know, too young and so are you.
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But you remember.
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But the Vietnam actors went on and on.
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And the Viet Cong lived in tunnels.
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That's how they operate.
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And they pop up wherever they want, boom, cause chaos and pop down into the tunnel.
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And the American troops didn't know what to do with it.
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I mean, they were completely and utterly beaten and humiliated.
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There was a disgraceful tweet.
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Sorry to interrupt, David.
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Not tweet, but on Truth Social, Donald Trump put out a graph of all the wars that
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America have indulged themselves in
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over the years.
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And he compared the number of dead and the length of the war to what's happening now.
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And he put down four months, 18 dead.
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And he was very pleased.
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He was comparing how few soldiers he'd killed and how long his war has gone on
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compared to previous
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presidents, which was just totally, totally inappropriate.
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And this is the president that campaigned on no more forever wars.
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And Viv, you've got to come in on this one.
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You may not remember the Vietnam War.
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But you'll remember this one and the conduct of Donald Trump.
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It's outrageous to me.
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Oh, yeah.
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I don't remember Vietnam War, but I do read history.
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I did watch the Ken Burns documentary, which is an all-in-doctor.
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His documentary is brilliant.
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You know, it's a very interesting thing to look at.
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But look, with regards to the death toll, yes, it's 18 dead in four months.
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It's five dead since the ceasefire collapsed.
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What was it?
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Two weeks ago.
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Okay.
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So.
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it's ticking up.
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Iran is also using things that it wasn't using before.
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A couple of positive measures I mentioned.
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Firstly, the Iranians had the funeral of the previous, you know, it was Salida
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a little while ago.
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Yes.
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And obviously the sun didn't turn up because, you know, there's a great chance
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of being assassinated at the moment if he does turn up.
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But apparently there was a lot of chanting saying death to the appeasers at the
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funeral.
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And this was a massive funeral.
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I think there were, by some counts, 7 million people or something.
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It was one of the largest funerals in history in terms of the number of people
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that turned up.
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And like I said, there is a faction in Iran that is more fanatical, that is
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saying, you know, why appease
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the U.S., why appease them, etc.
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And there is actually a pressure on them not to make a deal, number one.
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Number two, the Iranians are now doing things that they weren't quite doing
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before, and that could really— you know ramp up pressure
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and next thing is that one of the reasons we've seen all prices as low as they have
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been over the last you know a few months not even the the four we've
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seen recently but even before that it was because the reserves have been released
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into the marketplace And if you look at the numbers
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around oil reserves currently, they are really scary.
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We've been releasing these drugs, you know, over the last little while.
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And, you know, we are seeing right now that they can't continue going on for
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another couple of months even.
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Forget about South Africa.
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No, I'm talking about globally.
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Like, you know, the strategic reserves of like the US and Japan.
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all these other countries.
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I mean, we're not talking about places like Pakistan, which apparently has a
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couple of days, India, which has like, I think, a month left, et cetera.
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We are talking, you know, these levels have really come down to levels we haven't
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seen in like, you know, a long time.
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It's 43 years, I think.
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They're at 43-year low, according to the International Energy Agency, which is
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dangerous.
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And they've got to be replenished as well once the price falls.
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So we're not going to go back to the 60s.
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in the 60s dollars per barrel like we were in the sort of september time i think it
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was last year it's
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always going to be elevated and it has great implications for inflation and
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therefore monetary policy the point is now
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what we've got to do is have a look at what the effect it might have on um on our
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favorite subject or rather your
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favorite subject uh ai companies and and staying with you on this one, Viv.
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It's been an interesting week.
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Alphabet and Tesla in particular.
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particular uh catching my eye you must have looked at both of course yeah look i
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mean
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uh with regards to the tesla you know to call this uh uh prices here look the
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market obviously didn't like it uh share
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prices are down you know like double digits uh you know and they were falling
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beforehand so i mean
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uh we are seeing uh you know obviously some of the the shine of elon musk
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companies you know kind of go away that being said i mean
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even even by you know to this uh the current levels that we are seeing
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here, the IPO price is not
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anywhere near where we are right now, despite the fact that we saw it rally
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significantly after the IPO.
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You know, it's well below the IPO price right now.
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And even below 100, you know, share.
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SpaceX, yeah.
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That's 111.
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Yeah.
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One, Yeah.
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I'm still there, Lindsay.
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I'm still lurking.
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Are you still looking?
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Are you still poised for greatness there, David?
