Latest / Strictly Business / 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

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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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And as always on a Thursday, I've got the double-headed Dream Team edition of Viv
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Govender from RAND Swiss
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and David Shapira from Sasson Securities.
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Viv's in a car, David's in New York, I'm chilling here in the Netherlands.
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And the market's taking a bit of a chill as well, David.
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Start with you on that one, because there's no data coming out from the
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government.
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Because there is no government in the United States.
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No.
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You know, you laugh about that, or I laugh about that,
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because at the moment they are in shutdown and the fight continues.
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And neither side wants to give up.
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And of course the Democrats, which is no longer a party, and we can talk about
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that.
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I'd love to hear Viv's views on that and just discuss it.
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But at the moment they're just floundering.
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And this just gives them a little bit of leeway in the sense that they want
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concessions
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on health care, which was taken away completely by Mr.
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Trump.
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He wanted to get Obama and he's finally getting it by removing so many benefits
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in health care.
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So that's the bargaining tool.
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In the meantime, the fighting goes on backwards and forwards.
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And to be honest.
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The market doesn't care, it just moves its own way.
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You don't see any reflection in the market, in fact, of any geopolitical news.
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But when you look at this, Lindsay, and you look at the Democrats,
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they're good at regional level or municipal level or state level, whatever
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it is.
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But as a federal party, There's just no one there.
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It's like the Conservative Party in the UK.
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It's just fallen away.
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It's a non-entity.
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Now, Viv, would you agree with that?
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Yeah, look, I mean, I think the problem with the Democrats is they don't have a
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vision.
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So, for instance, I mean, Trump puts up, you know, not paying civil servants.
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And then Bernie Sanders comes out and says, maybe we shouldn't pay the military
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and air traffic controllers.
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I mean, you will have no sympathy among anybody if you're not paying your soldiers
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that are putting your lives at risk or people that are.
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controlling the planes, you know what I mean?
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That makes no sense.
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And then you have, you know, the people, then they say, what we need is our own
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Trump.
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And so they're putting up Gavin Newsom, who is, you know, he may be on the
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Democrat side, but he's as slimy as Trump is, you know what I mean?
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That's high praise indeed, to be as slimy as Trump. Yes, Trump is.
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I mean, he's one of those guys that was going on, you know, dinner parties and
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stuff when he had California locked out,
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famously.
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So, I mean, you need a vision.
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And unfortunately, what's going to happen is you're going to have somebody like a
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Mamdani who will probably,
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if he was actually born in the U.S., be the new star of the Democratic Party.
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He's about to be mayor of New York.
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He's about to, you know, take over the largest, you know, most powerful city in
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the U.S.
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But I think if you look at, for instance, what's happening with regards to the
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European elections, what's happening in Japan.
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To be honest, unfortunately, you'll have to say that, you know,
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we're going to go to extremes because the mainstream parties are not giving you a
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solution.
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And that's kind of what Trump is.
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He's an extreme reaction to the Republicans not giving a solution to their
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voters.
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And unfortunately, we're going to have these crazy people, you know, being in
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charge going forward,
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unless we can have someone more sensible and centrist, which I don't know how the
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current system was that personally brings them into power.
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Yeah.
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It is a difficult one and it plays right into Trump's hands, of course.
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Yes, go on.
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Viv, I mentioned this to Lindsay earlier on in the week.
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What I'm finding here is that people who were moderate and were anti-Trump and were
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Democrats
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are now,
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I think they despise the left more than they do the right and are shifting more
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towards Trump.
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And you're seeing that in Wall Street, you know, if I can define Wall Street as being
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the investment community.
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They're quite happy with where things are at the moment.
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You know, if you read Bill Ackman's tweets, I mean, he's come out fully in
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favor of Trump.
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He's a big Trump supporter at the moment in every respect.
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And those are chaps who certainly, you know, wouldn't have voted or supported
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him.
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Yes, there were chaps.
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There were certain hedge fund managers who...
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who were Republican and supported Trump. But generally, New York was, I think, more
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left than right.
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But they're going right.
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And that's simply because There's just no one standing up for the Democrats or
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coming with any plausible
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policies.
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We could talk about the fight in New York, because I watch it all the time.
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When I say front page, I mean you watch the TV.
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There's a massive battle going on now at the moment.
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The youth, as you say, all supporting Mamdani.
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Also, the coma coming out there is the opposition.
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But he's tainted.
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He's tainted from COVID.
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He's tainted from other things.
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I mean, not just COVID.
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I mean, there's also that harassment allegation against him as well.
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And what amazes me about Cuomo is he's basically going after Mamdani as being a
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nepotism baby.
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Cuomo's father was the governor.
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Yeah, I know.
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It's the craziest thing I've ever seen in my life.
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Well, this is US politics.
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I mean, it's...
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When you watch it unfold in front of you, it's quite remarkable.
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You know, it's, I watch with, you know,
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almost it's humor and they change their mind.
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Comer wanted to close down Rikers Island, you know, the infamous prison.
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Now he wants to keep it open.
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Why?
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Because Mamdani wants to close it down and so on.
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Mamdani wants free, you know, everything must be free, you know, no more
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meritocracy and also free.
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Transport-free grocery, you name it.
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Anyway, so you watch this all happening and say, I think I've seen this before,
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you know,
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maybe 30 years ago in South Africa, the same kind of battle.
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But anyway.
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All right, so we've got politics.
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As I briefly said there, it plays into
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Donald Trump's hands and it's very sad that someone so mediocre can be the most
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powerful man in the
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world.
