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

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You're listening to Strictly Business Podcast with Lindsay Williams.
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The JSC has closed its doors for another day, so it's time for the 5 o'clock
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shadow.
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And as always on a Thursday, I speak to David Shapiro from Sasson Securities and
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Viv Govender from Ranswiss,
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both in Johannesburg.
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David, I'll start with you.
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Why is the S&P above 7,500?
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7,494. I'm looking at the June future, so yeah.
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We haven't got above there.
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The high has been...
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7-4-9-7, that's a spot one.
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That's the spot, but it's beating on that door.
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And what scared me when I was listening, it could have been Goldman Sachs or
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someone like that said, oh,
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you know, our forecast is for 7-6 by the year end.
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And at that stage, I think it was below 7 or something.
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I said, okay, I can live with that.
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That's going to be great.
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But, you know, we're at 7-5 now, and where are we?
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May.
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So, there is a little bit of discomfort, but I must say,
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you learn to just sit back and relax and say, okay, let the market do what it does.
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I'm not going to try and fathom this out.
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NVIDIA now just keeps going higher and higher.
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It's been six or seven days, I think, on the trot trading.
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Where's it trading now?
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It's some ridiculous price, which is not ridiculous.
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It's 235.
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down.
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Lindsay, I don't know if he can remember where it was,
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but not too long ago there was a sell-off and they were back to $190 or something.
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So we're $45.
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No, it went way below $190.
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$165, David.
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Yeah.
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$165 in March.
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In March, okay.
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$165 in March.
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March.
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Yeah.
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Yeah.
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So you sit back and say, okay, Mr.
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Jensen Wang is in China.
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He's going to be selling some chips to China, whatever it is, but
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I'm just going to ride this out and not worry and enjoy it.
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I'm not going to brag, and I don't mean that in a bad way.
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You want to keep it internally and say, okay,
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I'm very happy because my big fear is that as soon as we get too bummed or too sure
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of ourselves, boom,
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the gods come and knock us out.
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They bash us in our knees and we just tumble.
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What I'm sensing now as somebody that has been interviewing people for a few decades
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is that you don't know why, but you've got to stay with it.
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Viv Offair was talking about something as well.
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And for the first time I've ever heard Viv Govender not really understanding why what
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he was describing
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to me, which is private, was going on.
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And Viv, when you see headlines like Cisco up 14%, I think to myself,
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where do I know Cisco from?
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I haven't heard Cisco for a long time.
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And then I remember Dimension Data.
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You used to look at Cisco's results to work out what Dimension Data was going to
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do on the JSC.
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Viv, it's starting not to make sense to me.
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Yeah.
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Look, I mean, the market's basically pricing in like, you know, AGI probably by
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next year.
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I mean, if you look at some of the valuations coming through right now, the
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predictions.
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of the valuations.
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I mean, we're about to see $6 trillion for the first time ever at NVIDIA.
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Google at $5 trillion.
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You know, these numbers are crazy.
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I mean, Micron continues to rally, you know, unbelievably.
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You know, it's hitting on $900 billion, probably going to hit a trillion the way
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it's going in the next week or so.
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Who knows?
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We are seeing such incredible movements happening in this market right now.
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While if you look at the oil market, for instance, if you look at what's happening
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with regards to diesel supply, you know,
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the world is not functioning properly at the moment.
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And, you know, there's a guy called Vaclav Smul.
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He's like Bill Gates' favorite, I don't know what you would call him, like
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economist slash, you know,
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historian slash whatever.
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And he says the world is founded on like four pillars, okay?
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I believe they are fertilizer.
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cement, plastics, and ammonia, I believe.
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Or something else, like steel, sorry, steel.
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So steel, cement, plastics, and fertilizer.
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And quite frankly, all of these things are under huge pressure at the moment because
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of what's been happening in the Middle East.
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And even places like the US, which you would think, the US is, people always say
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the US is energy independent.
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No, the US is a net energy exporter.
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It's a very different thing.
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What does it mean?
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Well, the energy...
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comes in different forms.
