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The 5 o' Clock Shadow with Schalk Louw · Strictly Business

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You're listening to Strictly Business Podcast with Lindsay Williams.
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JSC has closed its doors for another day, so it's time for the 5 o'clock shadow.
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And as always on a Wednesday, I speak to Skulk Lowe, Portfolio Manager at
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PSG Wealth Old Oak Division in Cape Town.
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We didn't speak last week, Skulk,
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and you mentioned to me off-air that you'd been out of contact because there had been
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some
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glitch, some technical glitch in the place that you were.
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and you were a couple of days offline.
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And sometimes during these times that we're experiencing at the moment, that's a
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very good thing, I would imagine.
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It allows you to collect your thoughts.
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Yeah, it was the strangest feeling.
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I mean, people usually tell you, oh, it's going to be blissful.
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There's no signal.
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There's nothing there.
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And the first few hours, I must admit,
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especially in the times we're living in wars and...
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tacos and all those things um we i i found it strange i didn't know what to
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make of it and then i just switched off and um yeah it's been been in the middle
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middle of the
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crew saw
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stars as big as the moons and the moon as big as the sun it was just it was just
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fantastic the
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quietness and i would really encourage all the listeners to just maybe i've heard
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that there's there's different
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means of fasting.
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You know, you've got a water fast.
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You've got, I saw one the other day, a sardine fast where you just eat sardines.
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But the one that I've heard as well is internet fasting,
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to take yourself off internet and social media.
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And I would highly encourage it.
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I was forced into it, but loved every second of it.
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I don't see as much of a faster, actually.
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You can talk about sardine fast and grape fast as much as you like.
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A fast is when you don't eat anything.
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That's why it's called breakfast, break fast.
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Exactly.
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I see more as a whiskey and red wine fast myself.
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But that's another matter, Skunk.
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Can we talk about markets since you've been back?
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First day of world peace.
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Let's talk about that.
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It's a big day, and it's the first day of world peace.
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Thanks, Donald Trump, for doing that for us.
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And I noticed that markets are reacting very nicely to what he said.
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But of course, we know it's a lot of rubbish and it was people that were short
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of the market
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buying back the stock indices and the stocks themselves and every other
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instrument that they sold.
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So that's sort of exaggerated the move.
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We know that every single market that's done more than it usually does has been
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affected by that.
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But we also know that it's not going to last because of the erratic nature of the
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gentleman that I just mentioned earlier on.
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I mean, we saw crude oil down 18 percent at one stage, the biggest move.
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for I think about two decades and now it's only down 13%
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only and we're grateful for it but still it has recovered.
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Skull, can I see it doing so again?
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This is the pattern.
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It's a well-worn pattern five weeks in.
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Yeah, what a day.
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I mean, yeah, a few people asked me today, you know,
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what do you do now?
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I mean, what do you actually do?
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Do you follow this?
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Is this not time to be buying?
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Do you use this dead cat bounce and actually go and sell?
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What do you do?
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It's a fair question.
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Yeah, exactly.
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And yeah, when in doubt, just do nothing.
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Just do nothing.
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Really, you can't see this type of movement.
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I mean, it's totally erratic.
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I told my team this morning, it really feels like watching a very bad, I mean,
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seriously bad, B-rated war movie.
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It's, I mean, I can't believe that this is real life.
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We've been desensitized, haven't we?
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We expect it now.
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And when it happens, you say to yourself, did the President of the United States say
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that the F word?
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in a tweet at two o'clock in the morning.
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Did he say he's going to obliterate a nation?
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What was the word?
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A civilization.
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Yeah, a civilization.
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Did he really say that?
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And you think, oh, yes, he did.
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And you get on with something else, feeding the cat or something.
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It's astonishing the way that we just let it wash over us and that no one does
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anything about it.
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Yeah, we, through the F-bomb, you know, we're lunatics.
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I read that.
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I got back.
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back into civilization.
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And I read that.
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My first reaction was, it's one of these parody accounts.
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That must be one of these parody accounts.
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No way can the...
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President of the largest economy in the world of this type of tone.
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I mean, you always, when I say certain words or names,
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you've got a certain idea of that word.
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If I say James Bond, what immediately springs to mind?
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Me, first of all, but you know what I mean.
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I know.