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But anyway.
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That's one thing.
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The other thing is the market, which has been quite extraordinary since we last
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spoke as a threesome here.
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And a lot of it is to do with the Federal Reserve.
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AI aside, let's have a look and see what the notes from the minutes of the FOMC
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said.
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The meeting was on the 16th and 17th of September.
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The notes came out last night.
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It says the FOMC is strongly committed to supporting maximum employment and
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returning inflation to its 2%
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objective.
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I don't know whether they can have their cake and eat it,
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but I had a very good chat with a fund manager from London this morning.
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And he said that this is actually tailwinds for the equity market.
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Viv, since you've been away, you've seen the market, as we have, go to all-time
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record highs almost every day.
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And this is a tailwind, this chap said.
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Would you agree?
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Or has it already been factored in, i.e.
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two more cuts?
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I know you said no AI, but I mean, apart from the FT, 80%
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plus of growth in the US stock market this year has been AI-related stocks.
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40% of US growth, GDP growth period, overall economic growth, is AI-related.
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You know what I mean?
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And possibly it is undercounting it.
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It could be as much as half of all US growth this year has been AI-related.
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So, yeah, what's happening with the Fed, I think it's obviously important.
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But what's happening also with the spending that we're seeing.
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And Also, since we last talked, I mean, there's kind of like these circular deals
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being done all the time.
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Yeah.
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Where, you know, OpenAI is doing deals with people where I don't know exactly who
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buys what and who gets what.
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But it doesn't seem like actually any real economic activity is happening.
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But it translates into hundreds of billions of dollars of extra valuations
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for NVIDIA and AMD and Oracle, et cetera.
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And, you know, even we have XAI getting into these deals as well with NVIDIA at
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the moment.
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So it feels extremely, extremely bubbly.
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I mean, my AI portfolio, which I'm, you know, guys I know I run, is up 20% since
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the start of September.
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So you said a word there that David, I could feel David's shudder there,
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actually.
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David switched off when you said the word bubbly.
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Now, because I keep on saying it to him, he says, no, not until further notice, not
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until I'm otherwise advised.
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Will I do anything about it?
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And that's quite right.
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But just quickly staying with you, Viv, I gave David a question on Monday and I
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said,
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are you happy that there's this M&A and corporate activity going on?
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There's so much.
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I saw a graph today, a chart today, and it had one of those graphs, sorry,
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charts with lots of circles in it and lines going off from one circle, which is
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a company,
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to another company.
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And it was incredibly complicated,
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but it was just the AI deals that had been done by the companies that you mentioned,
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you know,
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AI Chat, GPT, Oracle, Intel, you name it.
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It's so confusing.
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But is that a good sign or is it a sign of the top?
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Look, I mean, here's the thing to understand as well.
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The people that are making these decisions are not making economic decisions.
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Listen to what Mark Zuckerberg says.
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Look at what Larry Page says.
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Look at what Elon Musk and some others.
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These are the guys driving this stuff forward.
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I mean, Larry Page comes out and says he's willing to risk bankruptcy in order to not
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miss out on the AI race.
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Zuckerberg talks about, you know, we're spending a couple hundred billion dollars
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as a price worth paying.
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in order to make sure that he basically is in that race.
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So these guys are operating on a very kind of emotional kind of level.
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And so in that scenario, you could find, you know, like the chip companies, which
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is like, you know, one of the best performers out there doing really, really
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well.
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But the thing that gets me is that when you have these circular deals and the
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market reacts so positively to that,
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you've got to probably say that, you know, irrespective of the underlying technology,
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which I still believe is progressing.
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I mean, Sora 2 is amazing if you haven't used it.
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still an amazing technology but why is the market rewarding nvidia and amd with deals
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that don't where they're
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effectively inverted commerce selling stuff to uh it goes openly without open
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air actually paying for it doesn't make it makes sense to me
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okay i think i think they have i think they just fund us you
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know i don't think open ai has the money but it's got the skill and that's all
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they're doing is funding it yes it comes back at them
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and it you know probably reduces their margins because of the circular deal,
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as you explained.
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But you know what?
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When you read Bezos or listen to Bezos, listen to David Solomon, and again, I'm
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repeating myself on this,
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we know there are going to be catastrophes.
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Some people are not going to make it.
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Throughout the development of technology, and I'm going back to even the...
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the uh you know the
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1850s the industrial revolution uh there's always people who are going to fall by the
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wayside but there will be winners as well
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and big winners and you know and and and i think that's up to the businesses to keep
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ahead of where of of
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the competition and always be at the forefront this
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will create yes there will be some bubble there will be companies that fall by you
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know that that that fall by the way
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but i mean at the end you can't ignore what's happening.
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And you can't ignore that, you know, all this development is taking place and that
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we will get the benefits down the
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line.
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It's not going to happen immediately and we can't foresee it happening down, you
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know, but I think every day.
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And, you know, Viv, you know, it was quite interesting and also just read an article
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on the application of
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this.
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What happens is that, yeah, the firm doesn't apply.
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You know, if you go into an accounting firm or whatever firm.
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But singularly, people apply it.
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You know, individuals are applying it and using their minds and using the tools that
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are available to them.
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So although the firm hasn't got an AI policy or might be looking at one,
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individuals along the way, in terms of doing what they do on a day-to-day basis,
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are starting to use these tools.
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So it's very difficult to measure, you know, what the benefits are on looking at
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a firm and saying,
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what's your strategy and so on.
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And I know from my own daily, in fact, at the moment,
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I'm really trying to ask a lot of questions on gold.