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What's that?
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What's your buying level?
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You know what?
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I'm waiting to level out.
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I'm waiting for a base to form.
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No base yet.
12:17
No, it's too early.
12:19
But I'm watching, you know, 111.
12:21
Yeah, yeah.
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I mean, I do think it's really been a big pullback, yeah.
12:27
But Elon Musk companies are not driven by...
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uh you know it's called uh by basically uh real numbers whereas google's alphabet
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rather
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prices are driven by real numbers you know what i mean and here today the share price
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is basically flat at the moment and from highs which we saw back in may
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until now they're down 20 you know what i mean so these numbers were not terrible uh
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you know
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but the fact of the matter is these companies again they are spending more and
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more the assumptions we're making about what they're going to spend Every time
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they come out, it's always higher than the last time.
13:02
Okay?
13:04
They have a 24% year-on-year increase in revenue.
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The second quarter revenue was $120 billion, effectively.
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Okay?
13:11
This is huge in terms of, like, how much money this company is making.
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But they are putting that money plus extra into AI.
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Now, you could argue, okay, this is I'm very worried about what they're spending
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and so on.
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But the one thing that gives me confidence is the fact that the AI models that we see
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are not the AI model that Google has or...
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in terms of Anthropica, et cetera.
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I don't know if you guys know that just in the last week or so, Kimi, this model from
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China, beat
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the best publicly available models from Anthropic, which was the leader up to this
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point.
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And so people are coming out and saying, hey, the Chinese are catching up with the
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Americans, blah, But understand, the Chinese reached their models almost
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immediately.
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The Americans keep their models for a long time, going through safety protocols and
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so on.
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The stuff with American labs are still way ahead of whatever the Chinese have right
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now.
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Okay.
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And these are the models that the Googles and the anthropics are looking at to say,
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do we spend more money?
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And right now they are spending more money.
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So either they are delusional or they are seeing such great models in their labs.
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They're saying, we should actually spend more money.
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This stuff is so good.
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We should actually put more money to this, even more than the increase we saw at the
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start of the year.
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So that's my view on it.
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I think it's very interesting.
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That's a very progressive view and very interesting.
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And I don't, I'm not going to even...
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cross-question you because you're probably right, you know, in terms of the Chinese,
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in terms of where anthropic and other
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places are.
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and they wouldn't do it if they felt they were going to fall behind the race.
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They wouldn't spend those kind of amounts.
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It's an interesting concept that.
14:47
They wouldn't do it if they didn't think what they're getting out is great.
14:51
So they must be seeing something so spectacular.
14:54
Not only are they maintaining spending, they're increasing spending.
14:59
Well, let's hope that they can continue to increase spending.
15:02
They've got to fund it from somewhere.
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But I tell you what, their funding is going to be very, very much more expensive
15:07
if they're going to the market.
15:08
Because if you look at the U.S.
15:09
10-year, the last time we saw it here, I'm looking at this thing.
15:14
It's almost you draw a line through it.
15:16
The last time we saw the 10-year at 4.
15:21
in the 470s where it is now, I think it was about 20 years ago.
15:25
And we may have seen it briefly go there in 2023, I'm seeing.
15:29
But anyway, it's rising.
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You look at the 30-year, it's even worse.
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So we'll wait and see about the funding.
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When the funding dries up potentially or doesn't come on at such a gush, then maybe
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things will
15:44
change.
15:45
But, David, Tesla and SpaceX, you've said you're still lurking, you're still poised
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to push the button.
15:51
But is there a chance that people are worried about Tesla and SpaceX getting
15:55
together?
15:56
And that's one of the reasons why.
15:58
Do you mean diluting the...
16:01
Yeah, I don't know how it would work.
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But people are saying that the Tesla shareholders don't want that.
16:07
I mean, the fact that Tesla is down is because its cars are not keeping up with
16:12
the Chinese EVs.
16:13
It's as simple as that, both in technology, in style and in price.
16:18
I'm not saying a Tesla is worse than a Chinese car.
16:21
I don't believe that.
16:22
But people are more attracted to the Chinese offerings now.
16:26
But what would you say to Tesla and SpaceX coming together?
16:31
I think when they do that, there's got to be a very good reason that he's made a lot
16:35
of progress on his robotics.
16:38
He's made a lot of progress on his robotic cars, self-driving cars.
16:45
I think if it comes to the he sold quite a few vehicles, admittedly, but I think in
16:51
that race, he's
16:52
not going to beat the Chinese.
