Simon Shares

• Taste (JSE code: TAS) couldn't get the public to take up all of the 120million new shares, but a new shareholder of note did and it good news for the company.
• Naspers (JSE code: NPN) results talk of core HEPS. Now sure they tell us what 'core' means but as always I very skeptical of anything that is not IFRS.
• Wescoal (JSE code: WSL) results in part really hit it out the park with production up 82% while IFRS HEPS was 11.3c vs. 27.1c (company HEPS excluding BEE deal costs).
• Lafferty Group’s 2017 Global Bank Quality Benchmarking study is out, it ranks 100 major quoted banks across 32 countries and Capitec* (JSE code: CPI) comes out tops as the only bank to get five stars.
• Upcoming eents
  • JSE Power Hour: Recession proof stocks

* I hold ungeared positions.

The problem with buy and hold is not the math, which proves it works.

The problem is with the evidence, which proves investors can't do it.

— Bob Brinker (@BobBrinker) June 27, 2017

How long is long-term?

A recent question asked about some investing ideas and concluded with the comment that "I'm looking at long-term say 5 years.". Wow. For me five years is short term while long-term is decades (yes with a 's' at the end).

I am not falling into the trap of saying things are faster these days with always on smart phones with taxis at our beck an call and online derivative trading. But the tweet below highlights that while we know long-term buy and hold works excellently, especially with ETFs, the average investor finds it hard. Stats continually show that average holding periods for stocks has been rapidly reducing. On the NYSE it is now months whereas it used to be years and years.

I'm not sure if it's fear, impatience, indecision or just a greed to be rich quickly. But wealth creation takes time and sure it is no fun when over the last three years most local portfolios have returned nothing, only beating money under the bed.

What I do know is that thinking of a few years as long-term is bad.

We Get Mail

• Dale
  • I understand the logic behind an equally weighted ETF, and why it *should* be a good thing, but I can’t help wonder if it’s not a case of “in theory, but not in practise". If I compare the performance of the CSEW40 to the plain Satrix 40, without exception over an almost 10 years period, the Satrix 40 outperforms the equally weighted 40 – sometimes really significantly (thanks etfSA for the data).

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares

• Woolies* (JSE code: WHL) share price is under pressure hitting 12 month lows on Monday. Recession is hurting them as high LSM consumers shop down and even Australia is struggling economically. The winner here will be Shoprite* (JSE code: SHP) as they cater for mid/low LSM consumers and will pick up Woolies shoppers.
• Index changes effective Monday 19th. Only changes from the main four indices is Capitec* (JSE code: CPI) into the Top40 and Implats (JSE code: IMP) exits.

* I hold ungeared positions.

What do you trade? Why?

When I ask people this question I generally get a surprised look as if it is a stupid question and the answer is generally CFDs. The follow up question is always - why do you trade them? Here the answers get garbled because there is seldom a good reason.

We need to be strategic about what we trade. There are differences between; shares, indices and FX. Different funding, risks, costs, spreads and more. We need to understand what they are and trade those that best suits trading in general and our trading specifically.

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• Finally moving so at the pointy end of going small. Move date is next Wednesday which is also my recording day, so frankly not sure what the plan is re JSE Direct for next week. Will try make a plan, maybe a rebroadcast.
• PPC (JSE code: PPC), HEPS down 93% at 7c but this is all about the rest of Africa and a possible merger with AfriSam.
• Steinhoff (JSE code: SNH) results not bad, but so many moving parts it's hard to keep up.
• Bond and pref share ETFs for income.
• Upcoming events;
  • JSE Power Hour: Ways that management can mislead investors
  • JSE Power Hour: Trading for a living

Now for the recession

It was a surprise to most economists but thats moot as the economy and consumer is under severe pressure recession or not. Importantly this was for Q1 2017, so before the shuffle and downgrade. I think this is not going to be short and sharp, it's going to hurt as we have little to counter it.

• Government; cut interest rates, cut tax and increase spending.
• Personal; cut debt and spending.
• Investing; quality offshore bias, be careful of mid & small caps.
• We now really are Brazil.

We Get Mail

• Ryno
  • I think Buffett is actually a income investor.

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.