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Not gold, but we'll come to it in a sec.
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Yeah.
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Just on what this all means, you know, particularly from a reserve point of view.
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Because remember, America still values its gold holdings at $42.22 an ounce,
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which was, I think, goes back to the 1970s. You know, that was the official
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price of gold.
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So it's never revalued its reserves to 4,000.
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So I'm trying to work out the consequences of that or the benefits.
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So, you know, the dollar should actually be the strongest currency around if you're
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looking at gold.
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But anyway, so what am I using AI, you know,
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to search and to find all the statistics, which would take me a mountain of time to
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do it if I had to go through Google or
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whatever.
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It's fascinating, actually.
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I was going to ask you this question, both of you.
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Sorry, Viv.
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You can digest this question while you come up with your next point.
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Do you use AI for anything else than asking questions?
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Is there any other aspect of your life that you knowingly use AI and wouldn't
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have used AI a year ago?
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Viv, you were going to say something, and then we'll answer that question.
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We actually had a discussion in the office this week.
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And it's an interesting idea.
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Like, for instance, I know an advocate that's using AI to basically double his
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workflow.
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But the question, he doesn't double the amount of, like, advocate services that's
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required in the country, you know what I mean?
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So he's just charging a lot more for AI doing the work for him.
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And that's probably what's happening out here as well.
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So let's just say you have many more analysts out there, but analysts are
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basically a zero-sum game because you're just buying and somebody else is selling.
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And so it doesn't really increase economic activity.
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The same thing applies to a lot of the stuff that current AI does.
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It makes your life easier, but if you have everybody doing the same thing, the actual
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net effect is zero.
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The only way AI is really going to have an impact on the global economy, which it
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needs to have, like I've always said, if you look at the amount of money being
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spent now,
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you're talking about 20 times that amount of money at least has to come through.
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in terms of GDP growth to justify it.
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The only things that are really going to move AI in terms of actually increasing
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GDP growth in that level is either scientific discovery or
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manufacturing, you know, mining, that kind of stuff.
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Making more, like, I mean, technically, you go out and you make a video with Sora.
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How does it add to GDP?
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How does it add to, you know, productivity for the world?
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It's very useful.
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It replaces a studio out there.
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And so, you know, we have more videos out in the world, but it'll really increase
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productivity in the world.
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Same thing with analysis.
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I mean, David's reading stuff with gold,
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but he's actually trading with somebody else who's also using the AI to basically
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figure out the price of gold, you know what I mean?
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And so both people are armed to a high extent.
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The world's economic value hasn't increased.
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So we need to see AI translate into physical world, manufacturing, or in the
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world of symbols,
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scientific discovery.
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And we have not yet seen that come through and the kind of reason we need to...
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see that come through is because we need to have those kind of like developments to
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justify the current spending we're seeing one thing
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that uh one thing that i've noticed from a personal point of view is that uh as a as
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a broadcaster as a
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podcast i've got this big clunky desk in front of me now i'm looking at it it's
16:43
been bolted into a suitcase for ease of
16:45
travel well i thought it was ease of travel and it's it's got all the sort of
16:50
buttons that you see you would see in a music studio and
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faders and all that sort of thing.
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And it was made for me by a technician from the SABC, what, 10, 12 years ago,
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something like that.
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And it served me really well.
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Now I could buy the thing that does exactly the same as this in like the size
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of a
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tablet, for example.
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And it's probably going to cost me about $500 in total.
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And I could have started from nothing as a podcaster on day one just buying this
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stuff off the shelf.
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And the other thing that's interesting is that there are AI programs now to edit.
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At the moment, I send my stuff to an editor in Cape Town,
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and she gets all the ums and the ahs out.
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And if it's a half-hour interview, it takes her 45 minutes to edit it.
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This is a program that takes out all the ums and ahs for you, takes out the
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background noise.
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So if David's budgerigar, for example, starts tweeting in the background.
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background linda yeah exactly your wife that's what i was going to say it'll take
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the noise out it's fascinating so i could get rid of if
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i was if i was a nasty person i could get rid of my editor in cape town and just do
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it myself and it would say it would save me money
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and the question was david do you use it from for anything else apart from writing
18:07
speeches and researching gold well
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i think that's my you know that's my job so i use it extensively look i'll be
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honest with
18:17
you You can't just take what you get back.
18:21
You know, in many cases, the information is old, doesn't look right, and you've got
18:26
to keep searching.
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They do give you the references, you know, and you go back to the references,
18:31
and sometimes it is a little old and not useful.
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But I think where it does come useful is if you sit through a transcript.
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You know, for example, today, as you mentioned, it edits meetings,
18:43
and it gives you the minutes and action plans straight away.
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literally straight away.
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You don't have to employ somebody to go through the minutes, you know.
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And likewise, I will get a transcript, which I'm going to do now, of the Ferrari
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results and say, okay,
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what are the, you know, what are the highlights?
19:01
What should I look out for?
19:02
And so on.
19:03
And it comes back and gives you a summary almost immediately.
19:07
Now, a lot of,
19:12
what would you call them?
19:12
A lot of platforms, sorry.
19:15
are already putting this in.
19:17
And you'll get a side column that will say, if you want to summarize what was
19:23
discussed, blah, blah,
19:25
we'll do it straight away.
19:27
So they're even providing that kind of summary and issue.
19:30
So you can get through what you want to in a fast way, especially if you've got to
19:35
digest a lot of information.
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And where it suits you, you then go and start probing in a little more detail.