16:54
So a lot of it's going to be around battery power and against issues like
16:59
that.
17:00
I think it's more outside of Tesla.
17:02
But when you look and read the reports on SpaceX, I don't think there's any hint
17:09
of a merger.
17:11
I think SpaceX is much more around literally space exploration.
17:16
But I'm talking satellites about also using his capacity for cloud and for…
17:23
compute and so on.
17:24
And then, of course, you've got defense.
17:27
You know, that's what attracts me.
17:28
But we've got to wait for results to come out and see where it's going.
17:33
I never expected the share price to come down this fast.
17:37
You know, obviously, the insiders now, by insiders, I mean those who are allowed to
17:41
sell that are getting out of it and taking what they
17:44
can.
17:44
But, I mean, it's an incredible slap.
17:49
I mean, can you imagine how much money Goldman and...
17:53
crowd made out of this, placed the shares at 135 and they won 11.
17:58
I mean, that's incredibly embarrassing.
18:01
They've got a lot to account for, you know, that it could do this.
18:05
You've got, Lindsay, I'm saying that anybody, and I mean, we don't do any kinds
18:09
of listings, you know, nowadays
18:12
compared with that, but you would always look at what the downside could be, who is
18:17
lurking on the outside, where
18:19
the supply could come from, and you wanted to ensure.
18:22
that there was enough support and limited supply, you know, just to stabilize the
18:27
prices.
18:28
But I mean, this is, you know, I don't know whether people are going short.
18:32
If they are going short, where are they going to borrow the shares from to cover
18:36
it?
18:36
It's a very small float.
18:37
SpaceX currently won $1,250, by the way, down about 2.4%, so it's recovered a bit.
18:43
And the other one we were talking about, Tesla, down nearly 14% now at $3.20.
18:48
alphabet, down nearly 8%.
18:50
Big story of the week, though, Viv, was an AI machine
18:57
breaking out of its cage and going into the internet and taking over another one,
19:04
the
19:04
AI gone rogue.
19:05
I mean, that story went from the pages of trade journals, AI trade journals, to the
19:12
BBC.
19:13
The BBC was all over it yesterday.
19:15
What do you make of the story, Viv?
19:19
I mean, this should not surprise you.
19:21
Okay, look, here's the thing.
19:23
These things are not designed, they are bred almost, or kind of like cultivated.
19:29
And they don't even know what they can do until after you create them.
19:33
The one that really scared me was the one from Alibaba, where apparently, the only
19:37
way they spotted this thing was doing something was some other division of the
19:40
company spotted that there was a breach of their firewall.
19:43
And then they went and realized that somehow
19:49
they were training and mining cryptocurrency, you know, like out of
19:54
nowhere.
19:55
So these things are very, very dangerous.
19:58
And the problem is that, you know, what we are right now is basically a situation in
20:04
which there is a
20:05
race.
20:06
And so you can't afford to step back and test them or do what you need to do to
20:10
make sure these things are being fostered.
20:12
I mentioned the Chinese.
20:13
The Chinese are releasing models, they say, within weeks of them being created,
20:17
needing approval in weeks.
20:19
The Americans are more in the months kind of level in terms of getting approval to
20:23
get released some of these models.
20:25
And if the Chinese are going to be taking off the public leadership race, anthropic
20:30
and open AI can't allow that to happen because
20:32
the Chinese models are open source models.
20:35
On Monday, the Chinese are going to give model weights to the world.
20:39
And so think of it from an anthropic point of view, from the open AI point of view.
20:42
You have something in which you're making, you know, tens of billions of dollars of
20:46
revenue on, and somebody else is coming with something
20:49
that is not only free, is actually, according to the measures right now,
20:53
better than what you have.
20:56
Imagine you're in a car company selling a car, and your competitor comes out with a
20:59
car that's better than your car, and he's giving it out for free.
21:01
You know what I mean?
21:05
And the reason is primarily because the fact is you may have a better car in
21:09
storage, but you don't release it quickly enough.
21:12
Your incentive is going to be to release this car as quickly as possible, bypassing
21:16
some of the security restraints.
21:17
And this has been a fear that people have had for a long time, that these models are
21:20
going to become more and more quickly released, less and
21:24
less focused on safety just because you want to keep ahead of the race.
21:27
And the Chinese releasing what they're releasing as quickly as they are is going
21:29
to make the Americans release it also quicker.
