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

• 0:00
  You're listening to Strictly Business Podcast with Lindsay Williams.
• 0:05
  The JSC has closed its doors for another day, so it's time for the 5 o'clock
• 0:08
  shadow.
• 0:08
  And as always on a Thursday, I speak to the giant brains of Viv Govender from the
• 0:14
  award-winning RAND Swiss
• 0:16
  and David Shapiro from Sassfin Securities. David, I saw the
• 0:20
  US CPI data following yesterday's PPI data.
• 0:23
  The CPI came out this afternoon and the market started to...
• 0:26
  not roar ahead, but steadily climb.
• 0:29
  And the commentary was, oh, these are really good numbers for an interest rate
• 0:33
  cut.
• 0:34
  That rose from 2.7% year on year in July to 2.9%
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  year on year in August.
• 0:41
  And the month on month was up as well.
• 0:43
  I don't see where the good comes in.
• 0:44
  To me, inflation went up.
• 0:46
  Am I wrong?
• 0:48
  Well, you know, this is the first, I mean, generally the Fed looks at inflation.
• 0:53
  But I think in this case,
• 0:55
  They're going to look at the job numbers and employment.
• 1:01
  And I think if you look there, even today, the claims was up quite considerably.
• 1:07
  In other words, more people are losing their jobs, making claims on unemployment.
• 1:11
  So I think this is, you know,
• 1:13
  the dual mandate of full employment and the other is price stability.
• 1:20
  or so I think...
• 1:23
  You know what interested me is that I thought all I hear is, yes, there's a 25
• 1:29
  point for September.
• 1:31
  I think that's in the market.
• 1:33
  But when I looked yesterday, it looks like there's more than one.
• 1:36
  It could be up to three cuts this year in the market.
• 1:40
  Now, whether this is going to happen or not, we're going to hear next week what
• 1:45
  Mr. Powell says.
• 1:47
  But I must say there's growing views that this is imperative for…
• 1:51
  you know for Powell to bring down rates and to give the other market a little bit
• 1:58
  or the other side of the economy a little bit
• 2:00
  of a kick you know as Viv says he's worried about the high levels of profits
• 2:05
  that he's making you know
• 2:07
  he feels he doesn't deserve it and he wants to give some back so what what I'm
• 2:12
  saying we
• 2:12
  can't talk about Viv's personal life David this is this is for public consumption,
• 2:18
  but anyway.
• 2:20
  Viv's laughing.
• 2:20
  What I'm trying to say, that's the other market.
• 2:22
  You know, the AR market, I mean, is just crazy.
• 2:25
  And we'll talk about Oracle in a few minutes' time.
• 2:28
  Yes, we will.
• 2:29
  Larry Ellison, congratulations to him.
• 2:30
  At 81, he's the richest man in the world.
• 2:32
  I sent out a tweet.
• 2:33
  I wonder if you could measure who the poorest man in the world is.
• 2:37
  But Larry Ellison, would you rather be Larry Ellison or Elon Musk?
• 2:41
  I suppose Elon Musk has got a lot more time to spend.
• 2:45
  His ill-gotten gains, isn't he?
• 2:48
  Viv, you're agreeing with me.
• 2:49
  You'd rather be Musk rather than Ellison.
• 2:53
  I mean, once you get to like, I mean, I even think, let's get a few hundred
• 2:57
  million dollars.
• 2:59
  The idea that you could reasonably spend that money, you know,
• 3:00
  in a lifetime is ridiculous because every year you're getting a few million dollars
• 3:06
  coming through just as, you know, passive income.
• 3:08
  So when you have billions, I mean, it's really going to be a case of ego.
• 3:10
  $400 billion is an amount of money that in a year would generate.
• 3:15
  like over $10 billion just in like normal like returns, you know what I mean?
• 3:19
  In interest returns, risk-free returns.
• 3:22
  So yeah, you much rather be the younger person, whatever the person's name is.
• 3:25
  But with Adelie Edison, the interesting thing here is that he actually owns more
• 3:30
  of Oracle now than when
• 3:32
  he started off when it was first listed because of the fact that all the share
• 3:35
  buybacks.
• 3:36
  And that's been like raising the amount that he owns in the company like over
• 3:39
  time.
• 3:39
  And the interesting thing about this is that also we are seeing the impact of, you
• 3:46
  know, The downstream things,
• 3:48
  for instance, the most valuable company in the world is really upstream.
• 3:49
  It's basically the guy who makes the chips.
• 3:51
  And then we have the people developing those chips and whatever downstream, which
• 3:57
  is like AI companies, like
• 3:59
  OpenAI and so on.
• 4:01
  But also the cloud companies, because Oracle is basically getting this huge
• 4:05
  kickoff because of the cloud demand that's coming through because of AI.
• 4:07
  Okay.