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A suave secret agent working for MI5. Or is it MI6?
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Anyway, I know what you mean.
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There will be a suit.
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There will be welcomed here.
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This will be suave.
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This will be shaken and definitely not stirred.
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When you say the President of the United States, POTUS, I mean,
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I know we're laughing now, but this is never, I mean, anyway.
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Let's not go down this rabbit hole.
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We're sitting in an environment where now there's a 10-point plan coming from Iran,
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there's a 15-point plan.
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And my thought when I saw this,
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let's call it a tweet this morning, is Iran has won.
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They won.
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Because let's say now they sit around the table and let's say, well, we need to chat
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about these 10 points.
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So what's the ten points?
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I'm not going to go through all of them.
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But first point, no more war.
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No more shooting, no air.
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That's reasonable.
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To end a war, you need to stop war.
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Are these the points that the U.S.
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and Israel are imposing upon Iran, or is it the other way around?
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No, no, I'm talking about Iran.
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Iran's saying that they will settle.
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This is the ten things that they want.
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Okay, go on.
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And, you know, other point.
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We will need two million dollars for each ship that goes through the Strait of
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Hormuz.
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I mean, wow, that's going to be some year-end function party.
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Man, with all those two million dollars.
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There's about 150 to 160 ships that used to go through the Strait of Hormuz when
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world trade was, you know,
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doing pretty well, whether it be fertilizer or oil.
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So let's say it's a hundred.
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That's two.
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That's 200 million a day.
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That's not bad.
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That's not bad just for sitting there and waving a ship through.
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Correct.
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Correct.
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So that'll definitely be a great injection for the Iranian GDP. Then next point,
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no more U.S.
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sanctions.
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Now, I mean, that's most probably been
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Iran's biggest ball and chain for the past, how many years?
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47 years.
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Yeah, I know.
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Because, I mean, they are an oil-producing country.
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More than 50% of their GDP is made up just out of oil.
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And they had these sanctions.
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If they didn't have these sanctions, they would have done a hell of a lot better.
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No more sanctions.
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So I'm looking at this and say, yes, they've got blown up.
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There's a lot of work to be done when this war is done.
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But if...
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that's going to be the outcome.
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That's going to be, okay, we can work with these 10 points.
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Now you need to look at our 15 points and let's meet each other in the middle.
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And of course they won't meet each other in the middle because Trump is on the one
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hand and he doesn't like to concede one point,
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let alone seven out of the 15 he's going to impose upon them.
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And so it's not going to happen.
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And that is why you should be buying oil at the moment and going against everything
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you've seen in the last two or three hours as we record this
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end of the market stay.
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podcast.
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That's my opinion, not the opinion of PSG Wealth and Scout Clow.
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Now, Scout, we've gone on enough about Trump because you could do it till the
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cows come home.
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People do it a lot better than us.
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Yeah, go on to your final point.
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Because I had a chat with I don't know if you had David on the show yesterday.
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I haven't had him since he's been back from the States, but anyway.
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That's what I'm asking because he's still got very...
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Very, very heavy jet lag, but he's back.
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And I had a chat with him today, and I said, well, just tell me, general
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thoughts, what's the I mean, you just came back from the States.
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Yes, you stayed more on a let's call it the eastern side,
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more blue states.
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It's Boston and New York, and that's not America, as we know.
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Correct, correct.
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But what's the general I mean, you've been there.
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What's the general trend?
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What's the general feeling?
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He says, Skog, it is unbelievable how the people,
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the US citizens are turning against Trump.
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You can feel it.
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You can actually see it in the people's reactions and what's
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happening there.
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So I hear what you say that they won't meet each other in the middle.
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I wonder if we're not going to have a
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25th amendment impeachment coming along before then.
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Congress hasn't even gathered, so that's not going to happen.
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And the extraordinary thing is that because of the magic of television and
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so-called charisma and the litany of lies,
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77 million people voted for this freak.
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And it's really strange.
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I watch Jimmy Kimmel every morning and I think I'm in a bad mood when I wake up
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about Trump anyway, but then you get the Jimmy Kimmel
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15 minutes condensed of his show the previous night that he's just recorded and
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you think, goodness me,
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this bloke is clever the way he phrases things, the way he puts things,
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the way he puts a bit of a humorous spin on it, very humorous spin on it,
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but what he's saying is terribly, terribly important.