21:31
And all these fears you're seeing about things breaking out and having breaches
21:35
and whatnot, quite frankly, this is just going to get
21:38
more and more significant.
21:41
I would bet, you know, the cybersecurity companies are going to be doing some
21:45
really good business going forward because of some of the stuff that OpenAI and the
21:48
topic models and drop models or whatever they may be out there is going to be doing
21:51
over the next few years.
21:52
Does it not beg the question, though, when the authorities see this and say, OK,
21:56
that's enough now.
21:57
I don't know enough about it, but this is what they'll say.
22:00
This I don't know enough about it.
22:01
But when I see it going to the mainstream headlines about AI.
22:06
of breaking out and attacking other AI bots and all sorts of things.
22:12
Certainly the Europeans are far more strict when it comes to regulations like
22:16
that.
22:16
Then it puts a brake on the industry, David.
22:19
Would you say that the authorities must look at this with a little bit of
22:23
trepidation?
22:25
I see the authorities just find, was it Alphabet, a billion dollars or something,
22:30
which I'm sure is upsetting Mr.
22:32
Trump.
22:33
And it's also one of the reasons that you don't get progress.
22:36
in Europe simply because they're so backwards and so full of regulation.
22:41
So there's a pro and con.
22:43
They don't do anything.
22:45
I must tell you something that's just come across the screen now.
22:48
Moonshot have been accessing banned NVIDIA chips, according to some reports.
22:54
So when you get these releases, you always wonder how they did it and how they have
23:01
access to modern chips, et cetera.
23:05
And that's why I'm saying when you come to sanctions, it's almost impossible to
23:10
impose them and police
23:12
them.
23:12
So, but I think Viv's description is very real.
23:19
It's like the space race, you know, when you had the Russians and everybody rushing
23:24
to put something on the moon
23:26
or to put the latest Sputnik into orbit or whatever.
23:31
And I think this is very similar to it.
23:35
Yeah, hopefully it settles down and eventually you do find the winners coming
23:40
out.
23:40
I would back the Americans.
23:44
I would still back them coming out with the better models and so on.
23:49
But don't underestimate the child.
23:51
Viv, you know, and Lindsay, I've just been looking at some of the Asian companies.
23:58
They're not responding the way they should against this kind of backdrop.
24:02
been a little disappointing so and i i see that because i measure nice person process
24:08
and i always
24:09
say why has this gone down today you know and so because uh um ten cents being
24:14
chopped seven percent why i don't know for
24:16
some reason or other so with all the hoo-ha one would have expected those
24:21
markets to have really
24:23
taken off, but they're not.
24:24
I sent you both a podcast that was hosted by Meredith Ogilvie-Thompson and had our
24:30
friend Michael Power,
24:31
who used to be at 91.
24:33
I don't know if you've listened to it, but with what Viv and you have just been
24:37
saying, it's probably well worth a listen.
24:38
But anyway, we've got to get on to some prices now because the dollar round is
24:42
$16.75 after a weakening.
24:48
by 2.1 percent and that's along with the stronger dollar don't forget in the in the
24:53
in the markets this dollar is strong against everything but
24:55
um 16.75 the dollar round british pound against around 22.31 and that's after this
25:01
week's uk
25:02
inflation going in the opposite direction coming down to 2.6 percent quite
25:07
extraordinary what's going on over
25:09
there um what else have we got euro round 19.06 euro dollar is 113.75 on to
25:15
commodities now the gold price you Yeah, let's have a look.
25:18
It's not too bad.
25:20
It's $4,055.
25:21
It's been there so many times in the last month.
25:24
But on the other hand, the white metal is not so good.
25:27
Platinum down 3 and a bit percent to $1,600 per ounce.
25:31
And palladium is down 3.8% to $1,260.
25:35
And if we have a look at the oil price now, it's just below $101 for Brent.
25:42
one hundred and here it is, 101 5 now, 101.05, up
25:48
7.4%.
25:50
And West Texas crude, $92.61.
25:54
Mr.
25:54
Trump, it's not falling like a rock.
25:56
The copper price is down 2.5%.
26:00
Let's get on to the more important things now of the U.S.
26:03
Treasury market, where the 10-year is currently trading at 4.71%.
26:09
And the South African 10-year, despite the fact that there was no interest rate rise,
26:14
the yield has gone up.
26:16
by 2% or 17.5 basis points to 8.98%.
26:22
S&P 500 futures are up, sorry, down 1.5% to
26:27
7,427.
