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JSE Direct with Simon Brown

Weekly podcast hosted by Simon Brown covering the JSE and listed companies.
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Now displaying: March, 2018
Mar 28, 2018

“Brought to you by Absa ETFs”

Simon Shares

  • Back from holiday and with lots of ideas around what you do and don't like for JSE Direct. That said main comment was not to really change except maybe some experts occasionally on broad topics.
  • Markets falling and Top40 is down some 8% for the year so far. End of the world? Not likely. As always, traders know and obey your stops. Investors know your stocks and entry points.
  • Naspers (JSE code: NPN) is under R3k and off some 30% since the November highs and is in large part why our market is under water as it's the largest stock by a mile in the indices.
  • MPC cut repo rate by 0.25%, 4 members voted for the cut and three for no change. No discussion of a 0.5% cut. Interestingly the VAT increase effective on Sunday is expected to temporarily add 0.6% to inflation.
  • Moodys kept us out of junk and improved our outlook to stable from negative.
  • Anchor group (JSE code: ACG) results were bleak but seemingly the bad news is now behind them and the share is responding well, up some 50% since the lows of January and this is a stock pick from Anthony Clark

Can you pick a winning fund?

The latest SPIVA for SA is out and it is bleak reading for active managers in South Africa. Around 75% are beaten by the benchmark over one, three and five years.

  • Benchmark is Domestic Shareholder Weighted (DSW) capped or normal.

This means you have a 1 in 4 chance of picking an out preforming fund - very bleak odds.

So here's the question, and it is a real question. How does one pick the winning manager going forward? There most definitely will be those who out preform, some even consistently, but how do we spot them in advance? They themselves will tell you that past performance is no guarantee of future performance, and this is 100% true for a bunch of reasons.

  • Changes in personal. A winning manager leaves, is the replacement as good?
  • They had a few lucky calls or managed to avoid some disaster that beset the market. Skill or luck?
  • As they get larger it becomes harder as your investable universe shrinks.
  • I remember a Morningstar report from a few years ago looking at the US market that said the only reliable predictor of future returns was fees. The lower the fee the more likely the fund will out preform. This makes sense, but it is still not a full proof method.

I also know a number of people who chart unit trusts with fairly good success. Either just normal technical analysis or relative performance. Of course tax is an issue here.

If you have a method for picking winning funds let us know.



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.

Mar 14, 2018

“Brought to you by Absa ETFs”

300 shows, I haven't been making a fuss because it just feels old, very old. Add to that almost three years as a live radio show on Classic FM, starting from 8 July 2008. It's almost ten years of a weekly (albeit changing) show. We started life focusing outside the Top40 as the other shows seldom ever did anything in the small and mid cap space - then everybody did. So we have evolved over time. The question is where to next? Another ten years (truthfully that scares me). Send me your ideas on what we should or should not be doing.



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.

Mar 7, 2018

“Brought to you by Absa ETFs”

Simon Shares

Fallen angels (devils?)

When a share is hit by scandal it can take ages to recovery as investors shy away from the stock.

Some like Steinhoff (JSE code: SNH) will never recover due to the seemingly rampant fraud hat happened. Others like EOH may but will stay under 'caution' for a while as will the Resilient (JSE code: RES) stable of stocks. Others such as Capitec* (JSE code: CPI) will also struggle for a while but should shrug it off in time.

Tiger Brands (JSE code: TBS) has held up fairly well since the Listeriosis story broke on the weekend and is only back to November levels. But it could get real bad with almost 200 dead people, but markets seem to not be so concerned with these sort of issues. I remember Pioneer (JSE code: PFG) righting the bread fixing claims, eventually paying a R1billion fine and the share rocketed. In part it is the known vs. unknown. PFG struggled until the fine was agreed on, and TBS could well see its share price struggle until some sort of finality is reached - and that cold be years.

The concern is perception and some potential investors will stay away while existing holders may head for the hills and this means less buyers for the stock so less/slower upside.

Your strategy needs to ask if the scandal is terminal, long-term or merely a passing fad? Then remember if it is time to panic, panic quick.



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.

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