WorldWide Markets with Simon Brown

Simon Shares Steinhoff (JSE code: SNH) results for September 2017 are out and they're a mess. All they really have is a c70% stake in Pepkor. Trade wars have again spooked the market with the orange trumpet going on a Twitter rampage on Sunday, but as I record US markets are green again. Upcoming events; 23 May ~ JSE Power Hour: Mastering stop losses with Trader Petri Subscriber to our feed here Subscribe or review us in iTunes Elections and markets Recording this on Wednesday afternoon, so voting is still on-going and I have no idea what the results will be. But some thoughts. As a country fairly new to democracy we're really good at it and this is something to be very proud of, many countries (including supposed developed ones) are not nearly as good at democracy as we are. The IEC is world class and we accept the results. The majority party loses provinces, metros and the world doesn't end, we all just carry on. Sure there will be some messes in some places, but pretty much our voting is reflective of the will of the people. On this point, if your party loses you don't get to call the winner voters idiots. People vote how they do for their own reasons. We don't all vote the same. That's democracy, if you don't like it there are plenty countries without democracy. I am already seeing some Tweets calling out voters of one or another party idiots. This smacks of immaturity and doesn't sit within democracy. Polls leading up the election have mostly been in the same theme with the exception being the recent IRR polling data which has the ANC definitely losing Gauteng and likely losing nationally. But we fail to understand polling. Voter turn out is very important in polling for an election as is the methodology of the sample you're polling. Pollsters do a lot of post polling 'tweaking' so the potential for bias becomes very real. But being wrong doesn't make the pollster and idiot or a fraud. Polling is not an exact science and in a two horse race the margin of error is usually at least 3.5% and the victory margin is generally less. So even the polls for Brexit and Trump were within that margin of error. Markets have already run hard locally since the late 2018 lows but will likely like the results. Not as to who wins, more that we're good at democracy. The argument that a strong victory for the ANC will be good for markets is bogus and cooked up by people who simple do not understand the ANC process or constitution. Removing Ramaphosa before the next ANC elective conference in 2022 certainly is possible but it is exceedingly difficult and not likely to happen. Importantly the losers in an election always work against the winners, always. Nothing special there. So markets will like the result, pretty much regardless how much the ANC wins by. But will they go much higher? We're already up almost 11% year-to-date and sure we can end the year higher. Heck much higher. But turning around South Africa, jailing corruption, getting GDP going again. This will all take time, it can happen. It is already happening and has been since 14 February 2018. The best place to be will be SA Inc. stocks, they'll benefit most from an improving economy locally. Offshore and US$ stocks will find it tougher as Rand strength is likely over the next few years. My election stocks would be the likes of City Lodge* (JSE code: CLH), Coronation* (JSE code: CML), retailers (my pick is Shoprite* (JSE code: SHP)). Heck about half the JSE is local and been killed over the last five years. Be careful with the truly beaten down, they will take longer to recover. They will eventually, but the market likes easy money so will initially move into those already responding. As always, buy the quality at good prices - nothing clever here. The Exchange Traded Fund (ETF) is probably the MidCap ETF from Ashburton, ASHMID. The index is only +4.7% year-to-date and full of SA Inc. The chart looks ugly, but it will start to recover in time. Of course the wheels fall off if the wheels fall off globally. * I hold ungeared positions. 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 By this time net week we'll know the results of the 2019 elections. It's been a quieter election season than I'd expected - which is great. Coronation* (JSE code: CML) update. Assets under management (AUM) flat and spot on what I expected but average AUM was 8% lower for the period. HEPS 20%-30% lower worse than the 15%-20% down I expected on the back of average AUM being 8% lower even though it was flat start to finish. I hold and am happy with some cheeky bids in lower if anybody wants to sell to me at discount? I have been buying some Barloworld* (JSE code: BAW) in this pull back as per my Graham value webcast from a few weeks ago after missing my initial entry when it ran to +R130. Still have some bids in lower down. Up coming events; * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Shares or cash for dividends? A great question in my inbox, why do some companies issues shares instead of cash for dividends and which should we take? The why is simple enough, the company wants to pay the dividend but also wants to hang onto cash, usually because they have debt to pay off or a large deal pending. Pay the dividend with shares keeps some cash while still 'paying' a dividend. This is a potential warning sign worth digging into. Why the shares rather than cash? Is liquidity dying, do they have debt problems? Maybe not, but dig around anyway just in case. The trick is that these shares now have a perpetual right on all future profits, so they are more 'expensive' than cash which is why they're firstly not a great idea for the company and why I will usually take them as it's not just this dividend I get, but all future dividends as well. Further if not every share holder takes the shares, then your economic interest in the company increases. Example, you own 20 of 100 shares = 20%. They issue a 5% dividend, that's 5 shares dividend in total, 1 goes to you, 3 to others and 1 shareholder takes cash, only 4 new shares issued. Now you have 21 of 104 shares = 20.2%. We also save on brokerage if we take shares and typically they'll be issued at a slight discount (around 5%) to the share price. As a rule I will take the shares unless I think the share price is way over priced, but the important consideration is the future dividends so I pretty much always take the shares. 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 So Christo Wiese wants to sell his non economic but voting Shoprite* (JSE code: SHP) shares back to the company for some R3.6billion? I thinks not, albeit seems I am in a minority here. Afrimat (JSE code: AFT) has made a non-binding offer to buy a Universal Coal (an Australian company mining in SA). The deal is about half their market cap and at a price some 10% better than the next best offer that I knew about. They really are the masters of deals, paying a good price and making them work. But this one is a biggie and risks are much higher than the other smaller deals the've done. The latest SPIVA for South Africa is out and always it makes for bleak reading. * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Unlisted shares Unlisted shares, those not listed and trading on a recognised exchange such as the JSE. There two ways we get unlisted shares; We buy them hoping they will eventually list and become the next Uber (albeit Uber may be a bad example longer-term). We hold a listed share that delists and we keep ownership. Now if you're buying ahead of a possible listing you're most likely some form of venture or angel funding - fun, but the majority end in tears and even fewer actually ever get to list. If you've held onto a delisted share it's likely because you think it's a great stock with great potential and this may well be true. Most stocks that are delisted are because they offer such great value that somebody ants to own the entire company not just a slice if it. However unlisted bings its own problems; You have no JSE over sight. All are covered by the companies act but the JSE adds an extra layer of protection. For example director dealings, results within three months etc. Without this you're on your own, and sure you have rights as a shareholder and these rights are enshrined in the Companies Act, Act no. 71 of 2008 (well worth a read). But you'll have to enforce those rights yourself if required and lawyers will likely have to get involved. Often times communications is scant, late or frankly in some cases - never. Again you have rights, but now you need to enforce your rights at a cost. Serious lack of liquidity and price discovery. A lack of an exchange means how do you value the shares and how do you find a buyer when you want to sell them? This lack of liquidity generally means lower valuations as well. Very little or no media exposure and expert opinions on the stock and its prospects. Personally I have never owned an unlisted company (except my own) and I never would. Sure there is potential for great profits, but the truth is most often what you end up with is hassles, legal fees and ultimately losses. 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 The Power Hour from last week by Nerina Visser on ETF fees is awesome and online. What's the net asset value? Net asset value (NAV) is from the balance sheet and is asset less liabilities. The break up value of the company. A share will typically trade above this value as we're buying future profits, not break up value. Tangible NAV (TNAV) is better as this excludes things such as goodwill, so is a real number of actual assets. Goodwill is when you buy a business and pay more than the NAV for the business, rest is goodwill. When things are going well and booming goodwill is not an issue. But when things turn, well it is messy and we've seen lots of goodwill write downs in years past. EOH (JSE code: EOH) states NAV of some R4.5billion. But R3.3billion is goodwill and so not really an asset and with EOH struggling for goodwill right now not really anything to write home about. So TNAV of some R1.1billion meaning EOH trading at more than double NAV while AdaptIT (JSE code: ADI) is trading below TNAV. So all the talk of EOH being below NAV and hence a great value is bogus. Most recently Woolies* (JSE code: WHL) wrote off a third of the cost of the David Jones acquisition. Now when goodwill is written down it hurts profits but the company will tell you this is not an issue as it is a non-cash charge. Correct, but of course it was cash (or script) when you paid for it. As a rule, buying at or even below NAV (or even better TNAV) is a great strategy - except it is fraught with issues. I was all over The Don Group as they traded below TNAV and that TNAV was buildings they owned in places like Sandton and Rosebank. But by the time they were done the TNAV had collapsed. This is a critical point of any for of NAV. How real is it? Who and when was it last valued and can the value be realised? What is the market saying about this TNAV? A stock below TNAV is often the market saying TNAV is under threat, especially if it is cash. ELB Group saw their TNAV collapse even as it was mostly cash, but a disaster of a contract saw them burn cash and now cash has gone and TNAV has collapsed as has the share price. NAV, and especially TNAV is important, but it is not written in stone. So as with all numbers, we need to be careful of it. Discount to NAV/TNAV is not a buying reason. In fact no single metric is ever a reason for buying. We need a preponderance of evidence. https://justonelap.com/finding-long-term-investment-winners/ * I hold ungeared positions. dd Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes 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 A strong start to the year and so far it seems to be continuing (even as the Rand trdes belw R14) - long may it last. Important to remember that Rand strength is not always the end of the world for our market as it signals foreign buying. S&P500 ETFs. Up coming events; 11 April ~ JSE Power Hour: Know your fees with Nerina Visser Fear and loathing on the JSE We're seeing a new trend on the JSE whereby stock prices are slaughtered after poor (or even just modest) results. Sure bad results have always hurt a share price, but it used to be that a 10% down day was a wildly bad day. Now however 10% is hardly even warming up with many stocks being hit way harder (think 30% down on Aspen results). I think there are a bunch reasons for this new trend. Firstly; the Steinhoff (JSE code: SNH) fear. After Steinhoff there is real fear in the market. Fear that a 'great' company may actually be smoke and mirrors and investors have no idea which is the next Steinhoff. So rather then be caught out they just sell, and sell. This fear is real. Steinhoff was generally considered to be a top quality company that we now know to be built on fraud and if an investor missed this - then what else could they miss. Of course many where not convinced by Steinhoff, but the majority who where are truthfully not doubting their own ability so selling is the easy option. This will in time fade. The next bull market will help make investors gunho again believing they can spot the fakes (which history assured us is harder than they think). The second issue is the US effect. For a long time in the US a small miss on results, and I stress the small miss. Not an epic miss, sees stocks getting sold off aggressively and we're now seeing this locally. This is in large part to speed of news distribution coupled with the ease and cheapness of transacting. This trend is likely to remain into the future. A third issue is the understand that few stocks are truly legendary and investor are less forgiving when the business model starts to unravel or dirt starts to show. Here fo example is EOH. It started with some rumours that the company quickly managed but investor where not convinced and just kept on selling. The news got worse and investors carried on selling and the stock is now off almost 90% from its highs of over R180. As investors we need to get used to this trend. Be good sellers (see last weeks podcast) and expect that even quality will disappoint the market at times and that disappointment will hurt. We need to be smart about when the issue is real or when it is just a knee jerk and short-term reaction. But the bottom line is, expect the ride to be bumpier than usual. We need to remember that investing is for the long-term and that long-term is never in a straight line. We also need to remember that any stock can turn out to be trash and if it does we need to sell it regardless of how we feel about it, the loss or the potential. Trash is best trashed. Subscriber to our feed here Subscribe or review us in iTunes 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 Up coming events; 11 April ~ JSE Power Hour: Know your fees with Nerina Visser Selling like a pro We tend to focus on the buying, enteries and selling at profit. But what of selling at a loss? Far to often i hear people state it has fallen too much and so there's no point in selling - this is false. Ignore the loss you already have and focus on the loss ahead of you. A stock that has fallen 90 can fall another 90% and when people ask where's the bottom? The answer is zero, until then it can always fall more. A good sell is as good as a good entry. I exited most of my Calgro M3 (JSE code: CGR) at around 2100c but kept some only to watch it fall to under 1000c. I then finally sold the balance and now it's under 600c. It is never too late to sell and we need to become as good at selling as we are at buying. Sell the dogs (sorry dogs) Know when to panic Subscriber to our feed here Subscribe or review us in iTunes 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 No Brexit deal with 8 days to go. A mess of epic proportions. Load shedding is in full force (well only force 4 with more stages to go) and it's bad. Seems we can expect a 'stable' electrical grid sometime towards the end of the year, albeit stable may still include stage 1 load shedding according to experts I have spoken to. The reasons we know and frankly don't matter. It also doesn't matter who wins on 8 May, this is not a problem that goes away over night. For us individually it s a hassle, a real hassle. For business it is a major issue. Our expected modest GDP growth for 2019 is going to be even more modest while Moodys eyes us for junk status. Most exposed will be retail (extra costs) and property(lost sales and extra costs) while mining has largely managed to get off grid. Metrofile* (JSE code: MFL) results were a horror show with the tax rate hitting 40%, up from 24%. Seems the two now fired CFOs messed up the Kenyan deal so that interest was not deductible as an expense. They out, new CFO will be able to fix and get the tax rate back to normal. Debt should be easy enough to pay off in 5-7 years. That all said it is currently my worst performing share in my portfolio and I continue to hold. Sure the pain has been plentiful, but the business model still stands, some issues (re tax rate) should be easy to fix and I wonder if a take over may not be on the cards? Up coming events; 11 April ~ JSE Power Hour: Know your fees with Nerina Visser * I hold ungeared positions. Avoiding the next Steinhoff Up front let me state you're unlikely to be an investor in individual stocks and over a life time of investing never invest in