• 4:07
  So there's our Larry Ellison chat.
• 4:10
  Go on, David.
• 4:11
  You know, Mr.
• 4:12
  Ellison has won the America's Cup.
• 4:15
  Oh, he's a sailor, is he?
• 4:16
  That's his hobby.
• 4:17
  Not racing, which can take up a few billion to build these machines.
• 4:24
  So I think he also fancies jets.
• 4:27
  I don't know what else, and fighter planes and that.
• 4:29
  So I think there are plenty of areas where he can actually spend and enjoy it.
• 4:34
  Well, at least he does his on Earth rather than Mars, which is where Musk goes.
• 4:38
  Well, it's not in space, but it is pretty high up.
• 4:41
  Yeah, those yachts, you know, those America's Cup yachts are extraordinary.
• 4:47
  There used to be a couple of chaps with ropes and canvas and everything, but now
• 4:52
  it's the I mean,
• 4:54
  these are almost more sophisticated than a SpaceX rocket, these things.
• 4:58
  I don't know if you've seen them, Viv.
• 5:01
  Yeah, but even Davidson, it's actually a couple of hundred million at most.
• 5:05
  So think of it this way.
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  Larry Ellison at $400 billion, and if he gets even a 5% return,
• 5:11
  20 billion dollars basically of uh you know of income coming in a year
• 5:16
  It will take not even a week for him to basically get more money than he could
• 5:23
  ever spend on the America's
• 5:25
  Cup.
• 5:27
  That is what I'm saying.
• 5:29
  When you have this kind of money, it's literally impossible to spend it.
• 5:31
  Every year, you have another 20 billion in the America's Cup.
• 5:32
  It's a problem to deal with in terms of more money coming in.
• 5:34
  Forgetting about how much money is making just for the stock price rising.
• 5:37
  So, yeah, it's a ridiculous amount of money.
• 5:40
  Viv, what you're going to do while I'm speaking to David briefly is...
• 5:43
  Work out the 400 billion at 5%.
• 5:46
  When does he become a trillionaire?
• 5:47
  That's a nice easy one for you.
• 5:50
  With compounding interest, when does he become a trillionaire?
• 5:53
  How many years?
• 5:53
  Will he become a trillionaire before he's 100?
• 5:56
  David, while Viv does that,
• 6:01
  can you tell me a little bit about what happened on the JSC today?
• 6:05
  Because we had First Rand and the shares shooting up, and we also had Discovery.
• 6:09
  Did you look at both of those?
• 6:13
  I looked at them, yeah.
• 6:14
  There were two results out today.
• 6:17
  There was First Rand and Discovery,
• 6:19
  which used to have a connection at some point of their existence.
• 6:24
  But I couldn't see anything exceptional about First Rand.
• 6:28
  It's good.
• 6:29
  It's a very solid result.
• 6:31
  Remember, I think they've got very good brands.
• 6:34
  I'm not a great supporter of the big banks, but they've got West Bank,
• 6:40
  they've got RMB.
• 6:42
  And they just produce very solid, steady profits.
• 6:45
  And, you know, 10% is probably at the top side of where we could have expected them.
• 6:51
  But, you know, it's a pretty decent earning.
• 6:53
  And why the markets responded the way it has, I'm not quite sure.
• 6:58
  I just, Lindsay, I just think markets are urging to go.
• 7:03
  And you can feel that they want to go.
• 7:07
  You know, we've seen it with gold shares, platinum shares.
• 7:10
  And I think it's coming down to those companies that underperformed.
• 7:15
  And your good friend, the very nice hedge fund manager, value fund manager,
• 7:22
  Mr.
• 7:23
  John Bickard, I think could be right.
• 7:26
  I honestly, you know, for whatever reason, I think that some of those companies that
• 7:32
  have been smashed down,
• 7:34
  despite the fact that the SA economy is battling along, it's really struggling.
• 7:39
  I think And there's a kind of urge to push these share prices up.
• 7:44
  And it's in line with the rest of the world.
• 7:48
  Interesting.
• 7:48
  Because I think headline earnings per share for first round was up 10% or
• 7:53
  something.
• 7:53
  It was very pedestrian.
• 7:54
  But I think what happened was that they performed well despite the fact they had a
• 8:00
  tax problem, David.
• 8:02
  No, I don't want to talk about tax.
• 8:04
  And it's still there.
• 8:06
  Yeah, exactly.
• 8:08
  That's still there.
• 8:10
  And they've made a provision for that.
• 8:12
  It may be, you know what?
• 8:14
  In fact, you've hit on a point that may be why the share price went in.
• 8:16
  In other words, they've identified, okay, we're putting away X.
• 8:18
  Yes, exactly.
• 8:20
  Before it was open-ended.
• 8:22
  No one was quite sure how much this could cost them.