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And what I love about Trump...
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is that even when he's dead, which will be soon, it'll still go on.
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People will say, well, this happened and that happened.
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There'll be analyses galore on every single television station.
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Skunk, let me tell you about gold quickly, because it's one of your favourite
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subjects.
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And that is that all the safe haven buying has been done.
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It's all discounted.
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It was done over the last two years.
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It was done by the central banks for very, very different reasons, as a store of
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reserve,
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as a complement to the US dollar.
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But the safe haven buying as well has stopped now.
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And it's a dollar proxy.
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It's as simple as that.
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The dollar goes down, which it has in the last few hours because of what Trump has
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said.
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And the gold price went up and now it's coming down a bit as the dollar
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strengthens a bit.
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It's going tick for tick with the Dixie, the dollar index.
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Yep.
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And what Lindsay is saying for the listeners is when you look at the Dixie,
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the US dollar index.
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that is down 1% today.
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And when we look at the gold price, that is up 1% today.
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So, yeah, you're 100% right.
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And that's good to a certain extent because there was a definite decoupling.
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I mean, we've had the run-up to the actual war, but we also had prior to the run-up
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to the war,
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we had the Greenland saga, we had Venezuela saga, we had a few other sagas.
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And I think those sort of catapulted gold way before the actual events.
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the actual war.
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But you're right.
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I think you get a feeling now that when the war actually broke out,
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I think the biggest surprise to me was not that gold retraced because it was sort of
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a
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buy-in rumor, sell-off fact, but how the people actually just ran to the dollar
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again,
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how the dollar just became the safe haven.
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But, yeah, I think you're 100% right.
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But maybe…
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There's a hidden message for us in Trump's true social
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tweet that he sent out this morning.
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Did you read that final part?
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He said, this could be the golden age of the Middle East.
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He throws gold around a lot.
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Anyway, but I think, like you said, let's move along.
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I do think that you're right.
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I think there's definitely a more natural.
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movement in gold these these let's call it past week week or so and and
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i think that's a good thing it's it's the gold price is still trading uh four
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thousand seven hundred fifty odd dollars i mean
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that's that's really good i mean a lot of people mentioned
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that well there we go gold is going back all the way to three thousand three
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thousand five hundred dollars yeah we're sitting it's still still
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trading four thousand because the the globe the The
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investors out there still realize that the major issues is, one, inflation.
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Going forward, inflation is going to be a major issue.
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Are we going to see the world going into a recession, which I think could still very
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much happen?
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And all those things play to the advantage of gold, keeping some value.
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So, yeah, I'm really happy with the gold's movement.
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And, yeah, look at the gold shares today.
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Wow.
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Yeah.
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I was going to say that actually before we finish the gold subject.
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Can you tell me how they've behaved while gold has been so volatile?
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And also, don't forget, mired below $5,000 an ounce, which before we saw as support.
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Yeah, yeah.
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Yeah, I mean, the gold shares did phenomenal.
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I mean, yeah, retrace a little bit, a lot apart of today, but
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Anglo Gold still in the day 4.8% higher.
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When we look at gold fields, that was close to 5%, 4.7% for today.
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Harmony, they brought out a, I think the results today actually came out,
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or yesterday, sorry, results came out yesterday or so, that was up 4%.
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In general, that was a nice little kicker coming from the gold shares.
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And also, the other precious metal, PGMs did phenomenal today as well.
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We'll come to that in a moment because I'm going to get on to the markets.
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We have to do so.
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Dollar round is 16.38.
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Where else are we looking here?
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British pound against the round is 22.01.
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The euro round is 19.15.
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Euro dollar is about 1.17 at the moment, was higher, the euro that is.
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But we've got the gold price, the aforementioned.
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4,754 on my slightly delayed screen, which is up 1.1%. We've got Platinum,
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the first and the biggest of the PGMs.
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2,057, up 5.6%.
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But Palladium, it's a thinner market and it gets pushed around more and there's
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less supply and everything.
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But nonetheless, what a performance.
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Up 9.5% to $15.95 an ounce.
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Now, we're talking some real big moves here on the CRB index page.
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I've got Brent crude oil now $94.88, only down 13.2% scalp and $94.90 now,
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13.1%.