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One of the things that the US does not have the ability to produce enough of its
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own off is diesel.
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And what is diesel, you see?
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Okay, it's not just your car, your diesel car.
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It's farm equipment.
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It's mining equipment.
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It's trains.
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You know what I mean?
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It is basically the foundation of transport and a lot of other stuff in the
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modern economy.
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And quite frankly, the U.S.
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basically is going to have an issue with that.
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There's talks already.
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I mean, I think so today, India has stopped the export of sugar for four
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months.
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They had Modi come out with a statement just a few days ago where he was urging
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Indians to work from home and not to buy gold
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and a whole bunch of other stuff here.
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And I think they are down to like 60 days or so of.
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reserves at the moment.
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California, as a case in point.
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I'll just interrupt you.
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Oil reserves worldwide are at a 10-year low.
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Okay, I don't know what was happening 10 years ago.
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Excuse me, 2016.
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But it wasn't anything dramatic.
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But the point is that they're drawing down on stocks all the time.
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When I say they, I mean countries that rely on oil.
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And if it carries on,
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When you wake up in the morning and you look at oil at $105 or $102 or $112, it
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doesn't matter what it is,
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you are now conditioned to know that it's above $100.
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And that wasn't the case four, five, six months ago when it was $60 to $70 a
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barrel.
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And that is hugely important.
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Once the stuff that they bought at $60 to $70 has run out, then they have to buy the
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stuff, if they can get it,
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above $100, $110, etc.
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And then we've got a real problem.
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And Viv, in a way...
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we're saying the same thing.
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It's very scary.
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The fact that you two have invested in a sector that is doing so well, and hats off
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to you,
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doesn't really make me feel comfortable, if you see what I mean.
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There's a disconnect somewhere.
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You know when we start to worry, when our clients start to call us gurus?
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When they start to say to you, you know, you're gurus, you're so clever, now we're
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in trouble.
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You know, that's the end because there are no gurus.
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But look, I'll celebrate it for the meantime.
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I'm not, I've been here long enough to know when things, you know, start to run
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out of,
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get out of hand.
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I want to just ask Viv also just to comment or, you know, Lindsay, you
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yourself, just remember where we've come from.
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It was only a few months ago.
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that everybody was concerned about an AI bubble.
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And there was a huge amount of pressure.
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That was December.
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The shorts were full, yeah.
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You know, people were net short, you know, of the market.
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And AI stocks or technology stocks were battling.
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And suddenly, it's like, you know, it's been let out.
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You know, the tiger's been let out the cage and is running amok.
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And, you know, that's what's happening now.
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Everybody's just accumulating.
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And it's still, Lindsay, it's still very, very concentrated.
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You know, this is not across the board.
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It's in stocks like suddenly, you know, Cisco today up 15%.
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Intel, I don't know what it is up of the year.
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It's in the hundreds of percents.
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And a lot of the semiconductors as well.
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The SOX, which is a semiconductor, there's an ETF, a semiconductor ETF, it's up 60,
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70% this year.
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So we said, okay, you know, and it was a struggle to get people into it.
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When you talk about gurus, David, when your client phones you up and says you're
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a guru, because you stayed with
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NVIDIA when it was 165, 170.
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And I heard you on that podcast with that idiot Williams, and he was saying, well,
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there is a bubble,
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and it can't last because if you look back in history, these things never last.
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But you stayed with it, so you're a guru.
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A guru is knowing when to sell, and that is where you become gurus.
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If one of you breaks ranks and says, okay, that's it, I'm taking 50% off the table or
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something like that,
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something meaningful instead of the 2%, 3%
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that you do regularly just to put some money in because one of your stocks is,
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Oh,
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over-weighted or something.
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No, the selling time is very important.
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And from what I'm hearing today, then you're going to get one or two more gaps
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on the market, shooting up the Ciscos and everything else,
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the AMDs of this world.
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And then suddenly it's all going to fall in heat.
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But the other thing I said, if the NASDAQ fell 10% in one day and there was shock
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horror,
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it would still be only at 27,000. So it goes to 30,000.