19:41
Because you know that...
19:42
When results come out, Lindsay, there can be so much nonsense and so much
19:47
superfluous stuff.
19:49
So it frees up time for you for more productive things or more productive
19:52
things for you as a person, i.e.
19:54
a nap or a walk or a run or something like that, which is also important and can't be
19:57
quantified.
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Viv, I have to ask you a personal question now, and you can tell me to go and jump in
20:04
the lake if it is too personal.
20:06
You said bubbly.
20:08
Does that mean you're taking some profits for yourself and your clients?
20:10
No, because I think that trying to time these things is wrong.
20:13
And I'm fully invested in it.
20:16
And I think it's going to be like the dot-com bust, where if you had bought
20:20
Amazon before,
20:22
you'd be obviously suffering a lot when it fell 90%.
20:23
But you'd still be better off 20 years later having held on to Amazon at that
20:27
time as opposed to anything else you bought.
20:29
I do think that the technology is real.
20:31
The problem I have is that the size of the bubbly stuff that's happening right now,
20:37
it doesn't make...
20:39
sense from a from a from a logical point of view and that's when you get worried
20:45
when people are just you're throwing money at something without kind of like
20:47
considering what's the real value in it but no i'm i think buying into ai right
20:52
now and waiting 20 years or 10 years is going to be one of the
20:54
smartest things you do uh it might be smarter to wait maybe a few months and buy
20:58
a little cheaper but you know it'll be
21:00
terrible if you just miss out on getting in at the first place.
21:01
Well, you haven't missed out, and neither has David, and well done to both of you,
21:07
because I thought it was just another bubble.
21:09
It may still be, but I mean, even if it's a bubble and falls 10%, 15%, and everyone
21:13
says, I told you so, it's all over.
21:15
Of course, it's not all over.
21:17
This is with us forever.
21:19
I did an interesting thing the other day.
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I put in to the few that I use, the few AI apps that I've got.
21:23
I've got Perplexity, DeepSeek, Grok.
21:26
um chat gpt co-pilot i think there's one other and i gave them all the same
21:32
question when did trump
21:34
start pretending to be a christian i use the word pretending instead of when did he
21:40
become a
21:40
christian because they'd all say well he was uh baptized in a presbyterian church
21:45
you
21:47
know with us because of his scottish background and everything but you put the
21:52
word pretending and and you get a completely different
21:54
answer from every single one.
21:56
Some will sort of ignore the word pretending or ignore the mischief making
22:01
of the word pretending.
22:03
And others will say, well, of course, this is all subjective and you can't say that.
22:05
But very, very interesting the way that their different minds work and whether
22:12
they're a Musk AI app or
22:14
Chinese AI app, for example.
22:15
Do either of you find that, David, for example?
22:18
You know what you're saying?
22:20
I think this is a problem.
22:21
It's not picking up the nuance.
22:23
You know, it's taking the pure question and said, yes, he was baptized.
22:28
But what you're trying to say is, you know, it's much more, what's the word?
22:34
Subtle.
22:35
Yes.
22:36
You know, saying pretending.
22:38
No, they picked it up, David.
22:39
And therefore it doesn't pick that up.
22:41
It actually did pick it up.
22:43
It did.
22:44
What I'm saying is that some people said they quantified the word pretending.
22:49
Yes.
22:50
They almost...
22:51
Terms and conditions came in immediately and they wrote a disclaimer by saying
22:58
certain things right at
23:00
the beginning.
23:02
So it was fascinating.
23:04
I'm trying to come up with really, really difficult questions for them.
23:04
And again, Viv, Trump was talking the other day with Mark Carney in the Oval
23:10
Office.
23:12
And he said he was talking about the Middle East and he said this could be a
23:18
piece in the Middle East after so many years where.
23:20
Millions.
23:22
He said, no, tens of millions of people have died.
23:24
And I thought, wait a second, that's wrong.
23:26
So I immediately went to Grok and I said, did he just say tens of millions?
23:27
And he said, and they said, yes, and he did say it.
23:30
And this is what he said.
23:31
And it was this was the context in which he used it.
23:34
And this is the history of what when he said it in the past.
23:38
It was fascinating.
23:39
It was five seconds later, Viv.
23:41
And you two have converted me.
23:44
Yeah, no, look, I mean, it does add this extra belief.
23:47
My question to you is that any of these use cases increase the global GDP, you
23:53
know,
23:53
and that is the thing that we have to see global GDP increase.
23:57
And we are talking, I mean, to justify current spending, like I did this
24:02
calculation a while back, and I told you guys about it,
24:04
you need to have like five plus percent of GDP growth per annum to justify this kind
24:08
of spending.
24:08
You know what I mean?
24:09
And what does that it's not going to be like, you know, having a more, I mean,
24:15
Wikipedia, for instance, imagine Wikipedia, right?
24:17
How much benefit has come to your life for having Wikipedia?
24:18
I know for mine, a huge benefit.
24:20
Wikipedia, I still ask every time I go there for like $20, you know what I mean,
24:26
or $5 or whatever it is, begging for money.
24:28
It's four euros over here, so we get it cheap.
24:31
Yeah, yeah.
24:32
But I'm saying to you that Wikipedia is one of the most useful things ever
24:37
created,
24:37
more useful than Coca-Cola or McDonald's by any definition, but it doesn't add to
24:43
the GDP of the world.
24:45
And it doesn't make financial sense, you know, from that point of view.
24:45
I mean, you can argue whether economics is good or bad, but I'm saying to you that...
24:49
That's my argument, that you use it.