26:29
That's the September delivery.
26:31
The NASDAQ is down 2.5%.
26:33
And the Dow Jones, I haven't got the Dow Jones at the moment.
26:36
But anyway, none of it's looking particularly good.
26:39
Bitcoin remarkably resilient.
26:41
With all this risk off at 64,870, which is only down one and three quarters percent.
26:49
David, interesting day on the market.
26:50
It's just a blip though, isn't it?
26:52
I mean, we'll look back at it.
26:53
It'll just be a blip.
26:55
No, your S&P is below 7,400 now.
26:58
Yeah.
26:59
It's down one and a half percent.
27:00
The Nasdaq's down two and a half percent.
27:02
So there's a very broad sell-off.
27:05
Look.
27:06
You're going to expect it.
27:07
I mean, you've got traders around there who are going to take advantage of the
27:11
weakness.
27:11
Not only have you got the higher oil price, but you've also got very sensitive
27:16
investors, sensitive over the
27:18
spending of Alphabet and sensitive over the Tesla number.
27:22
So they've been clobbered.
27:24
They both down, Alphabet's down about 7%.
27:27
I think Tesla must be on the last I looked was 12 or 13% down.
27:31
So you've had some big 14% down as we talk at the moment.
27:35
So a lot of weak areas there.
27:38
I think the only area I saw some kind of life was in defense with Lockheed Martin
27:43
and RTX.
27:44
Honeywell as well seemed to be up.
27:47
But it's not a good day in the U.S.
27:51
markets.
27:52
Still a lot of weakness, a lot of selling.
27:54
And sometimes I think this is a combination of concerns about Alphabet
27:59
and, of course, the oil price at these
28:01
levels.
28:02
Okay, David, get the JSC indices ready while I give the top five up and down on
28:07
the JSC.
28:08
Led by Sassell to the upside, 10.6% higher.
28:11
Anglo-American, after a production report this morning, up 5.6%.
28:16
Tungela up 4.5%, Exaro up 2.6%, and Sirius up 2%.
28:22
On the downside, African Rainbow Minerals 8% weaker, Northam's 5.25% down.
28:28
5.2% down for Implats.
28:30
Valterra has given up 4.5% and Diskem a 4.1% loser.
28:34
I don't know if any of those are ex-div, but anyway.
28:38
And Viv, before David gives us the final closing JSE indices, is this a buying
28:45
opportunity or is this the start of something that has been talked about since
28:49
the end of last year?
28:50
In other words, a re-rating of these high-flying stocks to more reasonable
28:55
levels.
28:57
The problem is that none of the earnings right now justify the fall.
29:04
You look at some of the companies that have come down, like SK Hedgeson, the
29:06
Microns, et cetera, they are making real money.
29:09
Nvidia is making some real money.
29:12
The technology actually continues to progress at quite a tough rate.
29:16
So I would still be buying into the sector.
29:19
I've always said, given the technological improvement, et cetera, et cetera, having
29:25
a piece of your portfolio
29:26
allocated to AI is kind of a no-brainer at the moment.
29:29
So I'm fine with that.
29:31
Regarding some of the South African stuff that we see out there, especially around
29:34
the gold and the stocks that are already, again, down today,
29:38
longer term, I do think there's an opportunity in gold, especially.
29:41
I think.
29:42
that what Trump is doing is really hurting the stability of the US dollar.
29:45
And eventually the rest of the world is going to try and move away from the US
29:48
dollar and towards other things.
29:49
And one of the few other things that's available to them is gold, and especially
29:52
in places like Asia.
29:54
It is definitely something that people are looking at.
29:57
But whether we could fall more from here, I don't know.
29:59
I think maybe in a few months' time we might look back at this at a good level.
30:02
But the market could fall quite dramatically from here.
30:04
And I think that we don't know what the short-term value holds right now.
30:09
Interesting, Jay.
30:10
I wonder if it's a big day in the United States, so volume-wise.
30:13
David, you'll give us the volume after the indices.
30:15
How did the JSC fare today?
30:18
Not well.
30:20
It picked off its worst level.
30:22
I mean, it was after the interest rate hold improved a little bit, but towards
30:28
the
30:29
end started to weaken again.
30:30
So read across the screen, you know, whichever segment you looked at, the All
30:36
Share Index.
30:37
down 1.23% at 108.335.
30:42
Resources down.
30:43
Obviously, we had mining shares down, gold and platinum shares down.
30:47
So that took the overall resource index down over 1%.
