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Shapiroworld by Strictly Business · Strictly Business

• 0:00
  You're listening to Strictly Business Podcast with Lindsay Williams.
• 0:05
  It's Monday, so it's time for Shapiro World with David Shapiro from Sassfin
• 0:10
  Securities in Johannesburg.
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  Are you in Johannesburg now, David?
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  You're back, aren't you?
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  Okay, good, because it's very interesting.
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  I had a conversation with a very intelligent and earnest woman about water
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  this morning,
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  the water situation in South Africa, and she went through it point by point.
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  And I gave an example of you, not you, I didn't use your name.
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  but how it has now spread to urban areas.
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  And she said, yeah, in my village where I lived, we didn't have water.
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  I grew up without water.
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  And now it's spreading to the urban areas because of the decay of the
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  infrastructure.
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  And it's quite serious, apparently.
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  Oh, yeah.
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  Oh, no, this is, Lindsay, 30 years of neglect or plus 30 years of neglect.
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  Eventually, the infrastructure just crumbles.
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  And I think it's one of the characteristics of ANC's administration,
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  particularly in effect, I can't say particularly, it's around the country, all
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  the municipalities,
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  the big cities.
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  I think Cape Town have done something about it.
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  But in Johannesburg, the first day that I was back last Tuesday, I came back on
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  Monday.
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  Tuesday, we had a blackout from, it was out for about three, four hours.
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  sitting at a power station down, and it's constant.
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  You know, the grid constantly fails.
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  The trouble is when it fails, you don't know when it's going to come back on
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  because you don't know the extent.
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  And these are large areas that are blacked out.
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  So it's something we get used to.
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  In my building where I live, we've got four big JoJo tanks,
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  which ensures that we will not have any water disruptions for… I think three to
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  four days.
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  So we can go on three to four days before these have to be filled up again.
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  So every building now is kind of proportionate.
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  It's a sad situation when the city of gold has to put on tanks on a very
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  well-maintained
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  and let's face it,
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  a building that's in an affluent area or a relatively affluent area compared to other
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  parts of the country.
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  So anyway.
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  I just thought I'd bring that up because you've mentioned water before.
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  Let's move on to the decay of another sort.
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  And that is the decay of America, David.
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  You were in America for three, four weeks, whatever it was.
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  It's decaying under this man.
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  Everything is moral decay, economic decay.
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  Everything's going and people don't see it yet.
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  Or the people that need to see it don't see it or choose not to.
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  You know what?
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  It's more moral decay.
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  It's more than...
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  Then the business decay.
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  And that's something that struck me, you know, for having spent six weeks in there.
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  In fact, I wrote an article, which was in Currency.
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  That's Julieta's magazine.
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  Yes.
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  And I made some notes about it.
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  And it's a very peculiar situation because people there don't care.
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  They didn't care.
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  They were more concerned about getting rid of Trump than actually winning the war.
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  I can't explain that.
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  They detest him so much.
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  Listen, I was in the North.
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  We had an argument about this.
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  We nearly got into an argument.
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  It's difficult to get into an argument with you because you're such a nice chap.
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  And no matter how much I try, you never rise to the bait.
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  But anyway, it's another story.
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  But the point is that, yes, you said to me,
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  and actually you used the New York Times as a replacement name for me.
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  You said, when will the New York Times actually say that they want Iran to win
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  the war?
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  because they detest Trump so much.
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  And it's an interesting question.
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  Yeah, that's exactly the situation.
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  So the media there is vehemently anti-Trump.
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  And I think they're using the opportunity.
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  He's battling.
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  Okay, make no error.
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  His popularity is declining.
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  You know, what used to be cute and funny and amusing is no longer amusing.
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  You know, even his attack on the Pope.
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  You know, honestly, I know, you know, I mean, just be quiet.
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  Don't say anything.
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  He doesn't have to say anything.
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  This is the Pope.
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  You can, you know, this is what you've got to expect from the Pope.
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  But I mean, to have a go at the leader of the Catholic, I don't know how many
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  Catholics are, but they go into the billions.
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  It's about 1.4 billion, I think, something, depending on who you believe.
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  That's a lot of people to offend, isn't it?
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  It is.
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  And I'm saying, I think he's...
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  I think his whole administration is under enormous attack.
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  I cannot see them winning the midterms.
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  It's certainly at the on-house level.
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  Maybe there might be something different on the Senate level, etc.