24:52
So in a way, it's making you more productive, even though you can't quantify
24:56
it.
24:56
Yeah, but it doesn't make Nvidia or OpenAI or Facebook make money, which they are
25:03
basically spending money to make.
25:05
You know what I mean?
25:07
That's the question.
25:09
That is the question around AI, is that it makes the world a much better place.
25:11
I don't say no to that, but...
25:13
Does it translate that 100 billion that Microsoft spent on it?
25:15
into money that Microsoft gets back in any way.
25:19
Yeah, I think we're going to have to live with that.
25:20
That's what I'm saying.
25:21
There are going to be casualties.
25:22
We're never going to be justified.
25:24
But as you mentioned with Larry Page or Serge J.
25:28
Brun, whoever you mentioned, you know, they know that they have to keep doing it.
25:32
You know, they can't fall out the race.
25:34
Otherwise, you get an Intel situation, Cisco situation, you know,
25:38
all the other situations that we've seen from the start of technology of companies
25:43
that just lost their way.
25:45
you know never kept up so that's why i'm saying you know from from my point of view
25:51
i'm not getting out i
25:53
would rather i'd rather continue with ai than start to look at gold or anything
25:58
like that which is just uh you know just
26:00
just a FOMO deal you know so
26:00
i'm saying there's something real it was in silver yeah i saw it's over 49 yes
26:07
david where
26:09
is it now it broke 50 good lord broke 50 50 70
26:15
It was 32.
26:16
It was 32 EB.
26:18
I can remember silver being like four, five,
26:20
about between $5 and $10 an ounce when I first started in the business.
26:25
Yeah.
26:26
What does silver do?
26:27
Who uses silver?
26:28
I don't know.
26:29
I don't know.
26:30
Somewhere along the line for who you exactly.
26:36
Anyway, this is one conversation that you just kind of avoid taking public because
26:43
you get in front of a...
26:45
You know, it's like religion.
26:47
When you start to talk about religion, just make sure you know what you're
26:49
talking about.
26:51
You've studied the Bible, you've studied whatever you need to do, Koran, whatever.
26:54
But it's like with gold, don't get in front of those gold bugs or anything,
27:00
you're just going to get taken out.
27:02
So be quiet.
27:04
I spoke to a gold bug the other day, a fund manager, he's a gold bug, and he's
27:09
very good, but he's got this thing for gold, he's a South African,
27:11
I mean, what do you expect?
27:13
And he was almost hyperventilating when he went through the numbers of the miners,
27:17
because it was a day when the JSC was shooting up mainly because of the miners,
27:22
the resources index was flying.
27:24
And when I started to talk to him about gold, he got either emotional or he
27:29
hyperventilated.
27:31
It has that effect, but it should do as well.
27:32
It's doubled in two years.
27:33
It's quadrupled in 10 years.
27:36
And when Gordon Brown, that...
27:39
The useless prime minister sold Britain's last gold.
27:42
That was $252 an ounce.
27:45
He sold Britain's last bit of gold that he could sell at $252 an ounce.
27:51
And now they're probably buying it back at $4,000.
27:55
So here's my conundrum.
27:57
Okay.
27:58
Gold's gone up to over $4,000.
28:01
I don't know where it is now, but call it $4,000 an ounce.
28:04
Yes.
28:05
America who back at Bretton Woods,
28:12
took over from gold with a dollar as being the reserve currency of the world.
28:18
In the 1970s, I think Nixon took America off the gold standard.
28:22
But still, in order to even be on the gold standard, they had to have huge amounts of
28:28
reserves,
28:28
which they have maintained to this day.
28:30
They haven't really added.
28:31
But they've got massive amounts of gold hidden at Fort Knox and various other
28:36
places.
28:36
Wherever.
28:38
I don't know how many thousands of ounces, by far the biggest world's gold reserves,
28:43
but they still value them because of the illiquidity at $42 an ounce.
28:50
Today it's $4,000 an ounce.
28:52
100 times cheaper now.
28:54
Yes.
28:55
So now, surely,
28:56
if the American currency is now supported by those huge amounts of gold, you know,
29:02
you would buy the dollar.
29:04
You would say, hold on, This is the strongest currency around.
29:07
You know, why do I need to go elsewhere?
29:10
Look for something else.
29:12
Every time gold up, it actually should be strengthening the dollar.
29:15
But America, that doesn't happen.
29:17
And the danger is if you do revalue it, it gives the Reserve Bank or the
29:22
Fed Reserve huge margin to actually increase money supply and go out on a...
29:28
Please don't tell Donald.
29:28
I hope Donald Trump doesn't listen to this.
29:31
It probably hasn't occurred to him.
29:34
But what I'm trying to do is, Lindsay, I mean...
29:37
Viv's there.
29:37
I'm trying to say, hold on a sec.
29:39
This doesn't make sense.
29:40
You know, the dollar should be roaring on the bank of the gold price.
29:44
I'll give you a step to blow your minds, okay?
29:46
Here we go.
29:47
You know who has the most gold reserves in the world and it's not the U.S.
29:49
government?
29:50
No, go on.
29:53
Indian private households.
29:54
Yes, yes.
29:55
I would buy that.
29:56
Under the bed or in the bank?
29:58
I will buy that.
30:00
Private households in India hold something like four times as much gold as U.S.
30:03
government.
30:04
I will buy it, yeah.
30:08
Well, it's very customary, isn't it?
30:11
Traditional.
30:12
Yeah, yeah.
30:12
I mean, in India, like in South India especially, people just buy gold.