30:52
The rest down, you know, financials down 1.5%.
30:58
Consumer industrials also down 1.5%.
31:00
You mentioned the gainers there.
31:03
But, Lindsay, we're seeing a lot of pressure on retailers.
31:06
You know, ongoing selling of retailers, Diskem and Clicks and Woolies and Pick and
31:12
Pay
31:14
and Fashini, all of those under pressure and have been under quite a bit of
31:20
pressure.
31:20
They don't show up in the index.
31:23
You know, they're not really big weights in the overall index.
31:26
But I mean, if you separate the big industrials, the miners from SA Inc., you
31:31
know, SA Inc.
31:32
is under a lot of pressure.
31:35
Well, this is not for now, but for another show.
31:38
But I heard from an asset manager that I spoke to yesterday, and he said, talking
31:44
about retailers, he said,
31:45
Trutworth's market share is now less than Timu and Shein.
31:51
But, you know, people ordering online from China going into South Africa.
31:58
I found that staggering.
31:59
That's been quick, hasn't it?
32:00
That's been a quick turnaround.
32:03
Yeah.
32:04
You mean?
32:06
I walk around the office and you walk past people's desks and they're on Timu or
32:13
all the time, Shane.
32:15
They're there all the time.
32:16
And the prices, even with the heavy duties that you pay, are still staggeringly
32:23
cheap.
32:26
And it's made for a year.
32:28
I don't know.
32:28
You wear it for a few months, you chuck it away.
32:30
You wash it once and it's gone.
32:32
I can tell you that from a bit of personal experience.
32:34
Whereas two-worths is a much higher level.
32:36
So I can understand that.
32:39
You can't ignore the impact that they're having.
32:42
Okay, honesty time now.
32:44
Viv, have you ever bought anything from either Timu or Sheen?
32:50
I'm not a Sheen person.
32:53
I'm not a clothing person, but I am a Timu addict.
32:57
My wife always, every few weeks, something comes through.
33:00
I think there's some crazily interesting little things out there, especially for
33:03
someone with a thing for gadgets.
33:07
I will tell you right now, the optical stuff, things like telescopes, binoculars,
33:12
are excellent.
33:13
The digital microscopes are brilliant.
33:15
I think what they do is they get access to the chips from old phones, and the screens
33:22
are from old phones.
33:23
You can buy yourself a handheld digital microscope.
33:25
That's amazing for a couple of hundred rounds.
33:28
Absolutely stunning if you have kids and grandkids.
33:30
If you have grandkids, they would buy them.
33:32
They're wonderful.
33:34
They are wonderful.
33:35
They are wonderful.
33:37
I'm okay with them.
33:38
The one thing I want to mention about the Chinese stuff, we talked about it before,
33:41
is when you talk about BYD, et cetera, BYD has twice the
33:45
market share globally of Tesla and like one-tenth or less than one-tenth the
33:49
market capital.
33:50
BYD, yeah.
33:50
Yeah.
33:53
The thing with that is that Elon Musk is not about robotic cars.
33:57
He's robots now.
33:58
He has to get those robots up and running to justify this price.
34:01
But yeah, I do think right now in terms of the Chinese things, coming back to them
34:08
again.
34:09
The deals offered on TiWoo just don't make sense to me.
34:11
I mean, what you're getting for what you're basically paying just is totally
34:16
broken.
34:16
And I suspect this is the case of the Chinese market and why we think the 10
34:21
cents, the BYDs are under such pressure is because the
34:23
Chinese government has decided, you know what we need to do?
34:26
We need to destroy global industry.
34:28
We need to just pump out anything we want into the world at as low a price as
34:32
possible, destroy their ability to market, and then later on we
34:35
will get back to a more...
34:37
reasonable price for what we are producing.
34:39
And I think that is the story around the team on the sheets.
34:42
It is literally, this is dumping.
34:44
This is unfair competition.
34:46
It's trying to destroy global industry.
34:48
And yes, the deals that as a consumer that you make are unbelievable in the short
34:51
term.
34:53
But if this does succeed, longer term, it will be quite negative for us.
34:57
Okay, gentlemen, lots and lots to think about.
34:59
As we go, the oil price on the new high of 101.15, which is over 7.5%.
35:05
Hi, thank you very much for your time as always.
35:07
David Shapiro from Sessom Securities, Viv Govender from Rams Swiss, both from
35:11
Johannesburg, and that was the five o'clock shadow.
35:14
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