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10% is what, 3,000?
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Yeah, down to 27.
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When was the last time it was at 27,000?
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David, you can tell us from one of your graphs.
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It means nothing if it falls 10% in a day.
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No, no.
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I know.
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That's why it just pays us, you know.
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And I'll get shock and awe, you know, if…
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video which is 235 suddenly comes all the way back to 220 and i said oh my god you
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know in the meantime it's
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that's where it was two days ago or something you know you're spoiling your
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clients i want to tell you i want to tell you
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something now which is which is very personal and personal to david uh but he
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shared it with viv and i uh earlier on so if i can
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work out on my phone how i can read something here we go i'm reading i'm
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reading this to you shapira so
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there we go ship and Viv, that's what I've got here.
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Here it is.
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This is David sending a message to myself and Viv Govender.
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It has been a tradition in my family for me to draw a caricature of my boys and
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nephews for their bar mitzvahs.
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Now it's my grandson's chance.
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Seriously, I haven't been in the mood to draw, he says.
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So I go on to AI and ask to give a cartoon or outline to copy.
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I said I wanted to do a pen and ink drawing.
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I sent a photo.
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Five minutes later.
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Brilliant.
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And he sent the picture that the AI bot has sent him.
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He did one in football gear, but my daughter-in-law said I better make it
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religious.
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Still, there is no way I can compete.
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I'm in awe.
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I'm going to do this, i.e.
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sketching, as a hobby.
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Now, David, when I look at that picture, yes, it's great, but it has no soul to it.
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Everything's perfect.
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What you need is, for example, if you see a model or an actor.
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Actress, you see her, she's got a gap in her teeth.
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That makes her beautiful.
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It's not the perfection of what they've sent you.
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Viv, over to you on this one before David comments.
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I think it's the same thing as basically taking a helicopter to the top of Everest.
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It's not the same as climbing that mountain.
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You know what I mean?
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There is something to be said for the effort put into things.
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Look, I mean, with regards to AI, I think people would rate it like a C student.
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It's possible.
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It's good.
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They're definitely better than most people, but there's something that human
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beings put into art, I hope, anyways.
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I would like to believe so.
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I don't know if it's true.
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I like to believe so.
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That almost is magical.
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And I think that is something that we can't, you know, ever have AI replace.
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Look, with regards to David's thing about socks, it's not even the year.
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Socks is up 71% in the last six weeks.
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You know what I mean?
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it's six weeks and that's the thing i was talking about my portfolio and i'm not
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going to see how much it did but it's it's happened in the last six weeks it's
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happened since the end of march that the market has gone really crazy and i'm
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trying to think of why that is look we've had obviously the mythos
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thing come out and there's a there's a company called meter m-e-t-r right then
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they do a
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measurement of ai performance in terms of how long does it take to do certain tasks
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so what they do is get a bunch of humans that are expert at
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certain tasks as other things and they have them do certain tasks and measure how
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long it takes.
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And then what they do is they measure how many, at what point in time, how many
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hours, sorry, or how much time
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AI can do a task and be like 50% or so certain to do it right, okay?
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And that amount of time is doubling roughly every seven months.
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So if it's like a minute, it goes to like two minutes in seven months, it goes to
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four in like another seven months.
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And in a few years' time, you're going from a minute to an hour, an hour to two
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hours.
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And once you get to the couple of hour periods, you find that's almost all human
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work,
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like big tasks to be done in a day's work or something.
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And the fact of the matter is that not only are we seeing this happening, this
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trend continue, but over the last couple of iterations of this year,
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it seems that the actual speed of doubling is increasing.
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And that, I think, is what the market is seeing at the moment, is that they are
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starting to see real work being done by AI.
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And they suddenly see that the trends are starting to accelerate.
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And why is this?
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Well, quite frankly, it's because the AI is not helping them make the AI.
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And there's always been the thing in the AI sphere called FOM,
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which basically means that it's when things start going exponential because the
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AI starts making better AI,
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which in turn makes better AI, which makes better AI.