30:15
It's like a cultural thing.
30:16
They have about 20, according to the guesstimates out there,
30:20
they have about 25,000 tons of gold in private hands in India.
30:25
The US government only has about 8,000 tons.
30:26
That's right.
30:27
You know what I mean?
30:29
Yeah.
30:29
They're not going to go around.
30:31
They're not going to be able to go around and get every Indian household together
30:35
and say, listen,
30:38
come and deposit your gold so we can boost the rupee.
30:43
No, no.
30:44
But the thing is that gold is something that's important.
30:49
The important thing is that Nixon was able to do that was because the U.S.
30:52
was such a dominant play in the global economy that the dollar became the new
30:56
gold effectively.
30:58
Right.
31:00
and reserves around the world were replaced.
31:02
gold with dollars effectively.
31:04
But what's happening right now is the reason that we're going back to gold
31:06
partially is the fact that we're no longer going to the,
31:08
in a world where the US dollar is automatically the reserve currency of the
31:10
world, you know what I mean?
31:10
It still is, but it's not automatically going to be that going forward.
31:13
And many central banks especially are swapping out dollars for gold.
31:18
And that's one of the reasons we are seeing what's happening here.
31:21
So the gold stuff happening is interesting.
31:23
And then what's happening with platinum and silver we talked about.
31:26
is I think the fact that gold rises and then these ratios basically are maintained
31:30
over time.
31:32
There's actually a gold ratio of platinum to silver and a gold ratio to platinum
31:36
that's like, you know, you could trade that as well.
31:38
And so I do think that that's the story.
31:39
It's not so much gold that's important.
31:41
It's why is gold going up?
31:42
And one of the reasons it's going up is because the Chinese and the Indians are
31:48
looking and saying, even the Europeans are saying, maybe not so many dollars,
31:50
maybe a bit more gold in my account.
31:52
It's interesting, isn't it, David?
31:54
You talk about that.
31:56
Sorry, Davey, you talk about them not revaluing gold,
31:57
but I'm sure they're aware of the fact that they've got the stuff in spade loads
32:02
underneath Fort Knox.
32:04
But it's an interesting sort of visual here that Trump phones up Stephen Miller
32:09
and says,
32:09
listen, we're supporting Argentina to the tune of 20 billion.
32:14
Why don't we just send them 20 billion dollars worth of gold?
32:17
Go down to Fort Knox with a couple of trucks and go down to the docks.
32:21
It's just like...
32:22
But, you know, there's so much of it.
32:24
Surely they can asset back the dollar, as you said, with gold to do things like
32:30
that.
32:31
They could.
32:32
I don't know why.
32:33
I don't know why.
32:35
It just hasn't moved.
32:36
You know, they haven't touched this in decades, in absolute decades.
32:40
They're not involved in the market simply because they still have the world outside
32:45
of what Viv says,
32:47
which I understand, you know.
32:47
is uh look the other thing is it's pretty much I don't think as much as the Indians,
32:54
but I mean,
32:56
certainly Europeans traditionally have always, you know, accumulated gold,
33:01
particularly the Swiss, particularly,
33:03
you know, Germans.
33:03
I don't know, you know, other people in Europe.
33:06
It's been a traditional haven for gold, but no one uses it.
33:10
You know, that's the thing.
33:11
No one's actually using gold.
33:14
It's just kind of a reserve.
33:16
One day when those Indians want to sell it.
33:19
Well, the merit go, who the hell is going to buy the stuff?
33:24
And that's the irony.
33:25
And that's why I'm saying, look, I'd rather be an AI bull.
33:29
And even if we look at gold, it's up 40% this year.
33:31
My NVIDIA is up over 40%. All right, so NVIDIA is up 40% or something.
33:36
Okay, I'd rather have NVIDIA because I know where NVIDIA can go and I know where
33:43
gold could go as well.
33:45
Okay, very quick one now.
33:47
And that's David again, Viv.
33:49
David on Monday, kiss of death, said there's been a recovery in luxury stocks.
33:52
Today, of course, Ferrari fell after a trading update by the most in its history,
33:58
I think,
34:00
because of a trading update, down 16%.
34:01
David, they brought out an electric car, but it wasn't that that did it, was it?
34:06
No, no, I just think it's the outlook.
34:08
The results per se were good.
34:11
but they've just toned down their outlook right through to 2030.
34:15
And I think it's really a reflection of issues in the motor market.
34:20
I mean, overall, you've seen Aston Martin, Porsche, all of those come down.
34:24
I think there's chaos in markets.
34:27
I think the Chinese have just, you know,
34:31
just kind of destabilized all the traditional markets.
34:34
And I can understand why.
34:36
You know, I understand.
34:37
It makes a lot of sense.
34:39
Most people just want to go from A to B, and if they want an electric vehicle to do
34:45
the same, the Chinese are supporting them.
34:47
You don't need the fancy cars.
34:47
But I think...
34:50
The one thing I like about Ferrari is it limits its output.
34:53
You know, it's a very small producer globally.
34:57
And I still trust the brand, you know, even though they've toned down the outlook
35:03
for electric vehicles and it'll be a much
35:05
slower, you know, performance there or they expect it to be a lot slower.
35:09
And I still think it's a very solid quality brand that people aspire to.
35:15
I walk around New York, I see the kids.
35:18
They've either got Man United shirts on or Ferrari shirts, both of them.
35:24
It'll be an ASML story.
35:26
I mean, ASML came down this year because of a trading update, I think it was.
35:30
And look, as you said the other day, David, it goes shooting up again.