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West Texas crude $95.62, down 15 and a third percent.
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Natural gas down four and a third.
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Gasoline down nearly 10% today.
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It's gone down through $3 a gallon in the United States.
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So that'll please a lot of people.
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Other ones, oh yes, copper, of course, $5.75 in New York, which is three and two
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thirds percent higher.
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I was looking at all sorts of other things.
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I looked at live cattle, of all things, and I thought, what other commodities are
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either doing well or doing badly?
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Live cattle have gone to record highs this year, and I think it's because of
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feedstuffs coming through the straight of all moves.
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I think so, Skulk.
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You're cleverer than me.
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You'll be able to confirm or deny that.
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But a lot of commodities have done well, and that leads me to the CRB index.
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How many weeks ago was it?
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We were saying, well, it's just broken 400, and you looked it up, and the high
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was 425 on this particular index.
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That wasn't that long ago, was it?
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Yeah,
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and I still highlighted the fact that we've still got
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some running to do to get to the previous highs.
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And man, that didn't take long.
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Nah, sliced through that like a hot knife through butter, and it's now 483 almost.
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Record highs.
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Tomorrow it'll be much lower because they only calculate the index in the morning.
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So it'll be much lower because of the oil price substantially.
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So it'll be 10% down at least.
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But nonetheless, let's enjoy it while we're looking at a screen that says
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482.71.
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South African 10-year bond yield 8.52%.
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It's recovered sharply.
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I remember looking at it just three or four days ago at 9.20%.
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So yields falling in South Africa.
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Bonds going in the other direction.
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US 10-year, that's another one.
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Was in the 440s a couple of weeks ago, now 4.27%.
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S&P 500 futures, the dead cap bounce is just coming off a little bit.
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But nonetheless, 2.1% higher at 6,796.
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That's for the June futures.
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One more thing I've got to give you, and that is the Bitcoin price, which is
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benefiting from the weaker dollar.
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71,150, which is up 4.4% on the day.
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Anything else you want to talk about, Scott, before we go to the ups and downs
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on the JSC?
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Any themes since we spoke?
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No, I think your call was 100% right.
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I mean, it was a broader market movement where if you,
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let's call it produce or salt, anything other than oil or energy-related,
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Then you had a fantastic day.
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If you did the former, then you had a very, very difficult day.
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So yeah, there was no real news out.
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Yeah, very, very good day.
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Nice recovery in the market for today.
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Impala Platinum is top of the list on the JSC on the close.
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13% higher, just over 13% higher.
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Right behind the big one, the ex-Anglo-American Platinum division,
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Valterra, up 9.2%.
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Pepcor, why is Pepcor up 9%?
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Come to that in a moment.
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I don't know what ATT is.
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What is ATT?
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What is the symbol ATT for a stock, Skalk?
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I should know this.
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Let's quickly have a look.
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It's a tech, if I'm not mistaken.
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Yeah, it's a tech.
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I'm guessing now, but it's a property counter, a tech.
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Okay, 8.6% up for the ridiculously named property counter.
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Yeah, it is a tech.
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And GrowthPoint as well, which is another not so ridiculously named property
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counter, up 8.1%.
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So something happening there probably to do with the bond market.
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On the downside, horrible for Tungela.
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That's got to be the most volatile stock of the year so far.
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down 12.5%, Sassl down 12.3%, down below 200 now,
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199, Sun International down 3%, Carew down 3%,
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and British American Tobacco a 2.8% loses.
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Outside of those big ones, Skalk, any small or medium caps?
20:07
No.
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No, and just quickly, the Sun International, the only one there is XDEF
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Stories, but the rest is all retracements.
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No, I think it's been a great day.
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And just by the way, you mentioned the CRB commodity index.
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I looked the other day.
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I think it's about 35%.
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35% of the CRB commodity index is energy-related commodities.
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But I think some of these other harder commodities, the golds, the silvers,
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those will definitely help ease in.
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But you're right.
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I think we will have a bit of a retracement in the CRB commodity.
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Probably around 4%, 5% tomorrow, yeah.
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Anyway.
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It's not over yet.
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Skulk, thanks so much for your time as always.
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Skulk Lowe is a portfolio manager at PSG Wealth Old Oak in Cape Town, and that was
20:55
the 5 o'clock shadow.
20:57
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