• 8:24
  Yes.
• 8:26
  This is the claim in the U.S., this motor claim,
• 8:28
  that that might be a very valid reason that you've just brought up, that people,
• 8:33
  it's almost relief.
• 8:35
  Okay, we can move ahead.
• 8:36
  It's held us back in the past.
• 8:38
  There's an, we can identify how much they've set aside, which is likely the
• 8:43
  upper end of what a claim could be.
• 8:45
  Let's move ahead.
• 8:47
  Exactly.
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  And it reminds me of what a bookmaker said to me in Johannesburg when I first came to
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  Johannesburg.
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  And, you know, it was very lax.
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  You could run up an account and just pay when you could.
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  And of course, I ran up an account and he said, Lindsay, it's been a month now.
• 9:02
  Pay and the pain goes away.
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  And I always remember, so that's what First Round are doing in a way as well.
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  Viv, could it be a 50 basis point cut next Wednesday from Powell and his team?
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  Because the last time that happened actually was quite recently.
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  It was during, it was right at the end of the Biden administration.
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  He cut 50 basis points then.
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  And I think that people said that was politically motivated.
• 9:27
  Could there be a political 50 basis points from the Fed, Viv?
• 9:31
  It's possible.
• 9:32
  Thank you.
• 9:33
  Just on first round, I mean, the results are 10%.
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  But look at the P ratio, 11.
• 9:36
  Look at the dividend yield, 5.
• 9:38
  A company growing at 10%, well, that is still cheap, those ratios.
• 9:43
  But, yeah, looking at Powell's decision, I mean, did you guys see that million job
• 9:48
  miss?
• 9:50
  Yeah, 911,000.
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  That's 76,000 a month.
• 9:53
  That was quite startling.
• 9:55
  Go on, Viv.
• 9:55
  Yeah.
• 9:56
  So that means that basically, I mean, there was a term coined at the end of
• 10:02
  Biden's administration called the vibe session.
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  And people are saying that the numbers look great, but people just don't feel
• 10:06
  happy.
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  It turns out when you are given a choice between people's feelings and numbers, the
• 10:10
  people's feelings are usually right.
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  And it appears that the US economy was actually a lot weaker than people have
• 10:14
  been thinking,
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  just because the official numbers were basically overstating how many jobs there
• 10:20
  were in the country.
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  Like I said, 77,000 every month for like the last year, until March, basically.
• 10:26
  showing that if the economy is that much weaker, that it kind of makes sense that
• 10:30
  if the Fed was thinking, you know,
• 10:32
  about cutting previously to these numbers coming out, they should be much more
• 10:35
  convinced to cut right now.
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  And maybe, like you said, a 50 basis point cut in this scenario might even be
• 10:39
  justified.
• 10:40
  Okay, well, we'll wait and see.
• 10:42
  Just before we go to the numbers, I want to talk about the assassination of Charlie
• 10:48
  Kirk last night because it was
• 10:50
  around about nine o'clock.
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  And as soon as it came up and said, they don't know what his condition is, I knew
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  he was dead.
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  And the blame game has started.
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  Who started what?
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  We've got to stop this rhetoric, and it all started with this person.
• 11:04
  That means nothing.
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  What it does show, and David, you're going to the States next week.
• 11:09
  It shows a desperately and disastrously divided nation, and it's quite dangerous,
• 11:15
  isn't it?
• 11:17
  Totally.
• 11:19
  You know, when it came out and I saw it, and I actually saw a video,
• 11:24
  Which is really of him being shot.
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  Someone was taking a picture and you just see the bullet hit his neck and you see
• 11:33
  the blood spurt out.
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  It's something that they couldn't even do in the movies.
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  And it is really frightening.
• 11:39
  But you know, you bring it up.
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  This is a divided nation.
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  And where you have a divided nation like this,
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  where the rhetoric is so angry and so bitter.
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  you're going to get individuals acting this way.
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  You know, because they come frustrated that they can't get their way, I think
• 12:02
  they exercise their anger.
• 12:04
  And this is not groups.
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  These are individuals.
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  They exercise this anger, you know, by extreme measures, which is like
• 12:10
  assassinations.
• 12:12
  And I think, you know, as you mentioned,
• 12:13
  I think they will occur in a country that is kind of polarized or fragmented.
• 12:20
  So, and, you know, to be honest.
• 12:22
  The man at the top is not exactly an angel.
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  You know, he's not the man.
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  He himself is a man who creates or has created a lot of division
• 12:34
  within the population on both sides.
• 12:36
  So it's not only you're getting extreme right-wing
• 12:43
  violence, you're getting it on the left as well.
• 12:46
  We assume it was on the left, but yes.
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  So, you know, I...
• 12:51
  For me, it identifies where America is.