35:33
The same thing will happen with Ferrari, I'm sure.
35:37
I'll give you a stat that will tell you why that may not be true.
35:41
In the last 40 years, the number of people that have driver's license in the US has
35:46
dropped dramatically.
35:48
I mean, I think around about 97% of kids, like 20-year-olds basically, in like an 80
35:53
had a driver's license.
35:55
It's like 75% now.
35:57
And I think over time what's going to happen is that, I mean, I like luxury
36:00
goods.
36:00
I think if AI takes off, we get 5-10% global GDP growth rates.
36:04
Luxury goods are going to be in demand.
36:05
I don't think either that luxury cars are going to be something that's going to be
36:08
around.
36:09
It's going to be like horses.
36:09
Yeah, back in the day, all the rich guys wanted horses.
36:11
You know, Viv, the one thing about Ferrari that I can't comprehend.
36:17
you know that just doesn't make any sense if you go to there's certain people the
36:24
rich people they've got four
36:26
five ferraris you know i mean that's you're in a different caliber they don't
36:32
they're not buying a car to get from a this
36:34
is this is like a collector's item it's the same as those who buy these burking
36:38
bags you know ladies who buy burking
36:40
bags like they got five six ten of them you know what i mean and it's just such a
36:45
different market
36:47
It's not something that I understand, believe me.
36:50
There's even a Ferrari, David, that you buy but you can't drive, isn't there?
36:53
Isn't there some special...
36:54
Yeah, there are some.
36:55
Yeah.
36:57
It's the 50-year-olds, it's the 60-year-olds that have these Ferraris.
36:59
The 20-year-old kids don't.
37:01
Oh, by the way, I don't know if you guys saw today, did you see the raid in South
37:06
Africa, have you talked about it yet?
37:08
No.
37:10
Where that Manuela Trust, I think four or five Lamborghinis were taken out of his
37:12
house.
37:12
This is the guy that was accused of the tender fraud, the two billion run tender
37:19
fraud.
37:19
And apparently they started to raid the house and stuff.
37:21
And so they're taking these things out.
37:23
But the thing I see right now is that I understand why people want the Ferraris.
37:29
But do you think Elon Musk is buying Ferraris?
37:31
Do you think these kind of guys are buying Ferraris at the moment?
37:33
That's not what they're doing.
37:36
And I see youngsters myself.
37:37
I mean, we have a young lady working with us.
37:39
She makes enough money.
37:40
She doesn't have a car.
37:41
she ubers everywhere uh and yeah and and and she says now she's like it's more
37:48
useful it's like you
37:50
know whatever and and i think that is the future driverless vehicles and that kind
37:55
of stuff but luxury goods i i think the birkenbags going to be
37:57
around i think the the luxury brands are going to be around people are still going
38:02
to buy those things but cars i think are going forward well in
38:04
that case i'm a trendsetter i'm not a trend follower i'm a trendsetter because i
38:09
haven't had a car for nine years and because i moved to the netherlands public
38:11
transport and uber do me absolutely fine.
38:12
Why do I need a car?
38:13
Why do I have to be behind the wheel and get stressed out and get road rage and
38:20
shouting obscenities in Dutch or trying to in Dutch to Dutch
38:22
people who can't drive properly or German tourists?
38:23
I'm much happier letting someone else take the strain.
38:26
Thank you.
38:27
So, Lindsay Williams, trendsetter yet again.
38:30
Viv, I interrupted you, I think.
38:32
No, no, no.
38:34
I think luxury goods are going to be a thing.
38:35
I think if you were to be playing the ball in the next 10 years, maybe AI companies
38:40
themselves might not be the...
38:42
the things to go to.
38:44
But I think imagining a world that's significantly richer 10 years from now is
38:47
not a bad way to think of things.
38:49
And I think if we do that, if we do expect 10%, 5% GDP growth rate, maybe not buying
38:53
Microsoft, but maybe buying the luxury good brands that are going to be what are
38:57
these millionaires going to spend their money on,
38:59
or buying the high-end apartments where all these millionaires want to go and live
39:03
in their fancy lives out,
39:05
might be an interesting way to approach the AI bubble.
39:09
or the AI trade, let me see.
39:11
There's an apartment block with views of Buckingham Palace and the only people that
39:17
they're allowing to come and
39:19
have a viewing are certified billionaires.
39:21
Most of them are American, I might add.
39:23
I don't know how many billionaires have been created over this last two years with
39:28
AI,
39:28
but I'm sure there's been a big spike in them.
39:31
Anyway, we're talking fanciful stuff here and I'm going to have a look at the
39:36
markets because the dollar ran.
39:38
It's 17.17, which has barely changed.
39:39
The British pound against the round, 22.82.
39:42
And the mighty euro against the round is 19.85.
39:46
The euro against the round, rather, the mighty round, 19.85 now, which is
39:52
gratifying.
39:54
Euro dollar is 1.1560.
39:55
How can the dollar be strong, the euro be weak, and the gold price be strong as
40:00
well?
40:01
It's got to be that fear of missing out trade in gold.
40:04
It has to be.
40:05
How can the gold go up?
40:06
and the dollar go up and the stock market go up.
40:09
It doesn't make sense to me.
40:10
Gold price itself is down today by 0.7%, about as much as the dollar is up.
40:15
4,010 is that yellow metal, was 4,050 yesterday.
40:20
Platinum, 16.90, which is down $11 an ounce.
40:24
Palladium has been doing well, up 100 yesterday, up 29 today to 15.12, closing
40:31
in on platinum.
