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Shapiroworld by Strictly Business · Strictly Business Podcast

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You're listening to Strictly Business Podcast with Lindsay Williams.
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Welcome to Shapiro World with David Shapiro from SAS for Insecurities.
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And at the moment, as I say in the corporate world, he's off-site.
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He's off-site on the east coast of the United States of America, currently in
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Manhattan.
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David, what's the mood?
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What's the mood about Trump?
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Because Trump went mad 36 hours ago,
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tweeting or rather truth-socialing nearly 50 times in seven hours with the most
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bizarre...
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mixture of attacks on former foes and pictures of himself as a war
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hero and things.
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It was very entertaining, but terribly disturbing.
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What's happening over there?
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Nothing.
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When I say absolutely nothing, the news is actually Trump-free at the moment.
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And, you know, trying to keep up with what's happening, because I'm relating
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this to the markets,
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there's very little in the headlines.
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It's mainly the local news which focuses on fires in Queens or Brooklyn,
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rescuing some old lady who might have fallen on the pavement.
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You know, nonsense like that, and they make a big fuss about it.
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I think the big news is that the Knicks haven't been in the finals for 55 years.
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This is the basketball finals, and they're playing the I think it's San Antonio
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Spurs.
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I'm not sure.
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I'm very poor on basketball.
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But it's going to be, I think it's game three will be at Madison Square Garden.
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Oh, my goodness.
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Tickets are going into six numbers, you know, six figures of that.
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So I think that's a very big headline.
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Lindsay, I must also tell you that World Cup, you can't see anything.
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I went into the Adidas store to see what they were selling, what merchandise they
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were selling for, you know,
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to take back to the grandchildren and so on.
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And, again, not much of a World Cup fever.
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And once more, the tickets are incredibly expensive.
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And if you want to watch here, you've got to go to New Jersey.
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And the taxi ride is not the easiest, you know, to cross into New Jersey.
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Or when I say taxi ride, train rides and so on.
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But at the end, they somehow come out of it and it all works very smoothly.
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But I haven't picked up any massive fever.
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it's No, they've also said, and it's been reported not only in South Africa,
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in our friend Julieta's publication, Currency.
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There was an article by Tim Cohen in there a couple of days ago talking about it in a
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very tongue-in-cheek sort of way.
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But the point he was trying to get across was the fact that the hotel bookings are
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not 100%.
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And although the games will be relatively well populated, I think, I don't think
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you're going to get any half-empty stadiums.
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But, um...
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The hotel people are saying it's a little bit disappointing.
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Maybe there'll be a last-minute rush as the ticket prices are forecast to come
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down over the next 10 days.
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But otherwise, no,
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I don't think it's going to be a huge success given the infrastructure that
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those three countries have,
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i.e.
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United States, Canada, and football mad Mexico.
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Yeah, it's too spread out.
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It's across a very broad country.
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Maybe.
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You know, as the rounds go and we'll start to get a little more excited.
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Look, next week on the 11th, it's Bafana, Bafana, Mexico.
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I mean, okay, I'm okay for that one.
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You know, particularly that I am in the U.S., so I don't have to wait until some
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ungodly hour to watch it.
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And, you know, I'm quite excited for it, I must say.
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You know, it's a World Cup opening.
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Yes, it's going to be in Mexico.
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But, you know, look after.
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I think we were all, I was arsenalled out, as my son said, you know, he's in
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Australia.
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Yeah, we'll come to that later, David.
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I mean, I was going to apologise, but I mean, I've had so much arsenal,
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so Arsenal lose and everyone's commiserating for Gabriel for missing the
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penalty and then the Arsenal parade that's all
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over the BBC for a day.
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And then the day after the headline is clean up and how many arrests there were
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and how many people, stupid Arsenal fans,
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had to be rescued from lampposts because they climbed up there but couldn't get
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down.
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All this sort of stuff.
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I'm sure drugs were involved at some stage.
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But I'm glad it's all over and we'll talk about it later.
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Let's talk about the markets, David.
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Over the weekend, you're an avid reader of the weekly wrap from very well-known
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publications and very
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august publications, I would say.
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What have you found?
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You know, there was nothing of interest.
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It's just a repetition or a repetitiveness of the same stories on AI.
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But, Lindsay, there are trends that are taking place and, you know,
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quite dramatic in the sense that Dell's numbers last week just highlighted that.
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This is real, and I'm looking again today, they're up almost 8%, which I think
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year-to-date, I mean,
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this is crazy.