• 12:57
  And the strangest thing is that today it's 9-11, hey?
• 13:01
  And this was the last act where actually people felt unified.
• 13:05
  They felt American. It lifted their spirits.
• 13:09
  It made them very bipartisan.
• 13:12
  Everybody was in the same boat.
• 13:13
  And it's so strange that it's come.
• 13:15
  And here you are 24 laters.
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  You've got a completely divided country.
• 13:20
  Anyway, I just feel very bitter, angry about it and very sorry, you know,
• 13:25
  certainly that this is the way that people are venting their frustration.
• 13:30
  Maybe it'll be one of those things where people say, right, that's enough now.
• 13:34
  Let's tone it down on social media.
• 13:36
  I mean, that woman that we follow occasionally, David Jojo from Jers.
• 13:41
  I mean, she's funny and everything, but down there she deeply, deeply hates Donald
• 13:46
  Trump.
• 13:46
  Yeah.
• 13:47
  And that does come across maybe people like her.
• 13:50
  on the left and you know people like um james woods the actor on the right have
• 13:57
  have got to stop now viv you can come in come in here looking looking at this
• 14:04
  i saw a video and it's quite sad because i've got a daughter the same age and he's
• 14:11
  a video his daughter running up to him like you know at some previous point you
• 14:13
  know not a bit at that date and calling no daddy and stuff and then apparently she
• 14:15
  was
• 14:15
  at the event or his family was at the event and so i just think to myself you
• 14:21
  know that's it's a person with a kid a very young child a
• 14:23
  three-year-old uh and i think another a younger child as well uh and then from
• 14:28
  from that's just that's your point of view it's not these
• 14:30
  people you know that are killed but what i do have to say that you know the us has a
• 14:35
  history of this i mean people forget how dangerous the 60s were
• 14:37
  you killed the president you killed the president's brother you killed the number
• 14:42
  one civil rights leader in the country you killed uh he's number two as well
• 14:44
  You talk about murders were happening all the time, multiple bombings.
• 14:47
  The US has a very violent kind of streak through it.
• 14:51
  I mean, something you don't see in many other countries.
• 14:53
  I mean, you might have seen that in the UK with the IRA, but you're not seeing the
• 14:58
  Tories and the
• 15:00
  Labour Party going like that.
• 15:01
  But the US, you might be seeing something like that happen.
• 15:04
  And the danger here is that normally in these situations, you have people in
• 15:10
  charge that are going to tamp things down.
• 15:12
  I remember when Barack Obama had that whole kind of...
• 15:13
  with thoughts and prayers kind of stuff happening when uh that uh madman killed a
• 15:20
  whole bunch of people in a black church uh
• 15:22
  trump is not doing that trump is saying you know we're gonna go after the people
• 15:27
  that did this he's ramping things up uh and
• 15:29
  you know my fear is that you know we don't trump will push things when the economy is
• 15:33
  the thing that went against him.
• 15:35
  We see an economy that's weak at the moment.
• 15:37
  It'd be a very easy thing for him to do to try and push forward.
• 15:40
  You know, we're under threat.
• 15:41
  It's a dangerous kind of environment.
• 15:44
  If, you know, the economy is suffering and that kind of stuff.
• 15:46
  And that is the fear I have at the moment.
• 15:48
  It's that, you know, he's going to be using this not as a case of, you know,
• 15:53
  he's going to use this as if George Bush used it as a political event.
• 15:59
  And basically went after his enemies and said it was the Democrats that led all
• 16:05
  these, you know, foreigners into the country around 9-11.
• 16:07
  It could be a very different country at the moment.
• 16:07
  And I think, unfortunately, Trump's going to do something like that.
• 16:10
  Oh, gosh.
• 16:10
  Well, I hope not.
• 16:11
  OK, let's move on to things that we can try and understand.
• 16:15
  And that's the markets where the dollar round is 1741.
• 16:18
  The round really is doing so well.
• 16:21
  And I had an interview yesterday with somebody who's in the.
• 16:25
  in the bond market and the South African bond market, if you look at it compared to
• 16:31
  its developed market peers, has done so well.
• 16:33
  For example, I'll come to that in a second, the 10-year.
• 16:34
  But let's carry on with the currencies.
• 16:36
  British pound against the round 23.63.
• 16:39
  The euro round is 20.44.
• 16:41
  Euro dollar 1.1740.
• 16:44
  That is a euro that is a percent higher in 24 hours.
• 16:48
  British pound against the US dollar 1.3575.
• 16:53
  The pound up 1.2%.
• 16:54
  percent Gold price is $36.37, which is down slightly.
• 16:59
  The platinum price is flat at $13.98.
• 17:02
  And Palladium, which had a really good day yesterday, has had another good day today.
• 17:06
  $12.32, up $20 or 1.6%.