40:33
That's a big one, up nearly 2% today.
40:34
and other commodities.
40:36
The one that we've added to our list in the last few weeks has been copper because
40:42
of its, because I just think it's going up,
40:44
but also because of its South African links suddenly with the Anglo story.
40:46
$5.11 and a bit for copper, which is a new recent high, up over 2%
40:53
on the day.
40:54
Crude oil, $62.24, that's for West Texas, down 0.5%, and Brent crude oil down 0.6%
40:59
to $65.84.
41:02
Elsewhere, another speccy one.
41:05
is Bitcoin went to 125, now just below 121.
41:08
That's down 1.1% on the day.
41:10
South African 10-year bond homing in on 9% on the downside.
41:15
It's 9.05 at the moment, that yield, so the bond market's strong.
41:19
And the US 10-year bond, the yield up very slightly to
41:23
4.15%. S&P 500 futures went above 6,800 for the first time yesterday,
41:28
down today by a third of a percent to 67%.
41:34
6,776 for S&P December futures.
41:38
David, stocks up and down on the JSC or any news on the JSC that caught your eye?
41:43
Not really.
41:44
I just think that there's been a little bit of a sell-off in gold shares and in
41:48
platinum shares.
41:50
And the odd thing is that there are a lot more gainers than there are losers.
41:52
But market down 0.67 of a percent.
41:59
A little bit of easing, mainly because of the sell-off in gold and platinum shares,
42:05
but banks quite strong.
42:07
I'm not quite sure what's driving that,
42:09
whether it's just a belief that rates are going to come down and things are starting
42:15
to look
42:15
up there.
42:15
But banks have been just picking up slightly.
42:18
There haven't been performers this whole year, but I think we're starting to see a
42:22
bit of money.
42:23
There must be a lot of money just floating around trying to find a home.
42:26
It can't all go offshore.
42:29
So I'm sure a lot of the market is propped up by just the weight of money.
42:33
You know, property also up a little bit as well.
42:38
It's also been a sector that's benefiting from, as those long-term rates come down,
42:43
you know,
42:45
property shares start to pick up as well, you know, on valuations, on yields.
42:48
So, yeah, overall a good day, 25 billion traded.
42:52
Okay.
42:53
I think Viv's eyes glazed over when you started talking about that, when I started
42:58
talking about it.
43:00
the JSC.
43:02
It is still a part of your life, isn't it, Viv?
43:04
I've just said JSC has outperformed, but you talked about the banks.
43:06
Look at APSA's P-ratio versus dividend yield.
43:07
It still gets me just how cheap they are at the moment.
43:09
The market is pricing a lot of negativity about our banks still.
43:13
If we had a reasonable P-ratio, a real reasonable dividend yield on this thing
43:17
here,
43:17
I would suggest a company like APSA would be significantly higher than it is right
43:22
now.
43:22
John Bickhardt would love you for that because exactly what he's been doing, one
43:28
of his biggest holdings.
43:30
On the JSC today, Sappy bouncing back by 6.2%.
43:31
South 32, three and two thirds percent higher.
43:33
First round, a bank up 3.3%.
43:36
Discovery 3.1% to the good.
43:38
And pick and pay yesterday was up about 5%, I think.
43:42
Today up another 2.8%.
43:44
On the downside… There's a trading statement out, yeah.
43:46
Oh, was there?
43:47
Which I think is moderate, yeah.
43:48
Okay.
43:49
There's nothing brilliant about it, but… probably slightly better than the market
43:53
expected.
43:55
If you take Boxer out of pick and pay, there's nothing left.
43:56
I won't say anything.
44:02
I think the price of pick and pay actually probably reflects its holding in Boxer,
44:08
which is a sad reflection of a business that once dominated the industrial sector
44:15
of the
44:15
market.
44:16
On the downside, the JSC's resources stocks have given up everything that they
44:21
gained yesterday.
44:23
I mean, look at Sibania, still water down 7.4%.
44:24
Advertec, not a miner, of course, but that's down 6.1%.
44:27
That must be an ex-div story, I think.
44:29
Impala Platinum down nearly 5%.
44:32
Pan-African Resources down four and three quarters.
44:34
And Valterra, formerly Anglo-American Platinum, down 4.7%. So, you know, good
44:41
day yesterday,
44:43
bad day today.
44:45
The technicians will be looking at this.
44:47
I know they'll be looking at this.
44:49
They'll be looking at the new highs on the resources index.
44:51
They'll be looking at the new highs on gold.
44:53
They'll be looking at the sort of mini reversal pattern today.
44:54
And they'll be screaming sell on these things.
44:57
They've been waiting for this sort of thing.
44:59
So watch out for the close this evening.
45:01
There may be some money coming in on the sell side.
45:04
David?
45:06
When I look at the charts, and I'm not a technician, but when you look at the
45:11
charts on some of those gold shears.
45:13
gold itself, you know, it just screams, okay, this is dangerous.
45:16
You know, this is seriously dangerous.
45:19
And that's why I think it's very difficult to, you know, to stand by it at this
45:24
stage.
45:24
I'm not saying for those who've got it.
45:26
So, yeah, it is from a technical point of view, I can't see people being bullish.
45:31
Gentlemen, I've kept you far too long, but thank you very much.
45:36
We had lots of catching up to do.
45:37
David Shapiro is from Sessom Securities, Viv Govender from the award-winning Ram
45:44
Swiss, and that was the 5 o'clock shadow.
45:46
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45:51
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45:53
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46:00
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