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Year-to-date, they're up 261%.
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I mean, that's a massive amount.
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Over 12 months, 300%.
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But what it does show you that the demand for what is, I think, basic computers, you
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know,
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I don't think they're known for their servers or anything special about the
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equipment that they produce.
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but Whatever it is, it's certainly attracting a lot of attention and people
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are taking AI
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seriously in implementing it.
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And this has spread through to the software sector, which has been left
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behind.
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So, I mean, even if you look today, first of all, NVIDIA said, we're going to get
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involved.
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We're going to take on Micron and we're going to take on
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AMD. We're going to produce tips for computers.
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That's desktop computer.
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They're up 4% today.
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I mean, that's a big number for a five trillion company.
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Microsoft now also one of the laggards.
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In fact, year to date, Microsoft are still in negative territory.
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That's up two and a half percent.
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So you've seen these big, big shifts in sentiment around
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AI, which also can make you a bit punch drunk.
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You know, Palo Alto is another one up today.
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I must say the one British company that I bought was ARM, A-R-M.
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And this is some time ago when they first listed.
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Remember, they also came out of SoftBank.
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And I was fascinated by their story.
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And they're almost, you know, they don't design chips.
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They test chips.
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If you design a chip, they go and test it.
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And they've got thousands of engineers, I think, in India and so on.
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And it's one of the few British, they didn't choose to list in Britain.
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which is crazy, but I just loved their story.
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And I bought it when they first listed.
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And I mean, they're up another 15% today,
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another one of these crazy movements that we've seen in terms of they deciding to go
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into AI.
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So we are seeing huge kind of shifts within the AI sector.
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It's hard to keep in touch with it.
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It's hard to say, well, where do we go?
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What do we do?
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Is there a chance that it will go, the normal ones that we always talk about, I
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mean,
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it's become Micron and NVIDIA between you and Viv Govender for our Thursday chats,
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but is there any chance that suddenly there's, you know, someone like a horse
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race,
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someone comes from nowhere and is jostling for position at the front?
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Is that type of company there or is it a type of company that is a service company
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to the main companies,
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if you see what I mean?
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They are going to be those companies.
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And I think that's what's starting to dictate the market or dominate the market.
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And last week, we saw NVIDIA coming down.
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We saw Alphabet coming down.
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All of those companies coming down.
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And I mentioned this in our Thursday chat.
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I said, are they selling in order to make room for the RPOs that we're going to see,
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SpaceX and Anthropic and other companies when they come onto the market?
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Verve said, no, they're being switched into AMD and other.
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other alternatives.
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And I think there is a switch like that happening.
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It's ongoing.
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I don't know.
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To be honest, I'm not that familiar with other companies.
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I'm vaguely familiar.
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I don't want to say I don't know them, but I'm vaguely familiar with a lot of the
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companies, Apploving and
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Snowflake and companies like that, which are also starting to move or come from
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nowhere.
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I'm looking now on the list that I watch, Micron up year to date.
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That's where we're now, five months.
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263%.
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Arm, this is the one I'm talking about, 260%.
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Dell, 256.
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I mean, these are crazy.
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And the iShares semiconductor company, which is one,
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when a lot of my clients felt that NVIDIA was a little too rich for them.
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I said, okay, well, then go into this iShares Semiconductor ETF,
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which includes most of the big chip companies.
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That's up 87%. Now, we're not talking about a year, two years, three.
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We're talking a few months.
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So there are those businesses.
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Doesn't it make you scared, David?
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I mean, forget it.
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But let's say you just come back.
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You've been in a coma for a while and someone had taken you out of the coma and
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you say,
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the first thing I want to do is see how Arsenal did and also see how the markets
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are doing.
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So you look at the arsenal first and then you look at the markets and someone says,
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here's my portfolio.
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It's currently up 104% for the five months and these shares are up 250, 260, 87.
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You'd say, come on now, do me a favour.
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We know historically what's going to happen.
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Do you ever think that at night?
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Yes, yes, yes.
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I'm out of my comfort zone.
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It does take me out of my comfort zone.
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I understand NVIDIA. I understand Apple and Alphabets and Micro.
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We've been watching them for a long time.
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I know the management.
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I know what they do.
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But the rise of these businesses has taken me off guard,
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and I'm not quite sure where to go and how to handle it.
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And also, I don't fully understand their businesses.
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You know, that's the point.