what turns out to be a fraud. So far I have been lucky in that my only fraud was way back in the mid 90's (I can't even remember the name of the company) when the CEO suddenly rushed off to Australia and my loss was fairly modest (as I was poor), albeit I did make the horrid mistake of doubling up when the price had halved. Back to Steinhoff, the PWC report is finally out. Three thousand pages and four thousand attachments, albeit we only got a ten page summary that detailed over R100billion in fraud over the 2009-2017 period. Profits for this period were only some R60billion and while the fraud number may include some double counting, it basically means Steinhoff (JSE code: SNH) was a ponzi from day one. So how do we avoid being suckered into a ponzi scheme? Avoid the cult of the personality. Far too many people said that they didn't fully understand the business, but were happy to follow (and trust) Markus Jooste. Big mistake. I remember somebody on twitter saying if accounting was an olympic sport Markus Jooste would be a gold medal winner every time. To which I responded that hopefully he wasn't a drug cheat - turns out he was. I am not saying that every great person is a crook, but being great is not an investment case. Sure management is important, but we need more. Other red flags on the cult of personality is when they attack critics. Sell reports on Steinhoff were meet with rage from Markus Jooste and demands that they be retracted and the person involved be fired. Remember the recent Investec report on the Tongaat (JSE code: TON) CEO that got the company all upset and complaining to the Investec bosses? That was in June 2018, the share was over 8000c, now under 2000c. Avoid complexity. As humans we believe in complexity. We think complex is great, complex is best. It's not. In large part we believe in complexity because it is easier to do so. It helps explain why our portfolio growth is modest, why we're not hitting it out of the park with our trading. Truth is luck plays more of a role than complexity (read Fooled by Randomness by Nassim Taleb). The other issue with complexity is that it is easy to hide the fraud and diss naysayers. The reason I avoided Steinhoff is because I couldn't get the balance sheet to balance nor the debt to reconcile to the balance sheet. I am no CA nor a rocket scientist, so I go for the easy and these two should be easy. But I couldn't get them working so I just walked away. (Disclaimer, I did trade Steinhoff a few times, mostly in my momentum portfolio and can't remember if I made money or not). As an aside, I hold a complex stock ~ Discovery (JSE code: DSY) and when Viceroy was threatening to come after a second JSE stock last year, I ran my eye down my list of stocks and figured Discovery was a potential candidate. Point is I hold the stock knowing it is complex. Knowing its accounts are beyond my ability. Knowing that maybe it'll all collapse one day. I have built this understanding into my risk tolerance in that to is the only complex stock I hold and I cap the percentage weighting. Debt, always watch debt especially when paying top dollar for assets, such as the 100% premium offered for Mattress Firm. As Buffett said, debt is like Russian roulette. It's fine until it's not and then it is fatal. Know the debt ratios, watch them a

Simon Shares Group5 (JSE code: GRF) goes into business rescue with "a slim chance for any realisation of value.". It seems the construction of a power station in Ghana was the final nail. Remember the +R1billion they were offered to their Eastern European toll operations? But in the end a lack of liquidity killed them. Be very careful of holding Aveng (JSE code: AEG), if nothing else check the bid/offer, price is heading to 1c. No Brexit deal with 15 days to go. A mess of epic proportions. Back in November 2017 I wrote in FinWeek that we'd get zero fee ETFs and eventually negative fee ETFs (they'll pay you to hold them). It has happened. MoneyWeb is reporting on a US ETF offering to pay investors to buy their ETF. Locally our much smaller market and hence much smaller ETFs means we're a long way from free, but I do think in time it'll happen locally and Satrix40* (JSE CODE: STX40) would probably the one able to do it. Aspen (JSE code: APN) taught us some important important lessons. Debt is fine until it's not and then it can be fatal. Buffett talks about this in his latest shareholders letter. Secondly the market has become a lot more skittish and punishing since Steinhoff (JSE code: SNH). This is not likely to go away any time soon. The answer is simple, watch a companies debt and hold quality, real quality, only. Lastly, all growth stocks mature and that process of maturing is often painful. 5 ways minimalism helps your finances Searching for value the Benjamin Graham Way * I hold ungeared positions. Investment lessons from Boeing We live in wild times made possible by the internet and powerful computers in our pockets. Much of it is good with a fair amount of bad as well (think Twitter trolls), but for large old school companies it can be especially bad. Think Momentum refusing to pay out the life policy. They were correct as per the law and policy wording, but they showed a complete lack of compassion and eventually backed down. Think Vodacom trying to scam us on the ICASA rules for rolling over data with crazy fees. They backed down and from a business profit motive they may have been right but they were a million miles away from the spirit of the law and ICASA may have blocked their fees anyways. Think TigerBrands and their total lack of empathy as they responded with legal speak while South Africans were dying from listeriosis originating at their production facilities. Think Boeing, standing firm after another of their new Boeing 737 Max8 crashed shortly after take off. In the olden pre Internet days Boeing would have been able to control the message with ease and insisted everything was fine, hoping like hell another plane didn't crash and quickly rolling out a software 'update' that may or may not fix the issue (from what I have read the issue is training, not software, here's a long NYT read on it). Boeing have failed to understand the new rules in which businesses operate. Firstly those rules are a lot more ethical. Consumers want to be treated fairly. Hey we always did, but we never really had any power. And that's the second and very important point, consumers now have power. That power comes via the Internet and very quickly a raging anger can over whelm any attempt to manage the message. Now sure often the raging anger is actually just a lynch mob and this is very much the dark downside of the Internet. But the upside is that consumers have power and they'll exercise that power. Sometimes for good and sometimes for bad. A business needs to understand this. I remember attending a presentation on generational theory a decade back where the message was that millennials wanted ethical companies and would pay more to these companies. The flip is that they'll boycott a business they consider to be unethical. Now this is way more than just millennials, the issue is that millennials were given the power to firstly know a companies ethics and secondly do something about it. Companies that are going to survive and thrive in this new world will have fairness and ethics at their core, and that's hard. It's easy to put that into a mission statement, but living it is something else entirely and often a company messes up. For example the news that a company will phase out plastic straws by 2022. Nice, but why so long? Simple because they're trying to protect profits. Fair enough but the ethical demanding consumer doesn't care about your corporate greed, they care about the planet. The even harder issue is how do we manage this as an investor? Truth is we need a crisis to see how a business manages it and that is late in the process. But we can see glimmers of it via other means, such as the plastic straw example mentioned earlier. If a company is not putting the customer and ethics front and center they will eventually be in trouble. Lastly as investor we need to not chase profits at any cost. We need to invest ethically as well, this means fair fees we're charged by providers. It also means exiting dodge

Simon Shares Greenest start to a year since the 1960's, Top40 is 6.9% up year-to-date. MultiChoice (JSE code: MCG) has unbundled out of Naspers (JSE code: NPN) with MultiChoice closing at R106 and Naspers off R125 on the back of Tencent weakness over night in Hong Kong. So no value unlock and with fair values for MutliChoice being between 8500c - R150. Most people I speak to say at current prices if you received MultiChoice shares you should hold them at this price. Also MultiChoice will remain in the Top40 index with Truworths (JSE code: TRU) exits Top40 Friday morning. Those saying MultiChoice is dead, well maybe in time. But nothing is that linear and be careful of taking a dislike for DStv pricing out on the share - they're different beasts. They could get bought by a telco (we're seeing that in the US), they could get the subscriber growth they're targeting in the rest of Africa, Showmax could take off of they could muddle along or they could go broke. Lots of options. Below are the index changes effective at open 1 March 2019. Top40; MCG stays TRU exits Indi25; MCG stays MTH exits Findi30; MCG stays NTC exits Shoprite* (JSE code: SHP) results were not as bad as I expected with operating margin down 1% at 4.4% but much better than I expected and still about twice that of Pick n Pay (JSE code: PIK). Lots went wrong, probably half managements fault (strikes and IT upgrade issues) and half just what happens some times (Angolan hyper inflation and zero food inflation). At current prices the stock is attractive. Interesting is that Wiesse wants to sell his voting control shares that have no economic rights but some 32.3% votes. They've been valued at some R4billion when Star listed but they're hard to value and I'll wait and see what the plan is here. Tomorrow, Friday 1 March, the annual tax-free limit resets. Find the JSE Power Hour video we did here. Great comparison between the locally listed global property ETFs from Sygnia and Core Shares. Up coming events; 7 March ~ JSE Power Hour: Finding value the Benjamin Graham way * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes 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.

Making the CSEW40 SMART The CoreShares Equal Weight Top40 ETF (JSE code: CSEW40) has long been a favourite of mine, but now CoreShares want to change the ETF to a multi factor ETF under the code SMART. Those factors are; Value (portfolios of cheap shares outperform portfolios of expensive shares) Momentum (portfolios of recent share winners continue to win in the near term) Size (portfolios of small companies outperform portfolios of large companies) e.g. Equal weight Quality (portfolios high quality shares outperform poor quality shares) Low Volatility (portfolios of low risk shares outperform high risk shares) I chatted to Chris Rule of CoreShares asking why the changes? What will the new methodology be and what's its attraction? Lastly how will the process work - including voting by existing holders of the ETF. I initially was too thrilled with the changes as I like the equal weight methodology. But one of the key points for me is how many stocks I effectively get exposure to and this is illustrated by the chart below. with a generic Top40 ETF 12 stocks drive returns. In an equal weight Top40 all 40 stocks drive returns. The new SMART ETF will see 41 out of the 52 stock driving the returns. So I end up with a wide diverse ETF which is exactly what I want. Kristia also wrote a blog post on the changes here. Contact Core Shares; [email protected] CoreShares.co.za Twitter.com/CoreShares eee Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes 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 Eskom is "technically insolvent" and load shedding is back, why are we surprised? This was promised us when we had some in December. Bottom line it's a mess, costly to the economy and fixing Eskom is critical and very difficult. Watch the budget next week. EOH woes continue as the stock lost over 20% on Tuesday on the news that Microsoft had cancelled their partnership agreement. In a late SENS the company stated the revenue was not material, but investors have three questions they're asking themselves. 1// Can we trust EOH management ?? 2// How do you get a Microsoft partnership agreement cancelled ?? 3// Why is EOH management always so slow on shareholder communications ?? Curro (JSE code: COH) results are not bad, albeit HEPS +23% with a PE of some 40x is light and the stock is expensive. We are starting to see operational leverage as revenue is +19% and HEPS +23% and a 12c dividend. However debt has jumped almost 20%, but still manageable. Learner numbers increased 12% while Meridian has halved their losses. Woolies* (JSE code: WHL) lose two non-exec board members with immediate effect. Pushed or jumped? Likely the latter. Wilson Bayly (JSE code: WBO) has been one of the very few construction stocks holding it together, until now. A trading update suggests profits 80%-100% lower after making a mess of an Australian contract. Wild and tax-free. Upcoming events; Tax-free investing review, who ate the returns? * I hold ungeared positions. Managed funds Managed funds are when you hand over your hard earned money to a third party to invest or trade on your behalf, supposedly with great returns in offer. Sure it works with the right processes in place, but it mostly carries huge risk. Firstly let me state up front I have never heard of a FX or crypto managed fund making money. They've all been scams with the first indication is that you find them on Facebook offering huge returns. They have zero verifiable track record and zero regulation or audit processes. Most trading managed fund accounts also end in tears. So how do we find a managed fund? Well firstly a unit trust, hedge fund or ETF is a managed fund of sorts with tons or regulations protecting the investor. Why not use these? The issue is usually that we want a managed fund with grand returns, don't we all? But seriously, some questions to ask; Who are you registered with? FSCA as an absolute first port of call. Audited track record. Compliance and dispute process? Fees. Here things get tricky as there is likely a managed fund fee and performance fees. But also transaction fees that can be excessively high. Mandate. What are they transacting in and what are they trying to achieve? Income, growth, derivatives? Withdrawal process. The short answer is that if you want a managed fund, buy a collective investment scheme. No you won't get rich in a hurry, but you'll also likely not get ripped off either. Subscriber to our feed here Subscribe or review us in iTunes 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 A green January with financials the winners but 2019 is going to be a wild ride, especially in the lead up to the elections expected in May. Tax-free year end is end February, don't leave it for the last minute if you want money in this tax year ending 28 February. Budget on 20 February we'll see if we get any changes to the annual limits. Clover (JSE code: CLR) is delisting at 2500c. A great price considering it was around 1500c last year. I held this stock for a number fo years as I considered it to have great promise, but it never delivered on that promised so I exited. I have had some questions around two stocks I own, Santova* (JSE code: SNV) and Metro File (JSE code: MFL). Both are under share price pressure and both finding growth hard (latest results were OK, nothing special). The share price decline is a factor of liquidity and small stock sentiment. Right now if I was two sell my holdings in each the share price would fall about 10%, that is not normal. Add to that some large sellers (certainly in Metro File) and prices are under pressure. I am holding. Not selling as I happy with the companies nor buying because I don't see the prices rerating higher any time soon, if anything likely lower. More in the main body of the show. Wild and tax-free. Upcoming events Tax-free investing review, who ate the returns? * I hold ungeared positions. Where's the liquidity? In the past week I have seen three reports that all point to a drying up of liquidity on the JSE. Now sure some has likely moved to A2X, but not any significant amount. Bottom line liquidity has fallen fairly markedly and this has impacts, most notable on share price movements. So where has it gone? Simple, investors are scared. Scared of elections. Sacred of EWC. Scared of an under pressure consumer. Scared of trades wars. Scared of no returns. Sacred of their shadow? So they are buying less leaving us with fewer buyers and sellers have mostly exited sitting on the sidelines with their cash. This whole vanishing liquidity is markedly more acute in the mid and small cap space and it is hurting the stock prices. Even us small private investors hurt the stock as we exit and many are throwing in the towel and selling, pushing prices lower causing more to throw in the towel and sell. This is typical in late stage bear markets (late stage bull markets see extreme high levels of liquidity). So what do we do? Well we double our research and make sure we really do like the stock, and