• 17:11
  Now, other commodities.
• 17:13
  And I'm adding copper, gentlemen, to the normal, just crude oil, apart from the
• 17:19
  precious metals,
• 17:21
  because of what Harmony has done.
• 17:21
  And also, more importantly, the tech and Anglo merger, which is all about copper.
• 17:28
  But we've got West Texas crude at $62.57, down 1.7%.
• 17:32
  Brent crude oil at $66.52, down 1.4%.
• 17:36
  And the copper price is up 0.9% in New York.
• 17:39
  This is dollars per pound on the commodity exchange in New York, 4.583,
• 17:47
  which is, as I say, it's close 1% up so it's 458 And doing rather nicely.
• 17:53
  What else we got?
• 17:54
  We got the US 10-year Treasury bond, which is just about to break 4%.
• 17:58
  4.003 at the moment, another two and a half basis points down on the yield.
• 18:05
  And that's after the CPI data and the jobs data today.
• 18:09
  The South African 10-year, five months ago, almost to the day,
• 18:14
  this was 11.08, I think it was.
• 18:18
  It's now 9.38.
• 18:20
  Another 10 basis points down.
• 18:22
  The strength of the RAND, the strength of the bond markets overseas.
• 18:26
  This is an extraordinary performance.
• 18:29
  It's like 170 basis points in five months.
• 18:32
  If you'd have been long of that, well done to you.
• 18:35
  S&P 500 futures, 6583, up 0.7%, close to all-time record highs.
• 18:41
  In fact, they are all-time record highs.
• 18:44
  And the Bitcoin price also doing very well indeed, 114,500.
• 18:49
  plus a little bit of change.
• 18:51
  So, David, things going well.
• 18:53
  This is an extraordinary bull market, isn't it?
• 18:55
  It just keeps on going.
• 18:57
  I know.
• 18:58
  And, you know, it could continue for some time.
• 19:03
  I'm not, you know, one does get a little nervous, but you can feel the momentum,
• 19:09
  you know,
• 19:11
  building up and ready to go.
• 19:13
  And a lot depends on what Powell says.
• 19:14
  But if he says the right thing.
• 19:16
  and he moves towards reducing rates,
• 19:19
  then this can continue and can broaden out.
• 19:24
  The one thing, this is still very much an AI market.
• 19:28
  I use AI in a much broader sense.
• 19:31
  It's still driven by 20-odd tech companies or maybe a little more,
• 19:37
  some of the smaller ones.
• 19:38
  We haven't quite seen it migrate or go into…
• 19:46
  other areas of the market.
• 19:47
  So for the first time actually today with the CPI,
• 19:52
  I have seen companies like Walmart and JP Morgan, Visa and those companies, Costco
• 19:59
  and that pick up as well.
• 20:01
  But I think that's starting to now reflect lower rates.
• 20:04
  But look, after Oracle's numbers yesterday,
• 20:08
  where I have never in my life seen a company of that magnitude.
• 20:13
  This wasn't a small company.
• 20:15
  put on 40 percent.
• 20:17
  It wasn't as though it was at the bottom end of the market.
• 20:20
  This was already had a very high cap, you know, it was in maybe the top 20 shares on
• 20:25
  the S&P.
• 20:25
  And I'm just absolutely astonished.
• 20:28
  But what and I'd love Viv's view on this, because when you look at what they're
• 20:33
  saying,
• 20:33
  the amount of money that's going to be spent.
• 20:36
  On their cloud, you know, it's an astonishing outlook.
• 20:39
  And I think that has given the AI market or the technology market just another
• 20:44
  boost, another lift.
• 20:46
  Viv, that's your invitation.
• 20:48
  Look, I mean, it kind of makes sense.
• 20:50
  If you're going to have a $4.5 trillion company making the chips, the guys that
• 20:55
  are going to be buying the chips have to make more money than that.
• 20:57
  You know what I mean?
• 20:59
  And then the guys that are going to be using these clouds and stuff have to make
• 21:01
  more money than that.
• 21:03
  We need to start seeing...
• 21:05
  huge huge gdp increases to justify these things here and the fact that we are
• 21:10
  seeing demand coming through as strongly as you are for cloud gives me some hope
• 21:12
  that
• 21:14
  we are going to be seeing uh you know these these things coming through and it
• 21:16
  also makes me wonder as well you know if you look at um the why
• 21:18
  did the jobs numbers miss that much because the jobs numbers are a sample
• 21:21
  samples
• 21:23
  only work when the underlying entity has not changed you know what i mean so if you
• 21:27
  take a sample of something it correlates within the state of the underlying entity
• 21:29
  but if the underlying entity has changed in some fundamental way.
• 21:31
  samples no longer give you the same kind of accuracy.
• 21:34
  And it makes me wonder whether or not the U.S.