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You know what I mean?
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And we also see that at Anthropic and other places, because they focused on
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programming,
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They are now starting to get programming done by AI, which makes things a lot
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better.
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And one last thing before I finish off here.
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When it comes to what can be done with AI that maybe cannot be done with human
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beings, there's something called assembly language.
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I don't know if you guys know what assembly language is.
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It is a more fundamental...
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Yeah.
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That was right at the beginning.
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Yeah.
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Then came COBOL. You know, assembler, COBOL, all that.
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Yeah.
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Okay.
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And the reason we do COBOL and C and we do basically Java and all the other kind of
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things here, and Python, etc.,
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is because they are easier for humans to understand.
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But if you actually go and program everything in assembly, you'd be like 100
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times more efficient with computer programming, you know what I mean?
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Because it would be so much easier for the computer to handle that kind of thing.
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You ever wonder what happens when AI starts doing assembly language
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programming?
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Because the reason we don't do it is because it just takes too much time for a
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human to do this thing.
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It's just too complicated.
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There's not a distinction for AI.
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And I think that we are starting to see that kind of stuff come through.
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These things that were, you know, just not possible with human beings, but now become
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possible with AI.
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Things like assembly language.
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And we have driverless vehicles really taking off.
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You'll be able to basically order like something from the shop and have it
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delivered to your house for maybe...
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5-10% more than it costs at the shop in terms of I'm talking about small things
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like maybe a chocolate bar or something.
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Can you imagine what it means to basically order a chocolate bar and have it
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delivered to your house in like say 20 minutes or 10 minutes or 5 minutes,
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it depends on if they may be flying their drone.
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These are the kind of things that we are starting to see becoming viable in this
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space and I think that's what the market is seeing at the moment.
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Do you know what?
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Go, sorry, go.
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Finish off.
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Sorry, I didn't mean to.
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That's why when it comes to the thing, the AIA
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race and when i would sell is that i don't chose to expect there to be no sell-offs
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but the only time i will
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sell is when i stop seeing this doubling you know ratio uh carrying out the way it
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is when i stop seeing the
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scaling working the way it is basically i stop seeing the science improve at the
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rate it's been currently improving so long
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as the science improves that is currently improving doesn't matter what the
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valuation is it's still gonna be cheap in the long term you know what i mean and
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that is why i'm
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i'm still sticking by but like But to be fair, Lindsay, I am nervous.
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I'm still human.
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I can hear it.
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I can hear it in your voice, Viv.
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Exactly what you just said.
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You're a human.
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Normally you're very confident, but in a quiet and considered way.
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You've been rambling now.
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And not rambling in a bad way, rambling in a good way.
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But you are talking, I can't get out because I've got a fear of missing out.
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But I can see gaps on the charts.
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As you speak to me about Cisco at 15%, I can see so many shares that are gapping up
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from the previous day's close.
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And that's when you know it's over.
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That brought up an incredibly important point and a wonderful description.
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I'm a pioneering computer.
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Our firm back in the 1950s was one of the first firms, was the first firm in the
17:13
country to use
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IBM, the RAMAC, or what I think was called the RAMAC 360, whatever it was.
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And everything was done in Assembler. You couldn't find Assembler.
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programmers because they weren't around it was such a new industry and and from that
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um i went after
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studying after doing accountancy i went to do a course in in cobalt you know two-year
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diploma and learned but i
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mean even
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then cobalt was very very difficult but it was it was huge step up from assembler and
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i
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remember i used to get stuck on having to do job control language i mean these were
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impossible.
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And then...
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As soon as they did our qualifier, they came out with BASIC, which just made
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everything a lot simpler.
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You know, on a laptop, not on a laptop, on a desktop.
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So Vivid's a very vivid description of how things are changing and what
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AI is doing.
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So even though that increased the pace of computer language, you know, and brought
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on from that,
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we got MS-DOS and, you know, where we are today.
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And now we're in a different realm.
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Okay.
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This also tells me something.
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It makes a lot of sense.