if we do - we hold. You can buy more but I think we're a long way from the end of the liquidity squeeze on the small and mid cap stocks. If you're wanting to buy into this low liquidity, be careful. Place bids in the market and wait to be hit, even cheeky bids lower down will potentially be hit. But don't expect liquidity to return tomorrow, it may - but it may take a while longer. Further bad news for holders of small stocks is that when liquidity returns it'll come into the large cap Top40 stocks first, then eventually filter down to the mid and small. Point is it will return one day, we just don't know which day. As an aside, this impacts JSE earnings as they make money from data, listings and trades. less trades is less income with a fair fixed cost base. Last important point. Liquidity is NOT an issue with Exchange Traded Funds (ETFs) as they have a market maker. The market maker is (supposed) to be consistently in the market either side of fair value with their bids and offers. So we can always get what we want at close to fair value. Subscriber to our feed here Subscribe or review us in iTunes 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 Retailers, woe is worrid. Aside from Foschini (JSE code; TFG) and Lewis (JSE code: LEW) they have ranged from horrid to truly astoundingly horrid. Shoprite* (JSE code: SHP) has also put out a trading update to follow on from the so-so sales update and aside from some internal issues and Angolan hyperinflation the margins are also crumbling. EOH caught in a SENS from Eskom late on Monday, but took them until Wednesday morning to respond - simple too slow as the stock fell almost 15% on Tuesday. Ellies (JSE code: ELI) was a stock I was watching after they made almost 8c HEPS in the year ending April 2018. But now it seems they swung into a loss for the six months ending October and have a board that is falling apart. Taste (JSE code: TAS) announce they need some R580million and +5 years to at best reach break even? Minimalism: Can you eat it? The perks of being exactly average. Upcoming events Tax-free investing review, who ate the returns? * I hold ungeared positions. Where's Safcoin? So Safcoin finally started trading in December and I thought I'd send a series of follow up questions to the founder, NeilFerreira about how it's all going, promises he'd made and some odd things I was seeing on their trading platform. I sent the questions early Monday asking for reply by Wednesday 10am, and he hasn't responded? Find the questions I was asking this time here. They threatened to sue me here. They answered my first set of questions from August 2018 here. Subscriber to our feed here Subscribe or review us in iTunes 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 The rule of 72 (how long until your money doubles in value). Upcoming events Tax-free investing review, who ate the returns? Know your S12J Simon chats with Dino Zuccollo & Jonti Osher from Westbrooke Alternative Asset Management to really get to understand S12J. The rules, risks, benefits, what to look out for and more. Subscriber to our feed here Subscribe or review us in iTunes 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 Learn to love a lazy market Upcoming events Tax-free investing review, who ate the returns? 2019 predictions show Every year March Ashton, Keith McLachlan and Simon Brown do a predictions show. Three wild and wooly predictions for the markets followed by a call on the Top40 and ZAR. Every show starts with a review of the previous years predictions and you'll find them here. Subscriber to our feed here Subscribe or review us in iTunes 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Somebody capitulated on Metrofile* (JSE code: MFL) this morning. The stocks hit 160c, then 239c and is now 1c up at 220c and I picked up a few on a DY of over 10%. Over R4million has traded so far, so decent volume for this stock. SENS just out is that Sabvest (JSE codes: SBV & SVN) picked up just under half of the volume at 200c - 235c. They already own just over 10%. Ascendis Health (JSE code: ASC) continues to plummet as directors continue to be forced sellers. Just messy. Position your portfolio for 2019. Next show, 17 January 2019. * I hold ungeared positions. End of year portfolio review What was the returns of your different portfolios for 2018? Across the different strategies (trading, equity, ETF etc.). Did you beat your benchmark over 1, 3 and 5 years? Here's how to work out your returns by unitising your portfolios. https://justonelap.com/tracking-performance-unitise-your-portfolio/ This is hugely important because if we're consistently losing against the benchmark frankly we should quit and just buy the benchmark. That said under performing over a year doesn't worry me, it's the three and five years that would worry me deeply. I haven't run my numbers yet, but pretty sure I am red for the year, not sure if I am below Top40 total return (my benchmark). But I have a good run in recent years beating the benchmark thanks to a diverse portfolio and 2018 has been a tough, very tough year. My ETF portfolio doesn't stress me, it only holds broad based ETFs (no niche or sub index ETFs) so it'll do just fine over the long-term. I also use his year end period to do a deep review of the stocks I hold. Naturally I am keeping on eye on results and news during the year. But year end I revisit my research and reasons for buying and check they're still in force and the stocks are the quality I'd hope they'd be when I bought them. This review is not about price so much, if the stock is quality in time the price will follow. What I also do is revisit my entry methodology for price. As I often mention the only thing we as investors really can control is the price we buy at, so we need to exercise that control. I use the 7 year average PE buying when forward PE is below. It is far from perfect but has served me well and kept me from buying over priced stocks, sometimes literally waiting for years and years before I will add a stock. Then of course sometimes it has me buying a stock that just keeps on falling (yes looking at you Woolies* and Famous Brands*). But mostly it keeps me out of over inflated stocks. Subscriber to our feed here Subscribe or review us in iTunes 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Load shedding is back and reports are it's going to be around until maybe 2025 as Eskom needs R200billion. This hurts, we got our of recession yesterday with QonQ GDP growth at 2.2%, but we're going to struggle to grow without electricity. Importantly remember that the majority of the Top40 earnings are from outside of South Africa. So don't confuse the Top40 with the local economy. I missed the return of Pembury (JSE code: PEM) to trading on the JSE. A number of people have asked my view on the stock and it's a simple one. Avoid at all costs. They listed via attempted hype and management have only covered themselves in rubbish since then. Ideas are great but execution is what maters and this team can't execute (heck they can't even get results out in time). NaspersN (JSE code: NPN) results show Multi Choice is not the dead duck everybody claims. Sure some pressure on premium but they are growing subscribers across the continent and the listing next year will offer investors a great niche sector - buying of course is valuation dependent. Important lesson here is ignore the loud mouths on Twitter. Unpacking the Satrix INDI25 ETF, a monster long-term performer. Upcoming events 06 December ~ Position your portfolio for 2019 Everything is falling Over the weekend it looked like we may get trade peace in our time - but the market called Trumps bluff and sold off aggressively on Tuesday evening and we followed on Wednesday. US 10 year T-Bills, which is what I have been watching, also sold off to trade down at 2.92%. This confuses as I was watching this for the bear to start, but only at 3.5%. But it seems it couldn't wait. The trade war with China is hurting and while Trump is saying lots, the evidence on the ground does not support his Tweets and so markets are pricing in worsening trade wars. This will hurt the two largest global economies (USA and China) and the rest of us will suffer as a result. EMs may escape the worst of it, but we're not immune. At the end of the day I do expect some sort of trade peace. This is Trumps style, bully and berate before finally finding a deal (we saw this with NAFTA and Canada / Mexico). But it gets real messy until the final deal. So I expect weaker US markets into the new year, and frankly I expect the major indices to hit bear turf (20% off the highs). This is not a train smash and once the bear has been tagged markets will likely rally, helped with some trade peace. Locally we will not escape the turmoil but our market is much closer to bear turf having tagged it 24 October at 43,822 (Top40). S&P500 is bear at 2,352 (latest close 2,700) and Nasdaq 6,152 (latest close 6,795). So about another 10% down from here. FAANGs are already in bear market as I mentioned last week. This is not the end of the world, market go up and they go down. This sell off is not driven by a financial crisis as we saw in 2008/9, it is being driven by a bullying president and US markets that have gone without a bear in almost ten years (since lows of March 2009). Subscriber to our feed here Subscribe or review us in iTunes 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Taste (JSE code: TAS), nasty results and they're running out of money and still not profitable. I think a delisting is likely. Another Viceroy research report just landed, this time targeting NEPI Rockcastle (JSE code: NRP). The sock is off 14%. Most are decrying Viceroy, but Cy Jacobs, boss at 36One, Tweeted in support of the report. We are still in the process of analyzing the Viceroy Report on Nepi. Our initial view is that the report is compelling as the conclusions drawn appear to be justified. The report echos the concerns we had and continue to have about the entire Resilient Group. — Cy Jacobs (@Cy36ONE) November 28, 2018 Coronation (JSE code: CML) results assets under management (AUM) and hence profits and dividend slip slightly. But on a yield of some 9% and priced cheaper then in a decade relative to AUM - it looks cheap. Pepkor (JSE code: PPH) results. Actually forget the results. The company has been fined R5million (largest JSE fine ever) as they did not disclose in the listing docs that the company had essentially under written the directors share scheme that ended up costing shareholders some R500million. Microsoft (Nasdaq code: MSFT) briefly over takes Apple (Nasdaq code: AAPL) as worlds largest company but neither is trillion US$ as all the FAANG stocks are now in bear market - off 20% from highs. Apple now US$826billion. Upcoming events 06 December ~ Position your portfolio for 2019 Smashed coin Bitcoin / BTC is now trading around US$4,000 and the bubble I was calling it a year ago has popped, spectacularly. Last year I was attacked from all directions when I was calling BTC a bubble, most of it hate filled bile. But here's the thing, I may not be the expert in BTC, but I do know markets and have been around them for a while and seen many a bubble. BTC is just another thing being traded. No different from tulips, stocks or anything else. They ultimately all behave the same. Also being 80% off the highs doesn't mean it doesn't have more downside. I am short (since US$6,400-US$6,700) along side the two I hold in cold storage, and I am not closing my short. BTC and other crypto can go lower, a lot lower. It looks like, for now, it'll settle around the US$4,000 level, but my thinking is next leg will eventually be down. Many are telling me BTC can't go below US$1,000. Maybe, but I wouldn't bet on that. This was a massive bubble that expanded in double quick time and the deflating will takes ages and even ages more to recover. The Nasdaq took some 15 years to get back to the 2000 highs. I am also wondering if the whole idea of the blockchain being so awesome is perhaps a weak idea. We have no large scale real world examples of blockchain being used and the technology is now a decade old. The future for both is blurry at beast. I see the theory on Twitter now is that BTCers must knuckle down, develop technology (what tech I am not sure) and it'll be the next Amazon? And sure you can now pay company taxes in Ohio with BTC. Until, like many others who accepted BTC for a while, that idea gets pulled. BTC was always too volatile to be a used effectively as a method of payment, now even more so. The knuckle down and develop also makes no sense, most dot bomb stocks are no longer in existence. Being a first round technology is great, but that doesn't ensure survival. In fact most often first round tech dies as the future generations of the tech solve the problems that existed in the first generation. For BTC be very careful if buying - there is no rush and any bottom could be a way off. Whatever you do as always only use money you can afford to lose. If you're trading pick your platform very carefully as some may not survive. Haters can email me here or sub tweet me here. I also note that while Safcoin was supposed to launch last week Tuesday with an international (whatever that means) launch this weekend. After asking on Twitter why they haven't launched, they have replaced the entire website with a single page saying now the launch will be 13 December. Frankly even aside from my very strong misgivings I would not want to be launching a crypto currency in this environment. I also note that they're still adding tokens to the system, eight days after the supposed launch and the reason for the delay has been presented as they wanted a better withdrawal system. Colour me skeptical. My view on this crypto remains as it always has. Stay away. Subscriber to our feed here Subscribe or review us in iTunes 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Invicta (JSE code: IVT) HEPS at 2c with the SARS fine costing 187c in HEPS. Wescoal (JSE code: WSL) results knocking it out of the park with a PE and DY both around 4. Yet market hates small caps, so great quality and amazing price- but when / why will it move higher? Start building your list of small caps you like and want to own. But don't start buying just yet, this may take years. The Fat Wallet five concepts that'll make you rich Unpacking the preference share ETF )PREFTX) Upcoming events 06 December ~ Position your portfolio for 2019 Subscriber to our feed here Subscribe or review us in iTunes Structured product ~ Euro Stoxx 50 Gary Booysen & Viv Govender - RandSwiss 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Mid terms, Democrats sweep Congress while Republicans keep the Senate and now things get interesting. Markets will likely ignore this, remember the immediate sell off after Brexit and Trump victories and then the rally. But this removes Trump and the Republicans free hand on taxes etc. while also making it almost impossible to pass big laws as the two sides hate each other. Also Democrats in Congress are going to start digging into Trump from every direction. That said, markets will get over it as the US economy remains strong and profits continue higher. Importantly after the Smoot-Hawley Tariff Act** of the late 1920's trade was removed from Congress and given to the president. (**1928 the tariffs started on wool and sugar and ended up on over 800 products and was mentioned in the movie Ferris Bueller day off) The Fat Wallet Car edition Unpacking the Africa Palladium ETF OUTStanding money with Outvest: Dividends explained Upcoming events 08 November ~ Master Technical Analysis with Moxima Gama 06 December ~ Position your portfolio for 2019 Subscriber to our feed here Subscribe or review us in iTunes The art of losing money If you haven't yet experienced a truly massive loss in the market you're either exclusively in Exchange Traded Funds (ETFs), a newbie or lucky. Because one day it will, and I have spoken about panicking quick and selling dogs. This week the five stages of grief. But first the pain of losing is twice the joy of making. Compare being scammed out of ten bucks vs. finding ten rand on the pavement. You'll remember the former for days, ages afterwards. the latter you'll have forgotten before you even spend the money. The Kübler-Ross model of the five stages of grief. Yes this is around death, but it can work for any loss and so I am using it in terms of a large loss on the markets - typically in one stock (lots of recent examples here). The 5 stages are; denial, anger, bargaining, depression and acceptance. Denial. It's not happening. All will be fine. Fake news. Rotten governments. Nasty passive providers. Over reaction. The diagnosis is mistaken, and we cling to a false, preferable reality. Simple we put our head in the sand and pretend it's not happening. Anger. It seems real and now you're angry. A pile of your hard earned money is gone and somebody needs to be blamed. Never yourself, somebody else. Your broker, that expert on TV, the CEO, a politician. It's not fair. Stomp, stomp, stomp. Bargaining. Still trying to not blame yourself, you start to excuse your actions. How could you know? It will recover, the market has over reacted and things will improve. Everybody got duped. You're trying to excuse your actions, not so much the buying, but the not selling immediately the bad news broke. The news isn't really that bad and it'll recover eventually. Depression. This is bad, real bad and now you hate markets and are never watching BusinessDay TV ever again. Everything is corrupt and rotten. This 'thing' is rigged against the small guy. Acceptance. We all end up here eventually. Things happen, often bad things but this is a natural part of investing. At times we get it wrong, fraud happens, shares collapse. Now we can start looking at ways to prevent this happening again. What price do we pay (the only thing in investing we have control over). A diverse portfolio with lots of passive to reduce the impact of a single stock collapse. Recognise what stage you're at and importantly what can you control. 