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I can learn it, sure, but you've got to have some kind of technological background
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or understanding
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of where they fit in.
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And you've also, David, you can learn it today and you say, right, I've got the
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annual report here and I'm reading what they do,
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et cetera, and I understand it sort of.
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I mean, if I read it, I don't know, just the headline would be enough for me and
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I'd be confused.
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But if you did read it, the point is you're going to have to be subscribing.
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to three or four different AI daily or weekly newsletters to keep up with what
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that company has done.
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Because by reading it, you're already out of date because of the pace of
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technological change associated
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with artificial intelligence.
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Yeah, exactly.
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Well said.
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Because it's running ahead of me.
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You know what I mean?
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Far ahead of me.
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And, you know, it is real.
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This is real money being spent.
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So...
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companies.
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I mean, Dell is not a, it's a 275 billion business.
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It's a big business, been around.
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So they are doing the business and which enterprises are doing it, which this has
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gone down to companies.
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This is not, you know what, we've gone from the tech companies now down to
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enterprises, businesses actually spending,
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introducing proper operations and so on.
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So I'm a little out of my reach.
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If you understand what I mean, I'm holding on to the eggs in my basket, but
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I'm not looking elsewhere out simply because
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I think it's gone far too fast for me to grasp.
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I'm not writing this off,
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but I'm saying it goes at a pace where it's very difficult to keep in touch and
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to keep
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ahead.
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And there's a lot of technology around it.
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I just say, okay.
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NVIDIA, that's very nice.
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How do you suddenly find a chip that's going to satisfy this and how are you
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going to muscle your way into the industry?
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Those are the things that overnight announcements come out that are
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influencing the market dramatically.
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So what have we got today?
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NVIDIA up, Micron and AMD down.
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So those kind of things.
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Why?
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Because NVIDIA is now going to challenge their market, which was happening before
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in other areas.
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It's not just that, David.
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It's also the passive.
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the passive investment chunk of the market because on friday somebody would have said
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with their with
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their tracker their ai fund tracker their etf whatever it is we are now too we've
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got too much in video
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we've got too much micron um because we've gone over the percentage which was we're
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supposed to only have 3.4 percent but now we've
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got 3.6 percent so they trim it back and then they put the money into something
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else presumably i don't
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I don't know, but that's the way it works, isn't it?
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You have to keep on, and they've got special algorithms that tell them when to
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sell and when to buy,
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et cetera.
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Maybe at the end of the week, some of them have had to do some switching within and
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between the companies that
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you've spoken of so often.
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I don't know.
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It's exactly what happens.
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That's exactly what's happened.
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To try and keep pace because there's so many different ETFs.
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You know, we just.
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We just talk about the index trackers, but I mean, there are thousands of different
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ETFs that track various parts of the market.
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So I got an inquiry from a client who said, you know,
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I'm looking at my portfolio.
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I was only up 0.5%.
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The market's up 1.5%.
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Why?
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What is the...
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And you've got to go back and say, well, the reason is because, you know, this is
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where we are.
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This is where the market's going.
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You know, and it's this ongoing measure.
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You know, Lindsay, to be fair, I also think we're all trying to finish top of
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the league.
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You know, there's only room for one.
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You can't do that.
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And I think sometimes in investment, you've just got to tone down your
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expectations and say, look,
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as long as we're in the pack and we're doing okay, we're beating inflation, we're
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moving forward,
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you're making money or you're increasing your wealth, that's fine.
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But I think this constant bid to always be top,
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to have the perfect portfolio of the perfect companies that did perfectly.
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My answer to this, if somebody phoned me up, if someone had the temerity, the
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audacity, the gall to phone me up on a Monday and say,
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I see that this particular fund is up
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38% on the year and I'm only up 27%.
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What is that?
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I sit down and say, okay, Mr.
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Know-it-all, at the beginning of the year, January the 1st, if I'd phoned you and
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said, at the end of
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May, your portfolio is up 27% in dollar terms.
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Would you take that, Mr.
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Know-it-all?
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And he'd say, yes, of course I would.
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No problem at all.
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So we say, well, exactly.
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It is.
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Don't have the fear of missing out.
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Don't be greedy.
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Don't have, you know, that looking over the neighbor's hedge is lawn sort of
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approach to portfolio management.
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Just take it and get on with it.
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You're very lucky.
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That's what I'd say anyway.
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That's how we should approach it.
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You know, and that's how one should approach the market.