• 21:36
  economy is changing so dramatically in a way that sampling is no longer working as
• 21:42
  well because
• 21:43
  the underlying economy has changed fundamentally.
• 21:45
  And I think that could be something also indicating that AI may be feeding into the
• 21:52
  economy faster than people have been anticipating.
• 21:54
  Does it also tell you that there's a lot of money going into mutual funds in the
• 21:57
  United States?
• 21:59
  in order to fuel this market?
• 22:00
  Because where's the market coming from?
• 22:02
  Viv, stay with you on this one.
• 22:04
  What do you think?
• 22:05
  No, but I mean, the mutual funds aren't buying Oracle's cloud services, you know
• 22:10
  what I mean?
• 22:12
  So there is actually something happening there.
• 22:14
  There is actually some underlying demand coming through that Oracle thinks that
• 22:21
  it's going to be seeing this huge
• 22:23
  kind of cloud demand at the moment.
• 22:25
  So I do think that there is something happening.
• 22:27
  I mean, businesses...
• 22:29
  Maybe they are overdoing it.
• 22:31
  Maybe it's dot-com part two.
• 22:33
  But at the moment, it does appear that there is some kind of use case out there
• 22:36
  that businesses are
• 22:38
  seeing or someone is seeing that they want to be using Oracle's cloud to basically
• 22:41
  utilize AI.
• 22:43
  Well, anyway, it's all going to fall in the heat when the electricity gets turned
• 22:47
  off because
• 22:49
  your companies that you're both invested in are using far too much electricity.
• 22:51
  And I saw a chap at the World Economic Forum on their website,
• 22:54
  and he came up with a very plausible argument as to why they're going to go
• 23:01
  into space and put these giant
• 23:03
  solar panels and beam it back down to Earth.
• 23:04
  And that will solve the problem because there's not enough space on Earth to put
• 23:11
  the power facilities in
• 23:13
  order to power AI.
• 23:15
  So that's solved.
• 23:17
  Okay.
• 23:19
  On the JSC today, the first Rand share price was the top.
• 23:21
  performer of the top shares, 6.1% higher.
• 23:22
  African Rainbow Minerals up 3%, Life Healthcare up 2.6%, and AVI up 2.3% on the
• 23:29
  downside.
• 23:29
  This is extraordinary, because David, we spoke about Discovery after their trading
• 23:34
  update the other day.
• 23:36
  And the trading update was really good, and the share price jumped 10% or
• 23:39
  something like that.
• 23:41
  Well, it's fallen around 10%.
• 23:43
  In fact, it's fallen on the results 9.25%. So what are they seeing in the results
• 23:48
  that weren't in the trading update.
• 23:50
  And there's miscommunication there from their PR company.
• 23:51
  And I think that's very naughty or remiss of them.
• 23:55
  Go on.
• 23:58
  I was one who was captivated by the trading update, particularly what they
• 24:04
  were doing in the UK.
• 24:06
  But they do say now that I hate the word headwinds, but they use the word
• 24:10
  headwinds.
• 24:11
  They're finding both headwinds in China.
• 24:14
  and you know in the UK and this is where the growth came.
• 24:17
  If you look at the local business, things are down.
• 24:19
  You know, in other words, they're not selling as many policies now as they did.
• 24:23
  All the growth in policies is beginning to slow down considerably.
• 24:27
  So what they call their, what's it, premium income, their, you know,
• 24:34
  annualized premium income.
• 24:36
  And that's starting to come down.
• 24:37
  So when you look at, you know, their health, life, invest and insure,
• 24:43
  all of those are slowing down, even though the numbers were good.
• 24:46
  I think that scared people.
• 24:49
  But new business volumes, we see it in all the insurers, are very,
• 24:54
  very difficult to grow in an environment which you point out is not growing.
• 25:00
  The other one is that the bank, the bank's still chewing cash, another 68 million
• 25:06
  rand loss or something.
• 25:08
  I don't know what the exact number was.
• 25:10
  So I was disappointed.
• 25:12
  I was quite, you know, I was quite optimistic for the first time in a long
• 25:15
  time when I saw the update.
• 25:17
  But when you dig down into the numbers, I think there are a few obstacles that they
• 25:20
  have to get through.
• 25:22
  To me, that bank was an ego driven folly.
• 25:23
  But anyway, that's just me.
• 25:25
  Anyway, other companies not doing so well.
• 25:27
  Tungela down six and a quarter percent.
• 25:29
  Bytes down nearly four percent.
• 25:31
  Pan African Resources down two and a half and Northam's down.
• 25:34
  2.1%.
• 25:35
  Okay, before we go to the indices, I've got to ask you a question, you two.
• 25:39
  And Viv, I'll start with you on this one.
• 25:41
  A friend of mine phoned me up today and she said, my company's issued what they
• 25:46
  call a code red.