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Calgro M3* (JSE code: CGR) results a horror. Sure some is due to the new IFRS, but a lot else hurting them right now and I am selling my last remaining shares having sold the bulk in December 2015 at over 2000c. Santova* (JSE code: SNV) results show stronger Rand hurting, but also very tough trading condition locally. I am not selling here. Horror update from Shoprite* (JSE code: SHP). Some due to negative inflation on products, they say "11,607 items in September remaining cheaper than they were a year ago". That hurts as costs rising. But they also had issues in their Gauteng distribution centre that made for stock issues in stores. Famous Brands* (JSE code: FBR) are a two part story. GBK in the UK remains an absolute mess and they're trying to get reductions on leases, an I assume they tried to sell it and failed. Locally they doing alright considering very tough trading conditions. But that UK deal remains a disaster. Naspers (JSE code NPN) closed Tuesday at R2,370 and is now trading Wednesday up almost 8% at R2,555.00. This is in part thanks to Trump saying maybe they could be friends with China and that boosted Tencent. Also MSCI deciding to not make any major changes to index weighting's with the plan being to reduce weight of stocks with low voting shares, such as Naspers share we trade on the JSE. Vivo (JSE code: VVO) trading update confirms that the Engen deal is done, albeit without the Democratic Republic of Congo assets. This expands them into eight new countries and adds 225 service stations. But Morocco remains an issue as we await the Kings announcement on regulating the fuel price. That are seeing margin pressure here and it is the biggest market for the company - so it's important and while I like the business I want this sorted first. IG CFD conversations; exposure and leverage explained Understanding the NewFunds Momentum Equity ETF* OUTStanding money with Outvest: What you get when you save Upcoming events 01 November ~ JSE Power Hour: When does the bear market arrive? 08 November ~ Master Technical Analysis with Moxima Gama * I hold ungeared positions. 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares More delistings. I write about this for next weeks FinWeek. But it is expected and does indicate we're at (or near) a bottom with quality at really cheap valuations. Top40 just holding above 45,000 making us literally a few hundred points away from an official bear market locally. El Niño likelihood now at 70%, bad for food producers and consumers. I have found a website that tracks the likelihood, it Australian but weather don't care for borders. Saudi Arabia oil chief says OPEC in 'produce as much as you can' mode and Brent drops to $76 after peaking at $84 recently. Bad news for Sasol* (JSE code: SOL) but coupled with ZAR at R14.40 potentially good news for consumers. Long4Life* (JSE code: L4L) results, they have cash and cash equivalents of R1.05bn, about 115c a share. Still mostly the old Holdsport business at 60% of revenue and 64% trading profit. Nu-World (JSE code: NWL) results show HEPS +11.5% and dividend +11.9%. Really good results in a very tough economy (helped by a swing in currency translation gains of some R46million). One concern is a bank overdraft of R133million, up from R59million and I always ask why an overdraft and not a formal loan structure? The stock is on a PE of under 5x and a dividend yield of over 6%, staggeringly cheap, but this has always been the case with this stock and the question is what will trigger a rerating higher? MTBPS R27.4bn revenue shortfall for 2018, and a R85bn shortfall in revenue over the next three years. Treasury revised down its growth projection for 2018 from 1.5% to 0.7%, rising to 2.3% in 2021. Debt as a percentage of GDP will continue rising, reaching 59% at the end of 2022, from 50.7% in 2016/17. Three items – white bread flour, cake flour and sanitary pads will be zero VAT rated from next year. "Demolish the walls between public and private sectors." Privatisation? IG CFD conversations Investing in listed property Upcoming events 01 November ~ JSE Power Hour: When does the bear market arrive? 08 November ~ Master Technical Analysis with Moxima Gama * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Correlation is not causation Correlation is when two things are seemingly linked but more important is causation when they really are linked and one leads to another. As humans we live by the mantra of 'what causes what' and this remains very important to our species, but we get it wrong far to often. Some are simple and correct, increasing earnings from a company will in time result in a higher share price. But in the short term all sorts of issues are driving price that most often have nothing to do with the state of the company underlying that share price. Hence stocks get cheap and expensive creating opportunity for investors. But we need to be very careful of linking events that while they seem linked are not linked. A great website Spurious Correlations has many correlations that have no bearing on each other. One example is "people who drowned after falling out of a fishing boat" correlates 95.24% with "marriage rates in Kentucky". Now nobody really believes that in this example one causes the other. We're constantly being bombarded with data and trying to figure out what drives that data and what impact it'll have. Part of the problem here is the 24 hour instant news agenda. Markets move and news needs a reason beyond buyers vs. sellers. So we find a reason, one that seems to fit but may very likely not be true. The point here is two fold; Understand our desire as humans to link one event to another (think of the things we 'see' in the clouds). More often then not the links that we take for granted are weak at best and more likely Spurious. Be very skeptical about supposedly causation. Interrogate the logic and confirm it for yourself, don't just trust what seems right. 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.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares NO show next week (18 Oct 18), I am holidaying. Remember the chart of the Top40 I posted a few weeks back, showing the trading range? We broken the range again, but this time to the downside and we're not almost 15% off the November 2015 highs. Not the end of the world, yet. We do however need to bounce back into that range ASAP. There are now only 5 stocks with YTD gains within Top40: SOL 26%, AGL, 25%, BIL 23%, MND 11%, INL 5% — Andrew Todd (@andrewbtodd) October 10, 2018 Upcoming events 11 October ~ JSE Power Hour: Investing in listed property 18 October ~ JSE Power Hour: Maximising your tax-free investing 01 November ~ JSE Power Hour: When does the bear market arrive? 08 November ~ Mastering technical analysis Subscriber to our feed here Subscribe or review us in iTunes Too small to matter Portfolio construction is way more than just deciding which stocks to buy or sell. It's also valuations, about asset classes and position sizes. The first question is how much of my portfolio should be passive, how much active (your own DIY investing or an active manager) and how much for trading? I always state that passive should be a minimum of 50%, this protects us from the follies of trying to beat the market either ourselves or with a supposed expert. The more we put towards passive the more certainty that we will at least match market return. Now sure we want to get rich quickly so we want to beat the market, trounce it. But the truth is that this is hard with the professional active industry seeing only some 15% of active managers beating our market. Once we know how much (if any) we're putting into active we need to decide how this will work? An active fund manger or DIY or combination of both? How will we select the active manager or fund and how will we measure (and potentially fire) them? What about trading? Geared, ungeared? Equity or indices or FX? Then we need to start deciding what shares we want to own. This process is slow, not only in the selection, but then also in the waiting for the prices that we want to buy at. What is also very important here is how much of the share we should be buying. Any share needs to have a chunky enough size to be material but not so large that it could be catastrophic. I hold 10-12 individual shares within the 40% of my portfolio that is set side for my own active management making each share around 4% of the overall portfolio. With growth some shares may in time become more chunky and then I stop buying and in time may even have to sell down the position to avoid being over exposed. I also need to monitor what's in my passive investments. For example Naspers (JSE code: NPN) is very large in Top40 ETF (except the equal weight ETF from CoreShares) so adding some active Naspers makes you likely over exposed to the stock. But there is another issue, position sizes so small as to be meaningless. I often see a stock sitting at under 1% of a portfolio. Now even if this stock doubles in value it'll only add 1% to the overall portfolio. Yet it is taking as much effort to select, research, read results, valuing and transact as a full size position. So same work but for less reward. These small positions are sometimes dogs that have collapsed and investor is unwilling to sell in the misguided belief that one day it will return to its glory (spoiler alert - it won't, Sell the dogs). But at other times they because of a lack of conviction. You want to own the stock, it seems hot and everybody is talking about it and you're afraid of missing out but you're also afraid of the risks. So you take a small insignificant stake to serve both fears. But investing is about conviction. Either like a stock and give it full weighting or don't buy it. No half measures. Another potential reason for the small fry is legacy. Every portfolio starts small and when starting out we often buy stocks that in years to come we'll look back and wonder why we ever bought them. Yet there they sit, small and insignificant. In all cases small fry must be dealt with. Either increase the position to a meaningful size (waiting for the right valuations) or sell it. Don't keep a stock that has no significance in your portfolio. 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 This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. September was such a rough month that the best performing full equity fund in South Africa returned -0.4% for the month. Not a single full local equity fund was positive. Upcoming events 11 October ~ JSE Power Hour: Investing in listed property 18 October ~ JSE Power Hour: Maximising your tax-free investing 01 November ~ JSE Power Hour: When does the bear market arrive? Small cap pain Small caps, we love them because when they get going - they go. Really go. Ten baggers are a dime a dozen when things are hot and markets are running. But right now - not so much (see chart below) and here's why. Subscriber to our feed here Subscribe or review us in iTunes Firstly small caps are typically very SA Inc focused due to their smallness. Now this is not 100% true as there are stocks with offshore exposure, but generally the statement holds. That being said the economy is struggling, recession, VAT increases, petrol prices etc. are all putting the kosh on the economy and hence SA Inc and smaller stocks. The bad news is that I don't expect this to change any time soon. Make no mistake there are a bunch of high quality small caps at very attractive valuations. Companies that are not going to go bust and in many cases continue to make profits even in these tough times. The problem is that the same can be said of the large Top40 stocks. Sure some dogs in this index, but equally some really great companies at attractive valuations. Forward PE on the Top40 is 13x, cheapest I have seen it in a decade. Yet the selling continues. Further before small caps start to run I'd expect the larger Top40 stocks to run hard, become expensive and then investors start hunting down the list and buying the small cap stocks. So with the large stocks not running we have little chance that small caps will start to run. I hold a few small (and mid) cap stocks, and I continue to hold but I am not running in and buying, even at these levels. I have enough and I don't see them recovering any time soon. [caption id="attachment_8634" align="aligncenter" width="1080"] MidCap weekly close 03Oct18[/caption] 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 This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider.' Alexander Forbes (JSE code: AFH) fires their CEO with zero f***s given. Nigeria making nice to MTN (JSE code: MTN) and Standard Bank (JSE code: SBK). Choppies (JSE code: CHP) snuck a late Friday SENS into the market stating that results would be late (again) and profits at least 20% lower (but no hard details as how much). No surprises that the market did not like and the stock got punished when we opened on Tuesday trading down at 25c. I never liked the stock and have repeatedly suggested investors stay away. Capitec* (JSE code: CPI) results were once again stellar with HEPS +20% and cost-to-income at 38%. The cost-to-income is edging higher, as expected, and was 36% last year. Likely will settle in the mid 40s. Active clients is now 10.5million. Top Broker awards were held on Tuesday evening. In the main category the winner was Standard Bank followed by Rand Swiss and ABSA. All the results will be in this weeks Financial Mail supplement, Investors Monthly. Friday is month and quarter end, so we may see some stock price ramping to make returns look prettier. But it has been a tough quarter for local investors. Wealthy Maths: Calculating cost per use OUTStanding money with Outvest: Long-term saving goals. Upcoming events 11 October ~ JSE Power Hour: Investing in listed property 18 October ~ JSE Power Hour: Maximising your tax-free investing 01 November ~ JSE Power Hour: When does the bear market arrive? * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Are you buying? I post a lot on Twitter, probably too much. Much of it is not opinion, they're just interesting charts or stats, especially of collapsing stocks (not many flying to the moon these days). Almost every time I Tweet about a collapsing stock somebody asks "are you buying?". And the answer is pretty much always no. The one theory is that at the right price any stock is attractive - so a collapsing price may well make an unloved stock worth buying. But I do not agree with that sentiment at all. I only want to own quality, no dogs in my portfolio. So for me it doesn't matter what the price is - I want nothing to do with the stock, in fact I want nothing to do with the vast majority of stocks on the JSE for one reason or another. There are of course exceptions. The few stocks that I do love and will buy more of if the price were to collapse, but that list is small - around twelve at most. There is another point here, FOMO, I have covered this before. The belief is often that a 'great' collapsing stock will rebound with vigour and those 'lucky' enough to have bough at the bottom will find themselves instantly rich. But this seldom happens. Most collapsed stocks remain collapsed for a long time - if not forever. So follow me on Twitter, enjoy the charts and other stuff I post. But don't ask me if I am buying. Likely if I am, I will mention it in the Tweet or you can check my portfolio here. 