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  But it's...
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  America, he has taken it down to the very lowest common denominator.
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  And that's sad.
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  You know, the way that he carries on, there's no moral compass from that point
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  of view yet.
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  Yet, and this is where I come to, the people that I spent time with and I went
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  to, I was up in Boston,
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  there were certain celebrations.
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  The business side of it just keeps grinding on, you know.
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  uh it it doesn't stop and i mean you can see it i i spent this weekend um looking
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  at
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  anthropic and looking at chat gpt and the number of people that use it and the
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  number of people that you know
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  how this is growing and this is driving the markets and kind of supporting the
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  market before you go on
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  before you go on because i have to put this into your because it might affect
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  what you say next is when you look at the companies
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  that you've just mentioned And I put this to Viv and you before on our other show.
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  I said, are they recession-proof?
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  Are they Trump-proof?
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  Are they war-proof?
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  Are the products that they produce and that you say are being used by so many
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  people, and when I say produce a product,
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  it's not like manufacturing a widget or something, but you know what I mean.
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  Because of the number of people that use it and because it's so cheap, sometimes
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  free,
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  it means that it doesn't really matter what the economy is doing.
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  and whether they're getting their food stamps or their food baskets or whatever
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  it is, they still use these things, David.
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  So they've invented something that is absolutely incredible and also is on its
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  own.
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  It's almost like a standalone economy.
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  Totally.
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  Barfication, I saw the word.
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  You know, it is a standalone economy.
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  You've got this, you know, this incredible drive that's coming.
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  I spent my weekend, what I did is that, you know, you've seen the software
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  companies coming under a lot of pressure.
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  And the decision has to be made, do we stay with the software companies?
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  You know, like ServiceNow, like Salesforce.
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  Can you give up Microsoft in your portfolio?
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  If someone's sitting there and they've been there right from the beginning,
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  they've been there for 20 years, say, and then suddenly someone says,
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  this is being eaten into, this could be another BlackBerry or something like that.
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  And you can't believe it because it's Microsoft.
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  And can you believe it?
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  Or would you say they've turned themselves around?
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  I would stay with Microsoft.
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  In fact, I would switch ServiceNow and all these others into Microsoft.
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  I think because Microsoft has got the ability for you to use it even as a, you
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  know,
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  you could use it in Microsoft because of their various
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  licenses.
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  That's the other.
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  more at the enterprise or the higher enterprise level that they're going to
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  battle.
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  And there was a very good article in the FT this weekend by Christian Klain from
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  SAP, who says,
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  we saw the same thing with cloud.
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  It takes years.
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  You know, initially, it took them a long time to get customers to go into cloud.
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  What he is saying, it's going to take them time to get clients to come to them.
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  In other words, it's going to be a delay.
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  And that was good enough for me to say, okay, I can wait.
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  Not wait, I'm going to switch.
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  I'm out of these companies.
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  I'm going to switch, go into Microsoft, go into the hyperscalers and everything.
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  In other words,
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  retain my exposure to AI just in case there is a bounce in those enterprise,
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  what do they call it, SAAS software as a service.
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  But what in three?
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  Just, yeah.
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  Because again, this is going to be something you can think about in the back
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  of your mind while you just finish your explanation.
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  But I have to ask you now, think about this.
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  Is your digging, is your research, is your reading making you come to the conclusion
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  that you need to make a
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  portfolio shift?
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  Because you've been very stoic with the companies that you have in your portfolio,
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  have had in your portfolio,
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  not just over the last three or four months, but over years.
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  And I know that you do.
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  make adjustments now and again?
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  Of course you do.
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  And add new exciting companies to your portfolios.
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  But are you saying to yourself, now is the time to do something a little bit more
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  meaningful?
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  In this particular area, this is structural.
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  And why it's structural is that how incredibly powerful Anthropic
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  and ChatGPT are.
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  Yes.
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  And how incredibly powerful it is for engineers.
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  for people to be able to design their own, I mean, write their own code and so on.
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  And I translated that into the software companies.
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  In other words, companies going to now say, we need to introduce AI.
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  They're going to wait.
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  They're going to wait and delay any major decisions.
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  Down the line, they will have to go because, as Christian Klein said, you
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  know,
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  he says a lot of businesses, they've got silo, they've got very old legacy systems,
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  and you can't necessarily, you know, you're going to need experts to come and
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  help them integrate from these old legacy
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  silo systems into AI.