• 25:48
  They've already been cutting back this company.
• 25:48
  It's a giant global conglomerate.
• 25:51
  The share price has been doing horribly over the year, bucking the bull market
• 25:55
  trend.
• 25:57
  They've now issued a code red.
• 25:59
  They're forcing people to come back to work four days a week.
• 26:01
  I think trying to put people off and saying, OK, I'll leave because they they
• 26:06
  want to cut costs.
• 26:08
  And even silly things like 50 euros a month that they would give out as
• 26:13
  fitness benefits.
• 26:14
  You know, if you can prove that you've improved your fitness via your app on your
• 26:20
  watch or something,
• 26:22
  you get this 50 euro voucher from a shop.
• 26:23
  That's all gone.
• 26:24
  All benefits gone.
• 26:26
  Four days a week.
• 26:26
  Come back into the office.
• 26:28
  code red and we're cutting back in all our European centers.
• 26:32
  Would you say that's good?
• 26:33
  So I must have a look at this share price because they're getting rid of the fat and
• 26:38
  therefore it'll go up.
• 26:40
  Or would you say this is a death knell for this company?
• 26:43
  Viv, what would you say?
• 26:44
  Are you an optimist or a pessimist?
• 26:47
  A company like that, I'd be a pessimist.
• 26:49
  I like a company that has a growing revenue,
• 26:53
  not a company that's trying to improve by cutting costs.
• 26:56
  Unless it's something like, you know, where you're basically spending tens of
• 27:03
  billions of dollars on the thing that only marks a couple of weeks.
• 27:05
  Yeah, stop cutting your nose off and therefore you'll basically feel a lot
• 27:08
  better.
• 27:08
  Okay, so that's a sell from Viv.
• 27:12
  David, I tend to think, sorry Viv, you're breaking up a little bit there.
• 27:15
  I didn't mean to interrupt.
• 27:16
  David, I think you're a pessimist with Viv on this one.
• 27:21
  Yeah, I'm very happy at home.
• 27:25
  I love to go into the office.
• 27:26
  I go in there.
• 27:27
  The problem is that I do about a tenth of the work and I'm far more efficient at
• 27:34
  home than I am in the office.
• 27:36
  I realize that I'm being selfish because I'm not passing.
• 27:40
  I'm not communicating with young people and not mentoring them and so on.
• 27:44
  There's time to do that, but I'm enjoying home and I promise you, Lindsay, I'm 100%
• 27:51
  more efficient.
• 27:53
  then, well, that's a bit of an exaggeration at my age.
• 27:55
  But, I mean, even now, here you are.
• 27:57
  Instead of going home now, as we come off the conversation,
• 28:01
  I'm going to just go through a few points and finish off and I'll be finished in
• 28:07
  about 6.30 or something and then
• 28:09
  that's it.
• 28:11
  Whereas I would never do that at the office.
• 28:13
  Okay, well, thanks for your domestic arrangements.
• 28:15
  But what I was really asking was would you be a buyer or a seller of the company that
• 28:18
  I just described?
• 28:20
  You're a seller as well.
• 28:22
  Okay.
• 28:24
  Sorry for that long window.
• 28:26
  No, no, I enjoyed it.
• 28:28
  I've got this lovely picture in my mind now of you sitting down and doing a few
• 28:29
  points and going off for a run or something,
• 28:31
  getting a takeaway, whatever it is.
• 28:32
  But very nice.
• 28:33
  Thank you.
• 28:33
  Okay, so we've got two sellers on this one.
• 28:35
  I'll send you the chart of the company.
• 28:38
  Sorry, go on.
• 28:39
  David says that he's more efficient, but the point about him passing on knowledge,
• 28:43
  I would bet the amount of value David adds by being in the office and just, like, you
• 28:49
  know, shooting the breeze with young people is...
• 28:51
  Quite vast, actually.
• 28:53
  Imagine the experience these guys are getting by talking to him and
• 28:55
  understanding the history of the market, et cetera.
• 28:57
  And it may seem like intangible, but I mean, that is why the company has a
• 29:01
  future.
• 29:02
  It's because of that tradition of passing information.
• 29:04
  And being at home, you do your own KPIs, yes, but the benefit to the company that
• 29:10
  they lose out for not having you actually just
• 29:12
  passing information.
• 29:14
  It's going to be quite large.
• 29:16
  Well, yeah, the youngsters are boring today.
• 29:17
  Hey, hey Lindsay.
• 29:19
  Oh God, I can't stand the...
• 29:21
  I really can't stand young people and it's obviously because we're getting old, but I
• 29:27
  can't stand them.
• 29:29
  They're not the same people that we were, David.
• 29:30
  I don't know about Viv.
• 29:33
  He's a dark horse.