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 CPI 4.9% vs 5.2%, rates on hold? Naspers (JSE code: NPN) unbundling Multichoice. About R5.5billion profit so market cap some R55billion on 10x PE. That puts them into the Top40. The theory that Multichoice is dead is very misplaced. Aspen (JSE code: APN) gives another update to the market trying to help investors make sense of their results, and the stock is off +9% at just over R170. JSE is looking for feedback "In response to a range of corporate scandals, speculation and innuendo that have characterised South African financial markets over the past year". Details here Cash Club: Start where you are Upcoming events 11 October ~ JSE Power Hour: Investing in listed property Subscriber to our feed here Subscribe or review us in iTunes Managing fallen angels Those once unstoppable high flying stocks that have come back to earth with a thud, now what? We have a lot in our market right now; Aspen (JSE code: APN), Steinhoff (JSE code: SNH), MTN (JSE code: MTN), EOH (JSE code: EOH) and many more. Firstly understand the difference between cyclical and non-cyclical stocks. The former is resources, construction - those sectors that will always experience boom and bust and here we should really be long-term trading them rather then bottom draw investing in them. Secondly is to be careful when buying our high flying, unstoppable non-cyclical stocks. I may love a stock but if it's above my idea of a fair rice I simple won't pay the price. I wait, sometimes waiting years, for prices to be at my levels and then I'll buy. Sometimes like with Richemont* (JSE code: CFR) this works well when I was buying in the 80's some two years back. Other times like Woolies* (JSE code: CFR) I was buying from around 8850c all the way down to 6250c odd and then I stopped as I had full weighting and yet the stock went still lower. So manage the price you pay, you do not want to be the person who paid +R440 for Aspen and if you were ideally you want that to be one of many price points you paid with an overall much lower average price. But that all said these unstoppable angels do sometimes fall from grace, so lets delve into that. The first question is if this is naked fraud or horrid business that we (the market) had missed. With Steinhoff the answer was an easy yes to fraud. With MTN the answer is more complicated but my view at the time of the first Nigerian issues was that this was a massive failure on the part of management and that markedly changed the investment case - so I exited. Woolies the issue is over paying for David Jones and again messing up on women's fashion. Both repairable and not likely to be terminally damaging, albeit most definitely expensive. But what of Aspen? I think that the stock had got well ahead of itself with a PE of almost 40x just two years ago, wildly expensive but supposedly justified by HEPS growth that was around 30% a year. However nothing grows at 30% a year and this is the error I think the market has made. Aspen is maturing, all successful companies mature and when they do they rerate in terms of valuations (PE) but with Aspen the market seems to have been caught by surprise. So in short; Cyclical stocks are for trading. Buying price is very important. Don't overpay and ultimately stagger buying over many years (decades) to ensure a decent average price. Also stagger buying across many stocks, you don't want all your investment concentrated in a few stocks or sectors. Ask if this is as a result of a management error that is not terminal? If yes stay the course and maybe use the sell off to pick up some more - but again be carefull of being way over weight a single stock. Ask yourself if the fall off just a rerating / maturing of the business or as a result of real damage to the company (fraud, horrid management, etc.). Go back and check you initial notes from when you first bought the stock. What's changed and does that change make for a better (albeit different) investment or worse? Lastly, never just shrug and say "how much worse can it get?". It can get a lot worse, Steinhoff offered a +2000c exit last December when the news broke. Now it sub 300c. Last last point. Within a diverse portfolio not everything is always going up - unless it's a stonking bull market. * I hold ungeared positions. 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 Metrofile* (JSE code: MFL) results were a mixed bag with the reduced dividend expected but they are essentially going to almost halve the cover ratio over two years and that is more aggressive than expected. Growth was modest, but the results commentary was even ore modest. Two analysts I know spoke to management and both came away very confident of the stock and its prospects. A lot of talk is about the move to digital and the cloud and firstly Metrofile is well positioned there and secondly I have been hearing about paperless office for over 30 years. ADvTech* (JSE code: ADH) purchase of Monash University looks great but expensive. On a PE of around 39x that is chunky. However will be able to remove a fair bit of costs plugging central services into existing infrastructure the company has. It also gives them degree levels offerings which is a great step and so while not cheap I like the deal. * I hold ungeared positions. Practical trading setups and rules with Petri Redelinghuys Understanding MAPPS growth ETF Moving your RA Subscriber to our feed here Subscribe or review us in iTunes Shares or cash for dividend? Often a company will offer you shares instead of receiving a cash dividend. Assuming you still like the stock (if you don't, then why haven't you sold it?) I always take the shares. The exception could be if I think valuations are crazy and there are other stocks with much better valuations to buy. Then I'll take the cash. By taking shares you save on brokerage, likely very saving but further often times a dividend is not enough to actually reinvest economically. My brokers minimum of R100 brokerage for a trade at 0.5% means that I need to do a R20k trade to get an effective 0.5% brokerage. Sure I can save up the dividends or add them to other cash I may have in the account - but taking the shares is easy and brokerage free. For tax purposes the free shares reduces your base cost price as the new shares come in at zero cost, so you have same total base cost but extra shares effectively meaning average purchase price is now lower. When you sell this new lower base cost will be used for tax purposes. However you'll save a little on tax as DWT is 20% (this is what you would have paid on the dividend) and maximin CGT is 18%. 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 MTN (JSE code: MTN). Woe is MTN, another $2billion for tax evasion. Is it a shake down? Maybe, maybe not. Truthfully we have no idea and it does cover the same period (2007-2015) of their previous Nigerian fine. I long ago sold my MTN shares and no interest in buying more. Steinhoff (JSE code: SNH) ex directors Jooste and La Grange have now both appeared before parliament and both blame everybody but themselves. Nice break out last week on the Top40, and then the retest and now we're back inside the range of 49-52k trading at 51,000 with ZAR at 15.46. Sure some if this is general EM issues but GDP data from Tuesday showing us in a recession is weighting heavy on markets. Where to next? Well let's see if 49k holds. Lots of talk about another drought locally in 2019, experts saying about 60% chance. Going to be rough, especially on food producer stocks (growing and makers). Practical trading setups and rules Tax Tuesday: Medical aid tax deductions OUTstanding money: The inflation monster Upcoming events 06 September ~ JSE Power Hour: Structuring your investment portfolio Subscriber to our feed here Subscribe or review us in iTunes NAV, value or trap? A listener asked about net asset value (NAV). Often when watching I hear a lot of market analyst talk about discounts to Assets, sometimes they say its bad sometimes they say its good. What does it actually mean when they say a share is trading at a discount to its assets or NAV, how is it calculated and is it good or bad? NAV is the break up value of a company. If all assets were turned into cash and all liabilities paid off, what's left? Divided by the number of shares is NAV per share and sometimes called book value. We then relate the NAV or book to the share price and get a ratio between price and NAV often called the price to book (P/B) ratio. Also note the difference between tangible NAV which excludes intangible assets such as brand value and good will. I prefer tangible NAV. As a rule a share trades at a premium to NAV as you're not buying the break up value of a company but the future earnings and cash flow. Different industries will have different premium, banks typically max out at around 2x while retailers at times 3-4x and miners anywhere from below 1 to 10x. A valuation strategy is to consider stocks cheap when their NAV premium is lower than typical for that particular stock and lower than industry peers. Sasfin (JSE code: SFN) is a case in point. NAV is around 4400c and the longer term average is some 1.5x, so seems like a steal. Except the stock has now fallen to around 3400c! Another strategy is to buy below NAV, essentially you're getting future earnings and cash flow for free. But is this value or value trap? Argent (JSE code: ART) has traded at around 50% below NAV forever and a day while The Don Group (now delisted) was at a chunky discount to NAV but that NAV kept melting away and the stock price kept on falling. So a useful indicator but as always needs to be more than just one piece of data when buying a stock. 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.

The SAFcoin saga continues (my initial stay story here and the follow up with legal threats here), I hope this will be the last. Neil Ferreira finally offered to answer my concerns and I sent him a list of 43 questions Sunday afternoon and he returned them on Wednesday, you can find the questions and answers here. The tl;dr version; While SAFcoin did answer a lot of my questions and clear up some issues the key issues remain. So I continue to warn people to stay away. PTXTEN, been a rough, very rough, period for this ETF. Upcoming events 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes 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 Safcoin finally responded to my caution around their 'coin' with a lawyer's letter. You can read our response and see the letter here. One possible correction is the source of the coins. I stated that Neil Ferreira had created them via cryptocoincreator.com and he Tweeted me a link to Etherscan.io for Safcoin. Not sure if that means it wasn't created by cryptocoincreator.com but the new information does suggest there are NOT 222billion coins in supply. The Etherscan.io link shows 10million coins total supply rather than the 5million the website has been promoting, but I see Neil Ferreira updated his white paper on the day of my initial podcast to reflect this new 10million coins in supply (as well as a number of other changes to the white paper). @SimonPB Here is a link for further assurance that we are deploying all token transactions to the Ethereum block and by the time of launch all token purchases will correspond to the token tracker https://t.co/Kg2mRKFOYz— SAFCOIN (@SAFCOIN1) August 3, 2018 Shoprite* (JSE code: SHP) results show a very tough environment hurt by a number of issues. One of these issues is low or negative product which hurts as base costs rise faster than products squeezing margins. But on that point the operating margin remained at 5.5%. The market is hating the CellC and Blue Label (JSE code: BLU) results and the stock is off 8% on Tuesday and another 10% today (Wednesday). Many are saying that it is over done with some 120c of core HEPS making for a PE of around 5x. Maybe it is a bargain but we have also seen bargains become even more so and eventually go bust and CellC certainly wants lots more cash. For me, I do not like telco's so am not interested either way. Is Famous Brands* (JSE code: FBR) looking to exit their Gourmet Burger Kitchen misadventure in the UK? A SENS last week certainly seemed to indicate it and after promising to turn things around a trading update last week suggests it is still losing some R1.5millon a week. Exiting a bad investment is certainly something I support, but I also support people taking responsibility and the current CEO could claim he wasn't he boss when this was done – but he was still a senior exec as COO. So any heads to roll? Truth is it is tricky because then a company may lose one or more high quality senior execs if we roll heads every time something goes wrong. But are they quality if they can err this large? Are there surely not other of equal quality who can replace them? Or is this a one off and something we should forgive them for? Truthfully it is a tricky question, but it needs to be transparently dealt with, not just swept under the carpet. S&P500 has hit it's longest bull market ever. 3,453 days without a 20% correction (since March 9 2009). Understanding the SYGWD – a locally listed ETF making serious returns as apposed to our market. Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio * I hold ungeared positions. Alternative investments We're getting a lot of questions about the Fed Group impact farming offering as well as buying cows as alternative forms of investments. The questions are always if this is a good idea and my answer is generally – why? I think there perhaps are two main reasons. Firstly, novelty. Who doesn't want to own a hive of bees or a slice of a cow (not to be confused with a steak – that you eat). Second is that the local market has delivered zero returns over the last many years so we seek out other ways to generate returns. Now sure, but the real point is where do these sort of investments fit because make no mistake they are alternative investments, or as Kristia would say on The Fat Wallet Show, stuff you buy with your FU money. Alternative investments is that small section of your portfolio (5%? maybe 10% if you wanna be wild) that are outside of traditional investments such as we buy on stock exchanges. In the olden days you'd by gold, carpets, art or wine. Heck for a while in the 80's it was all about buying shipping containers. These days it seems to all be about crypto currencies and now bees. The theory here is that as alternative investments they are not correlated to normal investments so may survive crashes better. But in truth they often crash as much (if not more) as a crash reduces liquidity so the alternatives get sold as people need cash and alternatives being typically less liquid can crash harder. It is also important to understand the risks here. The biggest risk is the newness. These may be backed by real institutions but this is totally new territory for everybody and we're simple not sure how they end up turning out. Further we get all sorts of regulatory protection from listed assets and lastly we are simple not experts on these alternative investments so we have to rely on other 'experts' for guidance. As a last

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares ZAR almost 15.50 early Monday morning on Lira rout. Improve to around 14.10 but now back at 14.60. Chart of the Top40 shows our market been moving sideways since February between 49,000 and 52,000. fairly small range that has made ALSI futures trend trading hard, very hard. [caption id="attachment_8270" align="aligncenter" width="1080"] Top40 going nowhere for last six months[/caption]Tencent (Hong Kong code: 0700) results saw revenue growing ahead of expectations up 39% but profit only up 25% (YoY figures for half year) and Naspers (JSE code: NPN) is off 6.5% (after being down some 10%) and Top40 -2.7%. Esor (JSE code: ESR) goes into business rescue, so now we have two construction stocks in business rescue (Basil Read the other) with some looking very vulnerable and a number of others already gone. This sector remains a horror story. Pembury (JSE code: PEM) finally issue a trading update, months late, and it is a horror show. Stay away, well when it is unsuspended, stay away. Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio When to buy more What are some triggers to buy more of a stock? And how often? I am finding this hard especially once a stock has run a bit. — Daniele Ferreira (@daniele_xyz) August 9, 2018 I run a few portfolios. ETF only, I buy monthly and every March I full up my tax-free and buy in one block. No timing considered. Lazy ETF, weekly charts trading ETFs using technical analysis. Sign up here. Long-term till death do us part portfolio. I use historic PE over last seven years buying when forward PE is below seven year average PE. Details here. Second tier portfolio. This is designed for small and mid cap stocks and this is where I want to focus today. Firstly I find the stock. Quality is important as is growth prospects and I am not looking for 'hot' stocks or sectors. Boring with great potential and low current valuations with a potential holding period of a year to a decade. Using Santova* (JSE code: SNV) as my example. Non-asset based logistics company with their own software based in Durban. Always been very well run as witnessed by results and strong steady growth, both organic and by acquisition. When I fist found it the stock was trading on a PE of around 5x with HEPS for the latest financial year being around 18c (price was 90c) and dividend of 2.5c. I ask myself how easy to double that HEPS in 3-5 years? That requires growth in HEPS of some 15%-25% growth a year. For Santova, very easy. Then I ask what a fair PE should be for this sort of stock? In the case of a logistics company I feel around 13x is fair with wild being 20x. So if HEPS doubles (share price doubles) and PE moves to 13x from current 5x share price goes up another 160%. This takes a 90c stock to around 335c in 3-5 years. Maths all adds up and I buy and wait. Often a very long wait hence I like a dividend to pay me while waiting. HEPS growth comes in and slowly the PE starts to improve and HEPS is 44c for 2018 financial year while PE is now 9.7x and share price is 435c. Do I add more? Well I do the same math again. Can earnings double in next 3-5 years (I think it can, meaning HEPS of 90c). Has PE got space to expand? Yes I still think a 13x PE is fair which targets a share price of some 1170c. Now a few extra thoughts. Firstly a fair PE here is 13x, but a wildly crazy PE is possible and could be 20x (50% of fair target PE). That would add another 50% potential price growth (share then 1755c). But I would only be adding to the position with the current PE well below the fair target (13x) in this case, ideally current PE at least a third below my fair PE, so around 9x. As important is the question about the actual business. Has it delivered? Does it continue to offer great promise? In other words, does the story from when I initially entered remain in force? As the story and price continue to keep playing out I keep on holding and adding. A last point. What will trigger the stock to move and rerate higher? Sure HEPS increases helps but the PE can stay stuck forever and I need both HEPS and PE to increase. hence I especially like stocks that pay a dividend as this pays me while holding and waiting. * I hold ungeared positions. 