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But it's, as you say, in a...
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in markets which are run by algorithms and super fast computers and masses amounts of
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money flowing in and out
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you're never going to beat it you know you i don't even know if you want to join it
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but um that's you know that's what we face i always
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say every one of my clients has got a friend who's doing better than him or her
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you know because that's always but
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you can't you know as long as you're as long as you're in decent businesses that
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are forefront of growth or doing well coming out with good
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results.
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That's fine.
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And therefore, for that reason, coming down to it, I'm not going to sell where we
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are, you know,
16:50
and try to find what's coming up until I get a good understanding of where these
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businesses fit
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in.
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But that's the challenge.
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And, Lindsay, you're one person.
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I'm one person.
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You know, just little people with little brains.
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You can't understand what I'm saying.
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You know, you can't grasp it all.
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You can't analyze it all.
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You can't.
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It's just impossible.
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You know, I'm saying just one person here sitting at a desk.
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How many stocks in your portfolio, David Shapiro?
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How many would you say?
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A typical client portfolio.
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I would say 18 is maximum.
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So you're doing perfectly well.
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I think 18 is quite manageable.
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I mean, even 18 takes a lot of reading, a lot of tracking.
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It does.
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It does.
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And one of the problems is that it's a fascinating exercise to understand people.
17:40
and we're not selling a fund.
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I'm not selling a fund.
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I sell, yeah, the 18 shares in your portfolio.
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You can go down the list, and what happens is everything is in color.
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So the ones that are doing well are in green, and it's going to be the odd ones
17:57
that are red,
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and the conversation will always turn to the reds.
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No one will say, listen, we're up triple figures or even more than that in these
18:08
stocks percentage-wise.
18:10
You're only down a little in these, but why are we still got them?
18:11
These are underperformers.
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Why do you still hold them?
18:14
It's because they're good businesses and their time will come again.
18:20
Markets are going to change.
18:24
Economies are going to change.
18:25
People will start to go from technology somewhere along the line, get a bit more
18:31
confidence as rates come down,
18:33
and they'll start buying luxury goods or they'll start going on whatever it is.
18:36
And these companies will.
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you know come that they'll perform so you have to learn the psychology of how people
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think and you have to learn how i'm sure you know how to talk to them after decades
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of doing so yeah i'm sure you do and i'm sure they put the phone
18:54
down their teeth a bit yeah but
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it comes down to what you said you know when afterwards you said but you know your
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portfolio is up 25 over the last year
19:04
If you were to put that into a 10-year bond in the US, You're probably 4% or the
19:09
maximum, you know,
19:11
ignoring the movements that would have taken place in the capital.
19:15
If you'd followed Lindsay Williams in his Crystal Challenge portfolio, you'd be down
19:20
14.8%.
19:22
Lindsay, I'm with you there.
19:24
In fact, that's a good subject to come back to.
19:26
Well, let's come back to it then.
19:26
Let's come back to it.
19:27
I've done enough AI now.
19:28
I'm AI-ed out, actually.
19:30
I'm almost footballed out.
19:31
No, I'm arsed out, but we'll come to that in a minute.
19:34
Tell me about, what did you want to say?
19:36
Do you want to talk about the South African laggards?
19:38
Yeah, when I look at the JSC, it worries me.
19:42
You know, I came under quite a bit of criticism or attack because when,
19:49
and maybe, you know, the one thing, none of us are gurus.
19:52
You know, there's no such thing as a market guru.
19:55
The only thing is that we've been around a long time and we watch the market, you
20:00
know,
20:00
daily for years after years and you learn a bit of experience.
20:04
It's like a guitar player.
20:06
You know, if I spent every day of the last 50 years playing guitar, I might not be a
20:11
maestro, I might not be in the,
20:13
have a rock and roll band, you know, but I could still play.
20:17
I would have learned something.
20:19
And that's like market.
20:20
That's who we are.
20:21
We can still play.
20:22
We've been around, so we do pick up a few things.
20:27
But you're worried about the JSC, the South African element of the JSC.
20:31
When I saw gold spike when the war with Iran started,
20:37
it went up to, what, 53,000 or there, I think even higher than that.
20:42
And then it did a reverse and started to come down.
20:45
I said, you know, from my point of view, this is over.