• 29:36
  I agree with you, they're terribly boring, but Viv makes a very good point.
• 29:40
  They should wheel out old people like you occasionally.
• 29:43
  to come in and have a chat and say things like, I remember in the old days we used
• 29:48
  to do this and this and this.
• 29:50
  And I am being facetious, of course, but it is terribly interesting.
• 29:51
  I mean, that's why I love talking to you.
• 29:56
  We do it twice a week.
• 29:58
  And usually I learn something.
• 30:00
  There's some wisdom there.
• 30:03
  You know, Lindsay, everybody's going to the Coldplay concert.
• 30:06
  They don't even know who Coldplay is.
• 30:08
  It is.
• 30:09
  They don't even know who Asus is.
• 30:10
  So I say, why do you want to go to the concerts?
• 30:12
  You don't even know who these people are.
• 30:16
  Yeah, it's very true.
• 30:20
  I stopped going to my...
• 30:21
  I listened to him on Spotify.
• 30:23
  Anyway, I stopped going to my hairdresser because the drivel that she comes out
• 30:27
  with.
• 30:27
  Just to shut her up, I said, I'd say something like, did you hear about Charlie
• 30:32
  Cook?
• 30:34
  And she'll say, who's that?
• 30:36
  Is he with Coldplay or is he...
• 30:38
  Is he the drummer in Watson?
• 30:40
  No, it's the youth of today.
• 30:44
  I fear for the future.
• 30:45
  David, closing indices, please.
• 30:48
  If you've got them.
• 30:48
  Yeah, yeah, come on now.
• 30:49
  By talking so much, my computer is logged out.
• 30:53
  Even your computer turned off.
• 30:55
  Okay.
• 30:58
  Well, look, I can help a little bit on this one.
• 31:01
  I can help, yeah.
• 31:01
  How can you?
• 31:02
  Is it on again now?
• 31:04
  Because it was a good day on the JSC, despite the fact that the commodities were
• 31:09
  down.
• 31:09
  Go on.
• 31:10
  You mentioned resources were down.
• 31:12
  There was a little bit of easing off there.
• 31:15
  Nothing serious.
• 31:16
  The resource index down 0.7%. The overall index up a third of a percent, 103.927.
• 31:23
  I don't know whether this is new records.
• 31:24
  I think we're making it every day.
• 31:26
  Financial strong, I think, picked up with first round lifting the index.
• 31:31
  It has a big weight in the banking index.
• 31:33
  And, you know, financials, I mean, industrial is pretty strong as well.
• 31:38
  That's despite the RAND improving, you know, which takes some of the edge off.
• 31:42
  The other one we must watch is I see property going up every day.
• 31:46
  Yeah.
• 31:47
  Every day that property market is improving as those rates come down.
• 31:51
  You mentioned the long rate coming down.
• 31:53
  You know, as that come down, it makes some of the property companies a lot more
• 31:57
  attractive,
• 31:59
  even though they're still battling along at the moment.
• 32:00
  Growth point numbers came out yesterday, of course.
• 32:02
  shit Okay, so, and the overall indices were what, please, David, on the close?
• 32:08
  So, the all-share index was at 103.927.
• 32:12
  That was up a third of a percent.
• 32:13
  The top 40, 96529,
• 32:16
  also up 0.3%.
• 32:20
  Very good.
• 32:21
  Okay, value traffic.
• 32:22
  Volumes were down.
• 32:22
  Yeah, volumes have been very high.
• 32:25
  That Valterra deal, you know, the Anglo-American getting out of their full.
• 32:32
  You know, they're holding.
• 32:35
  Those shares have been circulating and trading up and down all over the place and
• 32:41
  have picked up, you know,
• 32:43
  made volumes up pretty high.
• 32:45
  Again, even if you look now at Goldfields, First Rand, Angler Gold, Naspers, Feltera,
• 32:49
  all the main traders,
• 32:51
  it wasn't as big as it has been.
• 32:53
  But the volumes have been pretty brisk.
• 32:55
  Very good.
• 32:57
  Okay, it'll be quiet until next week.
• 32:59
  Oh, next week, you know what, I've got to, I'm not here next week.
• 33:00
  So we'll take a break.
• 33:02
  And we'll be, it'll be the week after that we resume and the world will be a
• 33:09
  different place.
• 33:11
  Then I can promise you that.
• 33:13
  David, thank you very much for your time.
• 33:15
  David Shapiro is from Sasson Securities, Viv from RAM Swiss.
• 33:16
  And that was the five o'clock shadow.
• 33:18
  The views and opinions expressed in these podcasts are those of Lindsay Williams and
• 33:23
  various contributors.
• 33:25
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• 33:29
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• 33:31
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• 33:34
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• 33:41
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• 33:43
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• 33:47
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• 33:49
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• 33:49
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