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  But that's going to take years, Lindsay.
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  It's not going to be tomorrow.
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  And for that reason, I said, okay, time to switch.
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  You know what I mean?
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  Time to switch.
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  Stop.
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  We've come down.
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  My ego's been in the way.
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  Switch.
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  But so it's seldom that we do something like that.
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  But what excited me was, what excited me, Lindsay, is that, and I hope we talk to
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  Viv on Thursday.
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  Yeah.
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  What excited me was just how many thousands, they call it tokens.
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  Now, you know, millions of tokens on a day-to-day basis that these two languages,
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  and yeah,
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  there are other smaller ones, Grok and DeepSeek and all of those far, far lower
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  than, than, you know,
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  than Anthropic and ChatGPT. ChatGPT is still the biggest, but Anthropic's
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  catching up,
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  you know, making big ground.
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  So the Claude and your co-pilots and all of those are very important to know of.
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  So I was, I thought, this is, this is real.
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  Lindsay, this is, you know what I mean?
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  This is a really common...
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  You sound excited about the fact that you've made the decision because, you
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  know, at your age,
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  it's difficult to make big decisions like that and feel comfortable about it.
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  But more seriously, you sound excited about the shift, about the structural
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  change.
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  Yeah, yeah, yeah, I am.
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  You know what I mean?
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  Because there's the positive.
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  The positive is that AI is...
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  being used far greater than we thought it would, the negative is that they're going
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  to be losers.
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  You know, that's the negative side of it.
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  Not everybody's going to be a winner.
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  Okay.
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  I need to ask you this question now, and it's been bugging me for, not just over
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  the weekend, it's been bugging me for weeks.
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  I look at a weekend trading system.
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  The company that Viv is involved in, IG, IG Index, and I looked at their weekend
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  trading.
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  And as soon as Trump said we're going to blockade the...
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  No, as soon as the talks were over, the oil price started edging up.
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  This was on Saturday, Saturday lunchtime, I think it was.
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  And then when Trump said, oh, we're going to blockade the state of...
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  I thought, wait a second, this can't be right.
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  He's probably said, someone's probably misreported it.
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  He probably said, we're going to unblock it.
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  No, no, we're going to block it.
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  So I thought, OK, this is a bit weird.
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  Let's have a look at the oil price.
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  Immediately, it's up 6%, 7%.
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  So it's jumping.
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  And I looked at the Dow Jones and it was down one and a third percent.
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  Looking at the Dow Jones now, what is it, down about a third or a half a percent,
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  something like that.
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  My question to you is,
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  what is it going to take for the market to get really clobbered?
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  Because it takes everything in its stride.
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  I can't believe it because I know you sent me two charts and I bit my tongue.
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  tongue and I said, oh, no, you know, and I waited.
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  I waited this morning and I looked at the futures and there was hardly any response.
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  In fact, even if we look now, you know, the markets are open.
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  The Nasdaq is flat.
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  In fact, it's just gone into positive territory.
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  The S&P is down less than 0.1 of a percent and markets are on the go.
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  I think...
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  In fact, Lindsay, when I listened intently to a lot of oil traders,
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  particularly from Singapore, that side of the world, and they were all saying, you
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  know, oil can go to 150.
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  And they were making all these threatening moves.
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  And I said, oh, you know, how are we going to handle it?
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  What am I going to do?
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  And now it's 100.
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  You know, yeah, OK, it's up 5% from where it was on Friday, whatever it is.
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  But the markets are just discounting it.
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  And I think attention is now shifting towards the US and the earning season.
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  And they're bored with Trump.
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  They're tired of his histrionics and whatever it is.
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  They don't care about the war anymore.
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  Yes, the oil price is going up.
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  It's going to put up inflation.
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  But as you say, there's these two speed economies, two different speeds or
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  whatever it is.
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  The one lane, it's the slow lane.
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  That's the poor people.
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  We're going to have to pay more for oil.
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  In the other lane, it's the corporate side that are making money out of AI and all
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  these other things.
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  And, you know, I can't explain it.
• 15:02
  So it's Wall Street versus Main Street again, David.
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  It is that.
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  Lindsay, it's that.
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  That's the powerful side.
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  You see it.
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  You know, you see it in New York.
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  I can't explain.
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  I went into the Rolex office and I wrote about this.
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  I had a friend who needed two links taken out.