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We've spoken about this before, and I've put this to you both.
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The main stocks, the ones that are driving the market, they drove it in 2025.
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After Liberation Day, so-called, the market went, it didn't go parabolic, but
18:37
it went up very nicely.
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But it was a narrow market.
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To me, it's been narrow up to now.
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But when I hear Cisco at 15%, then it's what I said a couple of weeks ago.
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What are the fringe companies?
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What are the auxiliary companies?
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outside of the core that are going to do well.
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And they've already started, David, in spectacular fashion.
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So that's what you two have got to find.
19:00
You know what?
19:01
That justifies your guru status.
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But the true guru is the seller.
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But anyway, David, carry on, and then Viv can come to auxiliary companies.
19:09
There are some very interesting issues around this because we've been
19:16
looking and delving into Thank you.
19:19
Okay.
19:19
You mentioned a shortage of diesel, but for data centers,
19:23
it's going to be a shortage of power and a shortage of metals.
19:27
And suddenly, I don't know if you've noticed, but last year we made a big fuss
19:33
about gold and platinum prices.
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All of a sudden, you've got copper at all-time highs.
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And, you know, you've got BHP up 40-odd percent this year, Glencore,
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Anglo-American, Rio Tinto, South 32, all of those.
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or keeping the JSC afloat.
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Take that away.
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If the JSC is in deep trouble, I mean, it's down if you've looked at the
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retailers and so on.
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Those are the areas, you know, copper is going to be incredibly important, even
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though, you know,
20:07
even though you're going to use fiber optics and so on.
20:08
So that's a massive thing.
20:09
I don't know if you've noticed, but in the last two days, Ford is up something like
20:15
20 percent.
20:17
Ford Motor Company.
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Why?
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It's not why.
20:23
I'll tell you why.
20:25
It's because they're going to convert one of their factories.
20:27
into a battery energy storage business.
20:28
No, come on.
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They've got it.
20:30
I promise you, they've got a deal with CATL, which is the Chinese company.
20:35
They've got a licensing agreement, Contemporary Amperix Technology Limited, I
20:41
think that's what it's called,
20:43
lithium ion batteries.
20:44
So they're going into what they call E, I can't remember what they call it,
20:51
either E models or something to do with it.
20:53
small e meaning, you know, into battery storage.
20:58
So it's a complete change, Ford Motor Company.
21:02
So, you know, this is what's happening as a result of, you know,
21:09
of all the developments.
21:10
So here's a company turned around.
21:13
Why?
21:13
You need storage.
21:14
You need, you know, utilities need storage because of the new electricity that's
21:20
going to be,
21:20
or the demand for power and so on.
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So there's so many areas.
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The problem is that we've got to get away from the old companies, you know, the
21:31
Coca-Colas and so on,
21:33
the Procter & Gamble and various businesses like that, the cigarette
21:36
companies and that.
21:38
And you've got to focus on where the economies are heading.
21:42
Last year there was a table that somebody told me about and they said that this is
21:48
the list
21:50
of stock exchanges.
21:51
Their all-share index, the equivalent of their all-share index, this is how they've
21:57
performed in 2025.
21:59
What do you think is going to be the best performer in 2026?
22:00
I said, well, and I just blurted it out, Chile.
22:03
And the only reason I said Chile was because of copper.
22:06
And I don't know where it is, but, I mean, copper consistently goes to all-time
22:11
record highs.
22:11
The copper price on the London Metal Exchange closed last night above 14.
22:16
thousand dollars per ton i mean not per 10 times but per ton and as i'm looking at it
22:23
well i'll give it to you
22:25
later on but it's quite extraordinary uh viv this is um i i don't know maybe
22:30
when you said when
22:32
i asked you where we are in the momentum cycle of ar you said imagine lindsey
22:39
somebody's just got a steam engine
22:41
in manchester and you were referring to the industrial revolution do you still
22:45
stand by that statement viv
22:47
Yes.
22:47
One thing I want to point out, that in a market, what you want to do is find
22:52
imbalances, right?