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.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Fidelity in the US is no offering two of its index funds at zero fee. They do this partly perhaps as a loss leader but also they can generate revenue via script lending. I think we'll see negative fee funds (they'll pay you to hold) in time and even locally in South Africa zero fee funds are possible in time. Local July tractor sales came in at 525 units vs. 508 in July 2017. MTN (JSE code: MTN) results looked bleak. Even if you add all the 'one off issues' back into HEPS it's only 280c. As Ian Stiglingh pointed out on Twitter, we knew it would be a large miss as expectations (consensus) was for a large increase in HEPS and anything above 20% requires a trading update. So no update meant a miss. Apple (NYSE code: AAPL) is now worth $1trillion having listed in 1980 with a $1billion valuation and since then done almost 20% a year annualised return excluding dividends. On a PE of some 18x it is not even expensive compared to others such as Amazon on a PE some 5 times higher. I know Apples and Amazons, not really comparable and Apple has had it's ups and downs along the way. Wealth for three generations in one tax-free account 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio Is it a buy? No it is not. I have been asking and been asked this question for twenty-three years. Way back in the late 90's whenever somebody mentioned a stock on IRC or the email / user groups I belonged to I would ask if it was a buy. Mostly the answer was no, but even when it was yes - I never bought. So I totally understand the question. These days when I Tweet about a stock I get the question and my answer is at best no. Even if it is a stock I am buying my answer would be "I am buying" (and my portfolio is online here). But that does not mean anybody else should be buying. Here's why even shares I am buying are not always for anybody else. What's my risk profile compared to yours? What's my overall portfolio construct compared to yours? Our respective ages and so the list goes on. What's my expectation and valuation compared to yours? But I understand where the question comes from, heck I have asked it often enough of people. The market is frankly large, scary and unknown for everybody, especially a newbie. As a newbie we want some certainty and the 'experts' can in theory give us that certainty. Unless of course it is all those experts telling you to buy Steinhoff before the fraud news broke out into the open, and even then many rated it a buy stating that the assets were worth at least 2500c a share. An important point here, just because a stock has fallen does not mean it is a buy. Again witness Steinhoff. But even with MTN. I don't like the sector or the stock regardless of price, so for me it is never a buy. Of course I could be wrong about the sector and the stock - that's what makes a market, different views. Of course even if the 'expert' says yes buy it, one doesn't rush out and buy because we discover that that does not reduce the fear, the fear of losing money. So here's how to get in as a newbie. Firstly get your tax-free account going. Buy some Exchange Traded Funds (ETFs) and forget about them. Then get some free cash for buying individual shares. Decide on sectors you think will be good investments and start digging around the shares in those sectors. Then when somebody says a stock is great (be it David Shapiro on BusinessDay TV, me on Twitter or whoever), you don't buy, but rather you use this as a trigger to do deeper research into that stock. You're still not buying, but you're learning and you're also building a list of shares worth keeping an eye on. You're tracking their prices and their results - all the while your tax-free portfolio is working away in the background. 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.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Jacques Magliolo and Business Consultants International (BCI). Two people have recently emailed me about this gent and his company specifically about the FSB warning against him and the company in September 2017. One emailer has already lost money the other wanted to know if he should worry about this as he wanted to invest money. Simple answer is always do a Google search before invest and if you find a FSB (or FSCA as they're now called), be very worried and run away. Last week I warned to stay away from Safcoin and offered them the right to reply. I have heard nothing back from them so I assume they happy with what I said? Further Twitter has dug up a lot more making the whole Safcoin even more dodge. Lots of panic about the Tuesday evening statement from President Ramaphosa regarding land restitution without compensation. My advice (and this always holds true). Before checking the screaming Twitter and media headlines read the actual statement and while you're at it also read the ANC statement from the 2017 elective conference at Nasrec. I am getting a lot of questions about impact farming from, specifically the offering from the Fed Group. A few questions in return. Counter party risk is likely very low here, the Fed Group are legit but that doesn't mean the impact can't go bust - just that Fed Group unlikely to run away with your money. Bigger question is why do you want to start investing in alternative investments? The returns are more or less in line with long term JSE returns, but they have to be at a higher risk (less over sight, niche, new etc.). At best this really is for your FU money that you would otherwise use to invest into Whisky and then drink one dark night. Ellies (JSE code: ELI) results show HEPS of some 8c while price is 32c - a historic PE of 4x. They looking good but aren't totally out of the woods and this is a risky punt. Wealthy Maths: How to calculate VAT The Fat Wallet Show - How to buy a house Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules Keep winners. Sell losers From time to time people ask me about their portfolio. In all cases they wanted to sell their winners and keep the losers. I've been there. In the late 90's I was off on a holiday and needing some money figured I'd sell one of the two warrants I held. One was a winner and the other a loser, so I sold the winner. The emotional reason was simple. Sell the winner to lock in the emotional thrill of a winner and keep the loser in the hope it'll become a winner and I won't have to have the emotional hit of a loser. Of course this logic was kinda like marrying your ex. The wining position is what we should be keeping. It is winning which means we're on the right track and the loser is showing us we're wrong and we should get off that track. My trick for selling losers is simple. Sell it, delete it off your watch list and never look at it again. Go so far that if I am talking about it here, jump ahead. If BusinessDay TV talks about it, mute the sound for a few minutes. Just get it out of your life. This we we have no FOMO. 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.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Steinhoff (JSE code: SNH) almost 400c then under 200c. If you're in SNH understand you are trading it, this is not a recovery story. Nothing wrong with trading but rule 1 is stop loss and rule 2 is profit. Don't forget either. Blue Label (JSE code: BLU) back below 900c. I have no idea what the story is here regarding the collapsed share price and neither does anybody I speak to. Results due late August and a trading update in the next week or two. Best is to wait for clarity from the results. Kumba (JSE code: KIO) results show what happens when everything comes together for a single commodity stock - cash flow galore and dividends. They're paying 1451c for the first six months. Sabvest N (JSE code: SVN) is doing a book build for two of their larger investors who want to exit. They are a holding company and the price is a discount to net asset value (NAV) of about 36% when a typical discount would be 15%-20%. This book build should improve liquidity and ideally help close the discount gap, but first have a look at their underlying companies they hold because while a steep discount is nice, they holdings are ultimately what you are buying. OUTStanding Money: Why do I want money? Investing in BBBEE schemes. Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules Safcoin - stay away I first saw them on my Google news feed, a promoted story on IOL. Safcoin, not illegal but going to end in tears. That I guarantee. They're pre-selling 500,000 in an ICO at R70, then there are another 5million. In short the market will be flooded with these coins that have no use and sellers will drive the price to zero. Stay away. Read their white paper and then compare it to the white paper for Ripple or Ethereum. This white paper is just marketing material. Where does the money from the ICO go? A white paper should detail expenses etc. With Safcoin we can only assume that the R35million (500k coins at R70) goes to the founder (Neil Ferreira). What of the other 5million coins? Who holds them? Again I assume Neil Ferreira. What I also don't know is are the initial 500k ICO coins included in the 5million or added on top? How do I mine them? Who is the team behind Safcoin? On Twitter Neil Ferreira said they had a team of 12, but no mention of who this team is and typically one trumpets your team for their expertise. Who are the auditors? On Twitter Neil Ferreira said they were SmartDec Moscow Russia but we have no confirmation of this, have asked them on Twitter, as yet no reply. Coin limit is apparently 5.5million, but when you check the website he used to create them (yip not their own code even though they claim 12 people involved) it says 222billion coins. That's about US$1trillion! Heck out government should start a coin and clear our national debt. Ask you self what problem does this new coin solve? If it is not solving a problem then why will anybody want to buy it? No buyers equals over supply and price crash. Consider the fact that over half of new ICOs fail, and this is a conservative estimate. I have seen stats that suggest less than 10% of ICOs ever get to market. Scams, Scoundrels And Multimillion-Dollar Frauds: How To Check An ICO Isn't A Con They mention they will list on local exchanges. Which? Smarter people then me asked on twitter (with no answers); What mining algorithm does your blockchain use? What is the consensus algorithm used by the project and how was it picked? Where do the tokens fall on the Howey Test? You get paid a 5% referral fee if you send people. Referrals always bother me, they smack of pyramid schemes. As I said up front, not illegal. But before you rush off with your hard earned money, do some homework and 5 minutes on this coins offering and it is not going to make anybody a single cent - except for Neil Ferreira. On listing Neil Ferreira could use his income from ICO sales to be an active buyer pushing the price higher, but this never works for long as eventually one runs out of money and real demand reverts to what it really is - and here it likely is zero. I could go on and on with the issues about this new coin. Short version remains - stay away. Another local crypto scam, this time called Safcoin / 500k offered at R70 = R35m (nice work if you can get it) / After ICO 5m will flood market / No details on how I can mine / Paying referrals (always dodge) / Lots of paid copy (such as link below)https://t.co/PqoZyHyIsq — Simon Brown (@SimonPB) July 24, 2018 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.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares I was at the Mandela Lecture on Tuesday at which Barack Obama spoke. A special day. A truly talented orator and a speech well worth watching. Famous Brands* (JSE code: FBR) CFO quits. Now directors are always quitting, but the CFO when you have indigestion from a over priced UK burger? JSE (JSE code: JSE) trading update is strong. HEPS to be 30%-40% higher. In part thanks to a tax credit, retrenchments from last year kicking in the savings but also they say increased revenue. Rand slowly moving stronger. According to the big mac index, it should be R5.63/US$! A listener asked abut Group 5 (JSE code: GRF). A nasty chart and this after a R1.6bn offer by Greenbay (JSE code: GRP) for their European Toll assets they now have a market cap of some R120million. This suggests the rest of the group is totally bankrupt, which it may be and while it appears to offer great value, this is a globally tough sector I continue to stay well away from. Platinum around $820, lowest price since the post bubble crash in 2008 and before that 2004. Wayne McCurrie says on Twitter there is also the biggest net short position since 1999. This is a horror for the miners and another sector to stay well away from until we see some decent upside price action. Not just a few $ higher, a real sustained looking rally. Cash Club: Forget about the Joneses Make habits not goals We tend to focus on goals. I want to be a millionaire, a billionaire. I want to be a successful trader. I want to invest like Buffett and so on. But we do it wrong forgetting the steps to reaching the goal. These steps are the habits that ensure success. If your goal is to run a marathon, you don't start off one cold morning at the start line for a 42.2km run. You start with getting off your couch and trying a small walk to the other couch. Then maybe a short jog to the bottle store for supplies and so on until one day you do complete a full marathon. The large scary goals are seldom achieved because they are mono focused and overly large. So large in fact that we forget that a goal is actually a series of small steps that taken together get us through the journey. So instead of large scary goals, focus on forming habits. Winning habits that will help us reach the end. Habits that in time will become second nature to us. Focus on the small steps. Improve them. Review your trading and investing, where are you make mistakes? How do you improve and stop the mistakes? Focus on single issues that are holding you back and find ways for you to do them better. Focus on one or two small things until you're a master, then move onto the next one or two areas. You'll never run out of things to improve and you'll always be getting better. Do perfect trades. Become ruthless with stop losses. Only buy quality. And so on. Identify your problems and work to fix them. 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

Download the audio file here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes Simon Shares JSE Direct is ten years old. Started 8 July 2008 on Classic FM. Aton out smartens Aveng (JSE code: AEG) and Murray and Roberts (JSE code: MUR) with a 25.4% in Aveng that can effectively block any special resolutions such as a take over. Alternative if the deal between MUR and AEG goes ahead, Aton will get MUR shares as a AEG shareholder which should ensure they end up with 50% +1 and in complete control at MUR. Torre (JSE code: TOR) is maybe delisting. There will be a shareholder vote and if it passes you'll either get the money or remain a shareholder but in an unlisted company. The later is a horrid idea as liquidity and price discovery is typically zero. I Also think we'll likely see more small cap stocks delisting. What can you do? Vote. There will be a vote by shareholders and you have every right to vote against it and as a delisting requires a special resolution 75% +1 is the required minimum to pass. Organise. Find other small shareholders (easier said than done) and get them to vote against. Talk to management and large shareholders. You may be a small shareholder but you have your rights and potential influence. Fight against interested parties voting. Using above also try and get the price raised. At the end of the day, if you're in the minority you lose. That's how voting works. OUTstanding money: Saving tax-free Upcoming events; Investing in BEE Inside Easy Equity users Easy Equity recently did a user survey with over 6,000 responses and I sat down with Charles Savage (CEO of Purple Group & Easy Equities) to chat around he main findings. 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

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Steinhoff (JSE code: SNH) results = nasty. Aveng (JSE code: AEG) get their money and price falls to 9c. Top40 vs. Rafi. The most tax efficient entities Upcoming events; Investing in BEE Inside the robo advisor Robo advisors are all the rage these days but I wanted to know what's inside the robo so I sat down with Grant Locke, head of OutVest for a geeky understanding about how it all works. SE – 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