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  I've got to explain this because people think I wear a Rolex and you know that I
• 15:27
  don't even wear a swatch.
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  I go into a Rolex, you know, for me, Rolex,
• 15:33
  it's the last shop on earth that I would ever go into.
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  But we went there.
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  I know you're only doing this because the taxman listens to this, David.
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  But anyway, carry on.
• 15:42
  No, no, no, you know, I've got nothing.
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  I don't wear any.
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  But anyway, I thought that a Rolex shop, you know, when you go in Bond Street,
• 15:51
  there's, it's all barred up and you've got...
• 15:53
  the commission air outside.
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  Yeah, the places where you have to pluck up the courage.
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  You have to go out and have a few drinks and pluck up the courage.
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  Walk past the shop three times, shake it out, and then go in trembling and ask the
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  geezer if he'll open the door for you.
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  I know the shops.
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  This was open.
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  We went inside, and it was packed with young people, youngish people.
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  all have either made appointments or were waiting for a salesperson to come.
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  The first thing they asked, there was a coffee bar there,
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  a coffee counter with at least two people serving or even three.
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  I said, this is Rolex.
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  This is the kind of shop where you have to qualify if you want to buy certain of
• 16:41
  their products.
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  You can't just go in there and say, I want that.
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  And I said, this is the US.
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  This is it.
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  This is what they stand for.
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  They don't apologize about making money.
• 16:53
  They don't apologize about showing off their wealth.
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  I said to a fund manager living in Manhattan, doing very well indeed for
• 17:03
  himself,
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  I asked him about what New York thinks about the new mayor and about Trump and
• 17:09
  the economy and everything.
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  He said, Lindsay, no one gives a bleep unless they're making money.
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  They don't care.
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  They don't care in New York.
• 17:19
  David, I've only got a couple of minutes left so can we talk about football please
• 17:24
  because I was watching
• 17:26
  Norwich Ipswich on Saturday lunchtime and it coincided with the Arsenal Bournemouth
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  game and I didn't know the
• 17:33
  Arsenal Bournemouth score I was going to save myself, I was going to watch the
• 17:38
  highlights and then I read of course Piers Morgan was
• 17:40
  pissed off he wrote
• 17:42
  a tweet and I read that so I knew it was bad and I thought of you and thank
• 17:47
  goodness we weren't messaging each other you
• 17:49
  Because that was terrible.
• 17:50
  That was a terrible performance.
• 17:52
  You know what?
• 17:54
  My only hope is that we can actually end the season with a little bit of dignity.
• 18:00
  And because the way they're playing now is just too pathetic.
• 18:04
  They're not creating any chances.
• 18:07
  They're not trying.
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  They're faffing around.
• 18:10
  I think that Arteta's toast.
• 18:13
  I don't think he's going to make the season.
• 18:15
  It's not over yet.
• 18:17
  Well, they're going to have to lift themselves on Wednesday and they're going
• 18:22
  to have to
• 18:22
  lift themselves against a man's city that is just looking incredible.
• 18:27
  They look nasty in the second half.
• 18:30
  They had a nastiness about them because every 50-50 ball they won.
• 18:38
  There was one moment when Haaland ran three quarters of the pitch to make a
• 18:44
  challenge just outside his own
• 18:46
  penalty area.
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  and I thought okay, you haven't been particularly good in front of goal today,
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  but you still have the guts and you still have,
• 18:53
  you use that word dignity to play for the team, represent the team and do that.
• 18:58
  Chelsea were also woeful, but yeah, that's another story.
• 19:02
  Well, Pep must have given them a talk at halftime because first half, Man City were
• 19:08
  okay.
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  They were okay.
• 19:09
  But second half, I don't know what he said to them, But, He probably gave a
• 19:15
  hairdryer,
• 19:15
  an Alex Ferguson hairdryer, talked to these chaps and said, you want to win the
• 19:19
  league?
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  You know, you want to contest?
• 19:21
  You better do something.
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  Okay.
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  But anyway.
• 19:25
  Oh, well, David.
• 19:25
  I'm glad that Ipswich will be coming up again.
• 19:28
  We'll see.
• 19:29
  Portsmouth tomorrow night.
• 19:30
  Lots of other things.
• 19:32
  David, thank you very much for your time, as always.
• 19:34
  David Shapiro is an assessment of securities in Johannesburg, and that was
• 19:38
  Shapiro World.
• 19:40
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• 19:43
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• 19:49
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