22:54
And one of the imbalances that, like David's brought it up here, the energy
22:55
stock.
22:56
If you look at the amount of money going into, for instance, Micron and NVIDIA and
23:01
all these guys here,
23:03
then you calculate how many chips these guys have to make to justify this price.
23:07
Then calculate how much energy do these chips require?
23:11
And that's where the gap comes.
23:13
There is not enough energy being added to the grid.
23:15
to basically power the chips that these companies are expecting to make to justify
23:21
the valuation they have at the moment.
23:23
You see what I mean?
23:25
So it's almost like you're seeing all those cars being sold out there,
23:27
but you basically look at the petrol and think there's not enough petrol to
23:33
basically fire up or to run these cars.
23:35
And so that is why we are seeing some of the stuff happening.
23:36
Now, the one caveat to this is that what could break this?
23:39
It would be if the US started to sell these things or allow the sale of these
23:46
things to China, because China has the energy to basically run them.
23:48
So that's the one thing I think might be the thing that breaks this bottleneck.
23:52
But if we don't have China coming in, then you basically have a mismatch in the
23:58
market between the energy available and
24:00
the amount of chips that are going to be available.
24:02
And chips are not going to be the bottleneck by the end of the year in that
24:04
environment or next year.
24:06
I think maybe next year, definitely, but maybe even this year.
24:09
It would be the amount of energy required to run these chips.
24:11
And you are seeing out there at the moment And.
24:14
You know, we talk about like Ford and so on, but there are actually, you know,
24:18
industrial companies being bought out by these chip makers or these data companies,
24:25
data center companies.
24:25
And what they are doing is they are buying them just for the supply of energy.
24:28
So these companies were making whatever steel, whatnot.
24:31
They have energy supplies, contracts with the grid.
24:34
And if you just wanted to place the steel company with data centers and just use the
24:40
same energy, it suddenly becomes a viable business.
24:42
And I think that is what we are seeing at the moment.
24:43
And that's kind of what we saw, for instance,
24:45
with regards to the XAI sale of Colossus 1 or rental to Colossus 1 to Anthropic,
24:51
is that if you have the infrastructure in place, quite frankly, with the chip and
24:56
the energy.
24:58
That is more valuable than either of those things separately at the moment.
25:02
Gentlemen, the dollar-rand is 1646.
25:05
The British pound against the rand is 2219.
25:07
And the euro-rand is 1922.
25:10
On to commodities.
25:11
The gold price is flat on the day, $4,687 per ounce.
25:17
It's a dollar play now.
25:18
It's not an Iran-US-Israel play.
25:23
OK.
25:24
Platinum.
25:25
Wow.
25:26
This is a horrible story.
25:29
Down 5% on the day, 2086 for platinum.
25:32
Palladium down 4.75% to 1463.
25:36
Having a look at the oil price, again, we've become sanguine.
25:39
We've become numb to the fact that it's above 100 every single day.
25:43
Brent crude oil, 105.
25:45
Okay, it's down half a percent.
25:46
105.13, sorry, down nearly half a percent.
25:49
West Texas crude is par 78, $100.
25:53
and 78 cents per barrel, down a quarter of a percent.
25:57
The copper price, down 1.3%, $6.55 per pound,
26:03
probably just below 14,000 on the London Metal Exchange.
26:07
Incidentally, Nigel Farage, potentially the new Prime Minister of the UK in the
26:12
next few years,
26:14
used to be an NME copper trader.
26:18
The South African 10-year bond yield is 8.66%, the US 10-year bond yield.
26:23
Got to 450 yesterday.
26:26
We were talking about that.
26:27
I don't know if Viv was poo-pooing me, but he listened with interest to me saying
26:34
it's going to go to 556,
26:36
the yield in the next year or so.
26:38
It's currently 4.45%. And S&P 500 futures, yeah,
26:41
it doesn't stop us up 0.8% to 7,528 for the futures.
26:47
So we must, David, on the spot price have gone through 7,500, I think.
26:53
I will tell you in a second.
26:54
Thank you very much.