Subscriber to our feed here Subscribe or review us in iTunes. Simon Shares Markets have been falling, and the world has not been ending. Long4Life* (JSE code: L4L) has announced a purchase of Rage for R3.915billion with EBITDA of R360million. That's expensive and as they're issuing new shares for much of the payment also a chunky dilution. Management say the deal is not yet a done deal. Steinhoff (JSE code: SNH) results are due on Friday. They may not arrive and if they do they're going to create all sorts of excitement. But don't get sucked in, SNH remains a trading stock and nothing more. Reports I am hearing from VBE is that they consider the company bankrupt, and that's before the billions VBE hope to secure for shareholders. The Tekkie Town sellers continue their fight with Steinhoff Retail Africa (JSE code: SRR) and it's messy and it also suggests that maybe Markus Jooste wasn't the only problem at Steinhoff? BusinessDay is reporting that Christo Wiese has sold another chunk of his Shoprite* (JSE code: SHP) shares. This time via a book build to institutions, not via open market and leaving him with about 14% of the company. OUTstanding money: Getting rich takes time, not money Year-to-date going nowhere Debt in high-income households When to sell long-term investments Upcoming events; Investing in BEE * I hold ungeared positions. Pricing power Some industries have zero pricing power such as the mining industry who are price takers - a horrid space to be as your costs rise and you have zero control over income. Sure you can increase production to try manage income, but that often impacts supply driving prices lower as we see in the platinum industry. Construction also has very little pricing power when building something is now pretty much just a commodity with stiff competition all competing for the same contract with price being the only key difference. Telcos have little real pricing power as data is data so they are trying to make it all about the added extras. I like to invest in industries that can determine their own prices to varying degrees. Luxury cars are priced more on what the market will bear rather then actual cost of manufacturing. This is great for margins and profits but tough to sustain. Luxury jewelry is the same, price is more about status and looks then cost to produce. Burgers for example have pricing power but it is limited by two factors. What the customer can pay and what the other burger seller is charging. But you do have a fair degree of power ~ just be careful of UK gourmet burgers:). Retail also has fair pricing power albeit to different degrees. Luxury certainly has more power than consumer staples, but the later has power in that they are staples. 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

Subscriber to our feed here Subscribe or review us in iTunes. Simon Shares Basil Read (JSE code: BSR) has filed for business rescue and nobody should be surprised. Blaming government and labour is also weak, construction is a weak industry and only really boomed in the lead up to the world cup in 2010 (not forgetting the price fixing). Of concern was that the stock was not suspended until Monday lunch time and it turns out it a settlement issue. Apparently "Someone bought BSR at 1c in on Friday now it turns out the seller does not have the stock. JSE trying to reverse." Liberty (JSE code: LBH) got hacked. Exact details are scarce as I record, the company is saying it was "largely emails and possible attachments" and that no clients have lost money. Well maybe not yet. But you email all sorts of personally stuff to a long-term insurer; bank details, residential address, medical, etc. That frankly puts clients at risk. Bigger picture is that our future unfortunately includes us being hacked sooner or later. PPC (JSE code: PPC) results were not exciting and they have challenges. Local is weak, DRC is having issues already. Not a stock I would want to be holding. I honestly am not sure what the deal is with trade wars. Not in the sense of if Trump is serious or when they'll happen nor to who or what. But if they do happen they are bad - end of story. The Rand is under all sorts of pressure and the hysteria is out in force. So to clear some of it. We're not at risk of an emergency rate hike. This is not because of local protests, land expropriation, it is a general Emerging Market (EM) rout right now. But it is looking ugly for EMs with currencies and markets under pressure as investors flee. Will this get worse, a little or a lot? No idea. So as always here's what we do; as a trader - obey your stops. As an investor - don't panic and buy quality and great prices, but no rush. A question on investment club tax OUTstanding money: What is investing? Tech ETFs by a tech guru Upcoming events; JSE Power Hour: When to sell long-term investments The smart money myth I hear it all the time - the smart money which typically seems to translate into somebody with lots of money. A big trade goes through the market and everybody is talking about smart money? There is no smart money. Money does not talk and having lots of it doesn't make somebody smarter than anybody with less. So why did Christo Wieses money warn him? Also witness Steinhoff (JSE code: SNH). Including preference shares total value was some R300billion now a few million and the smart money all owned it up at the lofty levels. When the story broke Coronation (JSE code: CML) wrote a long letter saying they were holding on as all will be fine. Yet news last week is that they have bailed. They did the same with African Bank (JSE code: bankrupt) Read Fooled by Randomness by Nassim Taleb. We ascribe behaviours to money and people with lots of it that is simple seldom true. There is no smart money, just money. You can of course make smart money decisions and that would include not blindly following anybody. 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 Stor-age (JSE code: SSS) results were totally solid and in a very niche property space that is doing very well. When they listed a few people recommended them to me and I wasn't convinced. Well I was wrong. Sasol* (JSE code: SOL) was one of the first stocks I ever bought and my longest holding in my 'til death do us part' portfolio having first bought it around 1994. A few years ago I gave serious thought to exiting, but held on albeit deciding not to add any more to my portfolio. But I have been thinking and digging and frankly it is a change company and looking good. The Lake Charles project has been a mess in terms of cost over runs, but it is now nearing completion and that means two important points. Firstly, no more spend on the development and secondly in a few years the profits will start to flow from the project (even if they're not as great as promised). So I am starting to buy again, however my usual pricing methodology doesn't work here for two reasons. Massively cyclical always breaks my method and Lake Charles changes things. So asking around the view seems to be that HEPS of some R60 is possible for 2021 and if we apply the average PE of 9.3 that equals a price of R558, so that's my fair value and I am happy to buy at the current R488. Help, I've lost money! OUTstanding Money: Types of savings * I hold ungeared positions. I don't own offshore In the last few weeks a number of people have asked me about what offshore shares I own. The answer is simple, none. I do own a small holding in VOO which I bought in 2002 with some offshore money I earned, but that's it. Here's the thing, I know a lot about the local market and a little about even the smallest shares on the JSE. I have spent literally decades investing and trading on the JSE and hence decades building my knowledge of our market. Further it certainly helps that it is a small market, so it makes life easier and let's not forget that watching and studying the JSE is in part my job. But as soon as I step offshore the size and complexity of the market is frankly over whelming. The NYSE has three times more ETFs then the JSE has stocks. Globally there are some 100,000 stocks. How does one select which are the best of the best? This is more than a full time job, this is a full time job for a full sized team. Chatting to somebody recently they mentioned they wanted to buy Honda. I have no idea if it is a good stock or not. But what of the other US motor companies (Fiat Chrysler, Ford, General Motors, Tesla, Toyota) and then what of those listed in Europe where there are even more listed? Does Japan have any listed? Suddenly you have to be an expert on dozens of motor stocks to decide if the one you want is the out and out global winner. Now I know the response. In the above example we don't have a single motor company we can invest in. Our Tech stocks are frankly wildly boring and disappointing, Naspers (JSE code: NPN) the exception, a lucky exception. Our market is small in more than just number of stocks, it is also small in terms of industries. But we can buy a tech ETF, and yes we can't buy a motor company ETF. But I am comfortable with that because frankly the risk is I buy the wrong motor company anyway. Am I being lazy? Maybe. Or maybe I am being realistic abut my abilities and time available to become an expert. These days I get offshore exposure via dual listed and global companies and locally listed offshore ETFs, keeping it nice and simple. Another issue with offshore is costs, it is a lot cheaper investing offshore then it has ever been for South Africans. But it is still not cheap and with offshore assets you now also need a second will in the country in which those assets are held. More costs and more complexity. Here's a random stat to show how little we know. Google (Alphabet) and Dominos Pizza both listed in 2004. Which has a better return since listing? Two revolutionary companies went public in the summer of 2004. These are their returns... Google (Alphabet): +2,020% Domino's Pizza: +3,607% pic.twitter.com/SOtqOHjM4a — Charlie Bilello (@charliebilello) May 29, 2018

123 Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Simon Shares Wildest story of the year. Imbalie (JSE code: ILE) is ditching beauty to become a miner via a reverse listing! Local GDP for Q1 2018 was a shocker at -2.2%. Expected was -0.5% and the number is usually shifted higher over time, but wowzer. That all said, this was mostly driven by agriculture and frankly turning a country around is a slow process. Delta Properties (JSE code: DLT) has me perplexed. On a dividend yield of around 15% and trading at around 30% discount to net asset value (NAV) it seems a screaming buy - but that assumes the market is wrong and I never want to be the one telling the market that. They mostly have government as a tenant and a lot of their leases are on a month-to-month basis. But government isn't going to suddenly move out but they may put pressure on rent increases. The company says there is a process recently put in place by government to start signing leases and this should reduce the month-to-month leases and lower lending costs. Am I missing a trick or is the market, as always, right? Anthony Clark was at the Curro (JSE code: COH) annual general meeting (AGM) and tweeted that the company said with utilisation of 90% from the current +/-53% HEPS would be around 201c. So we have a marker for future earnings albeit no time line. That said even at 201c HEPS and a current price of 3000c that would put the stock on a PE of around 15x which to my mind is a fair valuation. Curro AGM; titbit. At 53% current capacity utilisation COH made 49cps in FY17. With NO NEW SPEND CEO says if it was at 90% utilisation FY17 earnings would have been 201cps showing how growing into latent built capacity can now power Curro's earnings growth ahead — Small Talk Daily (@SmallTalkDaily) June 4, 2018 OUTstanding money: Choosing between saving and investing Upcoming events; JSE Power Hour: When to sell long-term investments Stale bulls In a recent Fat Wallet podcast Kristia commented again how her investments have done pretty much nothing over the last few years. Now there is only one reason we buy any share, ETF or even derivative - too make money. But what happens if we don't make money or worse the price falls and we're losing money. Now it depends in part what we bought. A derivative trader will stop out and indidiual share buyer may hold as they consider it quality and in time it will start moving while an ETF should in theory not worry about the short term and just continue holding. That's the theory. But we get a phenomenon called stake bulls, especially with individual shares. Lets take Aspen (JSE code: APN) as an example. It hit a price of almost R450 in January 2015 after trading at R100 for the first time just three years earlier and 1000c was hit for the first time in 2003. If you missed the initial run from 2003 you'd have felt aggrieved at missing out and you may have jumped in at R100. But many would have said no they'll wait for the pull back, a pull back that never really happened. Then after a price of almost R450 there is a serious pull back to almost R250 and many jumped in during that pull back. That was followed by another rally but only to R350 and now we're back at R250. So having watched Aspen be one of the best stocks on the JSE you're now holding it and your price is under water. You're not happy and frankly you want shot of the share - but ideally at as small a loss as possible - you're a stale bull. So now every time it rallies the stale bulls are ready to sell essentially capping the price. We see this with a number of local shares and to a lesser degree with ETFs (lesser here as we're too small to really influence an entire index). So what do we do? Firstly, recognise yourself as a stale bull if you are one, set your exit price and act accordingly. The new bulls are not your problem. Secondly, understand that if you are a new bull to a stock there may well be a lot of stake bulls lurking and this will make the rise higher a slow drawn out affair. That's fine, investing is about the long-term and if you hold quality it will in time preform. If you're trading the share understand the going may be slow and sticky as stale bulls keep exiting. Lastly if you're holding ETFs don't stress it. Sure over the last 3-5 years money in the bank has potentially beaten your ETF return. But again this is a long-term game and given time you'll make handsome profits. 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.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. OUTstanding money: Saving and investing are not the same How to be financially independent with Patrick McKay Finding dividend superstars Upcoming events; JSE Power Hour: How to identify quality stocks How to choose a stock broker First off understand the difference between a stock broker and an FSP. The former is an exchange member and gets protection and regulations from the exchange. An FSP is regulated by the FSCA (formerly the FSB) interview with Charles Savage on how this works. It is very important that they are registered with a regulatory body. Even an offshore regulatory body is fine, but only if it is in a country in which you trust the laws. Avoid fly-by-nights registered in some second rate dodge country. Also understand potential fees. Brokerage. What you pay when you transact, also check if there is a minimum brokerage rate. Admin fee charged monthly, quarterly or annually. Some brokers will waive this fee if certain number or value of trades is meet. Live prices / charts. Some brokers give limited live prices and above that you'll pay. Charting package. Many will have a 'lite' version included in admin fee with more advanced at additional cost. Then what services do you want from your broker (using broker as generic term)? No or very few frills. Just buying and selling functionality. No; stop loss facility, live prices, data, detailed research etc. Should be cheapest. Frills for which you will incur higher fees (transaction and admin). Here's you'll likely get limited live prices, limit and @market orders, online charting, event invites, research and share data. This is the space most online brokers sit and the range of fees is wide so shop around. Trading broker. Offering derivatives (CFD, futures & FX), live charts (at an extra fee). These are often stand along brokers but in some cases coupled with traditional online brokers. Full service. This will include 'help' from the broker as to what you're buying selling. Here they'll usually want a large portfolio to make it worth their time. Managed portfolio which the broker manages your portfolio within the mandate you set for them. They have full discretion as to what to buy or sell and again they'll want a large portfolio to make it worth their time. Collective investment such as ETF or unit trust. You buy into the fund and they manage the money within the mandate, active (with different methodologies) or passive (again with different methodologies). Do your research. Google the broker for reviews, check online forums and social media for complaints or praise. Ask others who they use and what they like / dislike about the broker. Take a trail to check out the user interface (if offered). And before you all ask me, I use Standard OST and have done for almost 15 years. Not the cheapest but they meet all my needs. 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.