20:48
you know when it starts to show those signs and it doesn't want to do what you
20:55
think it's going to do and i've slowly watched gold
20:57
start to come down no uh below 50 you know 49 48 and now we're below
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45 yes it's high was 5 625 intraday you've got very recently it
21:08
went to 4 400 it's bounced up again but now it's coming back down to there and i
21:15
think the long-term chart is
21:17
destroyed And I don't think you'll see that 5,600 again this year.
21:21
I don't think so.
21:22
It doesn't look like it to me, unless the dollar goes on a trot to the downside,
21:26
in which case the gold price in dollar terms will follow the weaker dollar.
21:30
And lots of people are saying that.
21:31
But while the war is around, the dollar is going to stay pretty steady, I reckon.
21:35
Yeah.
21:36
In fact, I think it's going to keep giving up its ground.
21:40
And this is not central banks buying.
21:42
It's just people getting very bored with it.
21:44
and started to lose money, very similar to Bitcoin,
21:47
which found a level in the 70s and doesn't look like it's ever going to go beyond
21:53
that.
21:55
And why I say that is because gold shares have started to come under pressure.
22:00
And having had a wonderful year last year, which was the real reason that the South
22:06
African market performed,
22:08
it was just we borrowed it from the gold shares and a few mining shares and
22:12
platinum shares, they're not performing this year.
22:14
They're dragging us down.
22:15
We're being dragged down also by the South African economy,
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despite the fact that some of the rating agencies have given the outlook as steady
22:26
and a whole lot of other
22:28
factors.
22:30
When I look at the market, for me, there's worrying signs.
22:31
And again, it's another one of those days.
22:32
It's got a funny personality goal.
22:34
And the people that invest in gold take on that personality.
22:38
They don't want to let go, David.
22:40
I know people that have done so well out of it.
22:42
And I say, well, have you done anything yet?
22:45
No, no, because of this, this, and this, and the margins, and they're printing
22:49
money, et cetera.
22:51
I say, well, that probably was in the price at the highs of the shares.
22:53
Yeah, but this and but that.
22:54
But everybody does that.
22:56
Gold is 44.56, by the way.
22:58
David, I want to wrap this up with a talk about Arsenal.
23:00
I want to talk about the match, which is pretty dreary, I have to admit.
23:07
And the other thing I want to say is that Arsenal are suddenly coming into
23:11
criticism.
23:13
Severe criticism.
23:15
And the first one that said it, and it's not somebody that you and I particularly
23:18
like, is Sir Alex Ferguson.
23:20
He sent a message to the owner of PSG and said, thank you for winning, well done, et
23:23
cetera.
23:23
You were playing against a team with terrible tactics and they are too precise
23:30
and they're too,
23:32
I don't know, they're too analytical.
23:32
Not they, Arteta is too analytical and it killed the game.
23:37
I don't agree with that, but I do understand where he's coming from.
23:42
You know, I thought about that.
23:45
But when you,
23:46
how else do you nullify those PSG players who are superb?
23:53
I mean, you never saw them.
23:54
Dembele was so frustrated.
23:56
He was kicking the ball all over the place.
23:59
And they read it.
24:00
It didn't make a great spectacle, especially even if you're an Arsenal fan,
24:06
because you just sat there, you know,
24:08
just watching this wall coming at them.
24:09
But, I mean.
24:10
They did nullify those players.
24:12
That's the tactics, that's the tactics.
24:14
But they never had a counterattack.
24:16
Who could they have put?
24:17
And that's my big worry is who do they put against those chaps?
24:21
You know, how do they attack?
24:22
You can't attack with Trossard or Saka or Kai Havertz,
24:28
and certainly not to match anything that PSG had.
24:31
I'll tell you what we'll do, David, because I've got to dash to another
24:36
podcast.
24:38
You and I have sort of tentatively agreed to do a football podcast with the working
24:42
title, It's Football, Not Soccer.
24:44
And we'll start with our history of, you know, you and I briefly tell people who we
24:49
are when it comes to football.
24:51
And then we'll talk about the league and the UEFA Champions League final, because
24:55
there are some fascinating aspects.
24:57
But for now, David Shapiro.
24:58
Enjoy New York.
24:59
Enjoy the summer.
25:00
I hope that Shakespeare in the Park thing that you went to was glorious and there's
25:04
more.
25:04
David Shapiro is from Sasson Securities.
25:06
Because it's Spanish.
25:09
Romeo and Juliet in Spanish.
25:11
Oh, well, you know, the language of love is international, David.
25:16
David Shapiro is from Sasson Securities, and that was Shapiro World.
25:19
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