26:55
Extraordinary.
26:57
It is.
26:59
7-5-0-8.
27:01
There you go.
27:02
So it's gone through there.
27:03
If you said to somebody the war in Iran and if you said,
27:08
look who's in charge of the United States and see what he does when he goes to
27:13
China, et cetera,
27:15
goodness knows what the fallout will be if he says something.
27:16
He's been well behaved so far.
27:17
And you'd say, well, where's the S&P?
27:19
They'd probably say probably about 5,000.
27:21
No.
27:22
It's on its way to 8,000.
27:24
On the JSC today, David, why is pick and pay up 8.4%?
27:30
It's odd.
27:31
I think they've been terribly oversold.
27:34
There has been a turnaround or some bargained buying in some of
27:41
the retailers.
27:42
I think it's also, you know, it owns a big share in Boxer.
27:45
So the price is underpinned by Boxer, and I think they've sold it down, Boxer's up.
27:51
It's really being lifted by that.
27:53
You're not paying anything for pick and pay.
27:56
R22.25 per share.
27:59
Can you believe it?
28:00
Yeah, but still up 8.4% on the day.
28:02
Data tech up four and a quarter.
28:03
That's a Cisco story.
28:05
Maybe, I don't know.
28:06
British American Tobacco.
28:08
David spoke about that.
28:12
R1,093.26 per share.
28:14
3.3% higher.
28:15
Grindr up 3.3%.
28:17
Shipping story, obviously.
28:19
Karoo on the downside after their results, down nearly 10%.
28:22
Implats down four and two thirds after that PGM story.
28:28
Horrible day for them.
28:29
Valterra down 4.1.
28:31
Tungela down 4%.
28:33
And African Rainbow Minerals down 3.5%. Viv,
28:37
do you ever get tempted not to look at the JSE when you look at your portfolio
28:42
elsewhere?
28:44
Yeah, I do.
28:45
I mean, just talking about the Boxer thing, I mean, David said it values
28:47
nothing.
28:48
They value pick and pay as negative at the moment.
28:51
The pick and pay is worth, I mean, the stake of pick and pay is worth less than
28:57
its stake in the current valuation in Boxer.
28:59
I mean, that is a discrepancy of note, I would think.
29:02
Yeah, but in terms of the markets, look, last year, it was one of the three best
29:07
performing markets in the world in dollar terms.
29:09
This year, there are issues, but there's still areas of value, like David
29:13
mentioned, you know, the copper producers, some of the
29:15
The things in South Africa are still valuable.
29:18
But overall, I don't think we're going to have as good a year this year by any means
29:22
as we did last year.
29:24
You know, Lindsay, just that Peru story.
29:26
You know, this is a favorite.
29:28
This has been something that everybody's pursued and hasn't let anybody down today.
29:33
And the first time, and I don't know the reason, and, you know, just going through
29:39
the market before we came on air,
29:41
looked at the results, and you've got profitability down.
29:44
You know, all the other metrics are up, revenue and clients and so on.
29:49
And I don't know.
29:50
And it's a trading statement.
29:52
So I don't know the backdrop to it.
29:53
The margins were down.
29:55
But this is a first crack.
29:57
We've seen.
29:58
And I don't like those things.
30:00
You know what I mean?
30:01
I don't like suddenly all these stock like this,
30:05
which has been so well followed by the market.
30:09
And, you know, when you start to see cracks in there, whatever it is that's
30:15
taken it down,
30:17
then you've got to be concerned.
30:19
Is this the time when someone like Buffett would sell?
30:21
Because when he sees anything that doesn't seem quite right, he says, that's it.
30:22
I had a good run.
30:23
I'm out of this thing.
30:24
He doesn't even look at it afterwards.
30:27
We need to look at the results.
30:28
You know, this was just a short form announcement.
30:31
So I don't know.
30:32
In fact, I'm going to go through it now.
30:34
But no, in fact, it's not a short due.
30:36
It's quite a big announcement.
30:37
So the details will be there.
30:40
But this is surprising.
30:42
The fact that the market cracked it like this, you know,
30:45
you don't know whether this is a once-off or whether there is something that, you
30:50
know, addressed.
30:51
I see the same thing in clicks.
30:52
When you start to see structural issues.
30:56
And nothing to do with the economy or anything.
31:00
When structural issues start to appear, breakdowns in their systems and little
31:06
hiccups like that,
31:08
particularly for companies that have never let us down, then I get worried.
31:10
Then I say, OK, take a step back.
31:14
Just have a closer look.
31:15
Quite right.
31:16
Aviv, I read the sort of transcript of an interview with a very well-known fund
31:23
manager,
31:24
a South African fund manager.
31:25
And he says, I love investing in stock markets where there are D listings,
31:32
consistent D listings over the years,
31:34
because that means that the private investors with lots of money and lots of
31:38
sense can see value.
31:40
So they buy the company, take it off the JSC.
31:41
Other people like David, for example, might say this is the sign of a dying
31:48
market because they don't need to be on the JSC.
31:50
It's too expensive.
31:52
And therefore, the company is not doing well.
31:54
that means you should avoid the JSC.
31:56
I'm not saying that's me putting words in your mouth, David.
31:58
But Viv, what would you say?
32:00
Would you say, I want to be in a market like that because people see value,
32:03
they're taking them off the market,
32:05
or you take the potential David Shapiro stance?
32:07
Look, I would think if you had to look at one of the hottest markets in the world
32:14
right now, it's like the US markets where we might have one,
32:16
two, maybe even three trillion dollar listings in the next year, you know, IPOs.
32:20
I think that's a much stronger market because there's obviously, yes, there are,
32:26
you know, you could argue maybe why are you listing,
32:28
why are you putting stuff in the public market?
32:30
Because nowadays people list because of the fact that they want to get liquidity
32:33
for, you know, early investors, etc.
32:35
Delisting, on the other hand, yes, maybe some people are finding value there, but
32:40
they're often not taking things out at high levels.
32:42
They're taking things out that have fallen so dramatically.
32:44
And they think like with the case we talked about right now at Pick and Pay,
32:47
that there must be some value in this company.
32:49
It can't be negative value.
32:51
And therefore, you want to buy into that.
32:52
I think it's a far healthier thing to have listings than delistings longer term.
32:55
Shorter term, you might say the market's undervalued because there's delistings.
32:58
But longer term is the sign of a very sick market to have more delistings than
33:02
listings.
33:03
Okay, David, talking about sick markets, and that's probably not what I should say,
33:08
but give me the closing indices on the JSE, please.
33:12
We closed flat or down 0.2%, down 18 points at 117.362.
33:18
Because of the reason you mentioned, resources were down because of the
33:24
platinum price, gold price and so on.
33:26
But strangely, diversifieds were also down.
33:28
So the resource index down one and a half percent.
33:31
Financials and industrials steady, although the top end of the industrial
33:38
market was under a little bit of pressure.
33:40
But there were more gainers than losers.
33:43
And there was a recovery in retailers, which have been hurt very badly.
33:47
We've seen a little bit of a recovery there and also recovery in property
33:54
stocks, which are being hurt as well lately.
33:56
I'm just going to look at the volume trade today.
33:58
Very low.
34:00
This I haven't seen for a long time.
34:02
Just about 18 odd billion.
34:04
The interesting thing is NASPERS are back on track.
34:07
They sold out of the, what was it, one of the companies, delivery companies, they've
34:12
got cash.
34:14
So they're back to buying back their shares.
34:14
last person process dictating or dominating the trade on the JSC.
34:20
But a very, very quiet day.
34:23
Yeah, it's a European holiday over here, so maybe that's something to do with
34:29
Ascension Day, so it may be a factor.
34:31
But anyway, gentlemen, thanks so much for your time.
34:31
Viv Govender is from RAND Swiss, and David Shapiro from Sasson Securities, both in
34:35
Johannesburg.
34:36
And that was the 5 o'clock shadow.
34:38
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34:45
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34:47
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