Subscriber to our feed here Subscribe or review us in iTunes. Simon Shares I am traveling again this week so recording on Monday. Consolidated Infrastructure Group (JSE code: CIL) seems to have a life line albeit existing shareholders will be diluted by some 50%. With the issue at 400c and the share below that price no need to follow your rights, just buy in the open market if you want. Upcoming events; JSE Power Hour: How to profit from SA mining JSE Power Hour: How to identify quality stocks Make trading asymmetrical I have spoken often before about how one of the huge benefits of investing is that a diversified portfolio is asymmetrical. You may have held some horrid share and lost 100% of its value. But 100% is the most you can lose and your winners can exceed 100%. In fact a true long-term portfolio will most definitely have many +100% winners so if you do get caught in a 100% loser - you're fine. The important point is that you need to be diverse and have more than one share and ideally a core of ETFs surrounded by a selection of 10-12 quality shares. Now as a trader of leveraged products such as FX, CFDs or futures your potential loss in any trade can exceed 100%. The warning that loses can exceed your deposits is absolutely true and as such trading is symmetrical. Your winners can be offset by losers and you can end up going nowhere, or truthfully you end up losing money. But a trading portfolio can be asymmetrical, if we have a strict stop loss we adhere to every time. EVERY time. Couple that with the 2% risk rule (never lose more than 2% of your capital in any one trade) and bingo - you have asymmetry in your trading portfolio as well. This is the whole point of trading. We'll have a random dispersement of small losers and winners. A lot of break even trades with the occasional large winner but also the occasional large loser. Without the silent killers of; spread, slippage and costs, that portfolio would go sideways. All we have to do is ensure we NEVER have a large loser and boom, we're making money. This points to the tree critical aspects of trading. Position size (2% rule), stop loss and capital. Capital is important because if you have only a few thousand rands to trade with you cannot do proper position size hence ensuring you'll go broke. 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.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Would you buy it again? Would you buy that share today if you didn't already own it? If not, why not? I'm talking about those dog shares again because we all have them. This week I pose a simple question to solve the problem. Sometimes tech fails. This was one of those weeks, so a short show. 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.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Simon Shares So a friend has a business that has been beset by fraud and is now bankrupt and is trying to find some new investors. They have no financial statements to show you and no real idea how bankrupt the company is or how bad the fraud was. Do you invest? So why scramble for busted JSE stocks? Thanks to Kristia van Heerden for the analogy. Libstar (JSE code: LBR) has listed on the JSE. The listing price was right at the bottom of the range at 1250c and opening trade was around 1200c and expensive. Historic PE is apparently around 26x and sub 20x is the maximum to pay, so 900c - 950c. Personally I am not looking to buy. Long4Life* (JSE code: L4L) publish their first results and pay a dividend. The dividend is odd as they on a buying spree so why pay out cash? R1,7bn cash = about third market cap, HEPS 30c so on non cash market cap = PE of some 12x which is fair (compared to some it frankly deeply cheap). Decent Santova* (JSE code: SNV) trading update, especially considering stronger Rand hurting with majority of earnings from offshore. Back in March Naspers (JSE code NPN) sold US$9.8billion worth on Tencent shares and has now sold its Flipcart stake for US$2.2billion. That's a US$12billion (R150billion) pile of cash. Trader1137 on Twitter suggests maybe they'll use it to buy back some shares, would be about 10% of market cap. The Berkshire Hathaway AGM was on Saturday and the audio is here. Upcoming events; Fat Wallet 100th celebration JSE Power Hour: How to profit from SA mining JSE Power Hour: How to identify quality stocks * I hold ungeared positions. Fight the FOMO Fear of missing out. Man this used to kill me when I started out in markets. It's a true killer as it makes us do irrational things. Pause for a moment, we have say 400 stocks listed on the JSE, your odds of picking the top performer over the next ten years is 0.25%. You're pretty much guaranteed to miss out. Globally 100,000 stocks so 0.001% chance. Thing is hype and higher prices make us scared. Scared we picked the wrong stock. Scared we're missing out of becoming fabulously wealthy. We need the courage of our convictions and perhaps more importantly the courage to be wrong, often. FOMO will make us do stupid things. We'll jump in with no real research. We'll jump in with no exit plan. We'll jump in at far to rich valuations. Forgot about the flyers and focus on your plan. What are you investing for and how long is your investment horizon. Find quality stocks at good prices that meet your requirements. And if you find yourself suffering from FOMO remove yourself from the market (like over a weekend or on a internet free holiday) do solid research on the stock. Find the nay sayers and see what the counter argument is and try construct a real evidence based plan and a price you think is a fair one to pay. There is another angle of FOMO I want to touch on as well. When you're in the stock (or crypto or whatever) and now feel you need to convince everybody else that they're missing out. Sure they may be, but truthfully they may have done their own research and decided it is not for them and you could both be right (different strokes for different folks). Not everything is for everybody. But more importantly is that assets need people to be missing out, that's how they go higher. For example Buffett was very late to Apple (Nasdaq code: AAPL) only building a stake in the last 18 months, a stake that is now over 5% of the company. If he'd bought back in say 2008 or 1998 he would not have been a large buyer over the last 18 months and make no mistake, his large buying, and the news of his stake, has sent the price higher. You need late comers. If everybody is in on day one then who pushes the price higher on day two? Taking it a step further, the market needs disagreement otherwise nothing would happen. So don't hate on people who don't love your investments. See them as potential future price drivers. 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 Apple (Nasdaq code: AAPL) results show a maturing company as iPhone sales have decidedly slow. But they're far from down and out with app store sales, accessories etc. doing great and they still have a monster cash pile. Rand under serious pressure trading out at R12.60/US$ after R11.50/US$ in late February. This is in large part due to US$ strength and it does not make me panic and change my long-term view of Rand strength. Steinhoff (JSE code: SNH) below 200c. In the 6 years to 2018, Barclays (LSE code: BARC) paid out £35.6billion for litigation, misconduct charges, bank levies, losses from asset sales etc. This is £1billion more than operating profit during the period! Pembury (JSE code: PEM) has been suspended for late results as they struggle with some IFRS issues. I like the retirement idea, but the rush to list as a schools company was concerning and the share has been under pressure. Further the inability to publish what must be fairly simple results is more concern. Let them prove themselves before even bothering with the stock. The Mouton family has just bought some R90million of PSG shares, I mentioned in my SA Inc video that they are the best indicator of value in the stock. Six questions to ask before buying an ETF. Foreign dividends. Responsibility of knowledge Knowledge is power but only if you share it. Every year since 2007 I have been a speaker at the annual JSE Schools challenge prize giving in October and a key theme has always been - the responsibility of knowledge. This talk is aimed at school kids but it occurred to me that actually this part of the speech is actually relevant to everybody. Actually all the parts are but they're another podcast for another time. As investors or traders or even if only a novice our knowledge on markets and investing is way more than the vast majority of people and that puts a responsibility on us - we need to share this knowledge. This is less about hot tips, in fact leave the hot tips out of the equation. it is more about helping other people understand the market, ETFs and how it really can create wealth with no rocket science required. Remember the average South African knows nothing about the market and is generally fearful of it and we can help change that and help create smarter and ultimately richer South Africans. Tell them about tax-free. About ETFs, about fees killing returns. Tell them. And even if you think you have no knowledge to share as you're still learning - wrong. You have way more than the average person. So get talking. 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.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Simon Shares Libstar listing is proceeding and I am not taking part. I do think the market will love it but Google the private equity sellers (Abraaj) lots bad happening their and the company has declared a R800million pre listing dividend - while raising R1.5billion? Consol has pulled their JSE listing citing "challenging market conditions". Have the market conditions really changed that much in the last few weeks or was the market just not excited by the listing? Auditing - it's complicated The local auditing profession is having a tough time of it with the Auditor General (Thembekile Makwetu) commenting on The Money Show with Bruce Whitfield he said that that the professions reputation was "in the gutter". I wanted to understand what we as investor really can expect from an auditor? Are they to blame for Steinhoff (JSE code: SNH) and other recent collapses or is that beyond their scope? Keith McLachlan, fund manager at Alpha Wealth, studied as an auditor and is now a fund manager so decided to have a short chat with him to get some perspective. The short chat ended up being a long chat and I suspect we missed a number of angles but one thing did stand out for me, the word "material". 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.

"Brought to you by Absa ETFs" Simon Shares EOH (JSE code: EOH) under pressure again trading at 5 year lows. The company claims it is because of false allegations published on some news website. CPI in March was 3.8%, a great number but April has both VAT and petrol tax increases so we may have seen a low in CPI for a while. Pallinghurst (JSE code: PGL) issue audited results but they use an auditor not accredited by the JSE so they don't count. Mediclinic (JSE code: MEI) issued a solid trading update and the share is responding (they also got upgraded by Barclays over the weekend). I now expect the usual flurry of emails abut how I am missing out by not investing in healthcare stocks. I am indeed, but I am also missing out on the other 450 stocks I do not own. The stock market is no place for FOMO - it'll kill you. Finding winning SA Inc. stocks. Tax-free and saving for your child. Price leads narrative I heard this on a podcast I listen to, or maybe somebody tweeted it. Hugely important. Those commenting on price action (myself included) are always doing so after the fact and most times trying to find a narrative that fits the price move. As humans we believe in order and we have an expectation that things happen for a reason. Now sure prices move for a reason, but there is every chance we're not privy to the reason. The short answer is that prices go up when there are more buyers than sellers, anything beyond that is trying to fit a narrative to a move. As a trader we frankly don't care why they move. We simple wait for our entry and obey our stops. As an investor price only matters when we're buying as this is all we control. Other than that it is results that matter. So the narrative around price is fun, but it is not very useful. We Get Mail Brian Is there a way I can find the names of ETFs that hold Santam? Reino You state that one can open an TFIA account for anybody from day one of birth, but only with an FSP. This TFIA you speak of will it be just an normal account at the bank like a cheque/savings account or will I be able to open one to trade ETF's through for my children? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. 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.

"Brought to you by Absa ETFs" Simon Shares SARS announces tax must be paid on Bitcoin profits - why is anybody surprised? Sagarmatha (JSE code: SGT) listing on Friday, if they tick all the boxes. Some saying they should not be allowed to list but this fails to understand the role the JSE plays. They are regulatory gate keepers, not quality of profitability gate keepers. Steinhoff (JSE code: SNH) now under 300c at 226c, well below late 1998 listing - all-time-low and the bad news just continues to drip out. ETFs and the cost of the spread. Living vs guaranteed annuities. Upcoming events; JSE Power Hour: Investing in the best of SA Inc. Liquidity risk Homechoice (JSE code: HIL) keeps on putting out great results and cash generation but has almost zero liquidity (30 trades since 6 March and currently no offers to sell on market with last trade at 4700c and buyers at 1226c! This makes it uninvestable in my world as we'd essentially be buying into a quasi private equity arrangement as exiting would be almost (absolutely) impossible. But they did announce in the latest results they plan to improve liquidity and I'll keep an eye on this. In the excitement of finding a great share we'll often over look the liquidity issue but I remember getting very badly caught in an illiquid stock way back in the day and while I could have held on I panicked and exited at a nasty loss. Liquidity is not just the spread, which is a cost. But also the amount of volume being traded and we also have to remember that liquidity can disappear very quickly. So two things to look for. What size spread are you having to cross to buy. A 1100c / 1500c is 400c and over 30%. I want spreads as tight as possible and certainly not more than 5% at worse. I want average daily value traded to be at least 30x the size I am buying so even if it dries up I can still get out without too much pain. For traders liquidity even more important an I want spreads less than 1% and value traded 100x my trade size. This is because I want to have no impact when buying or selling (or as small as possible because there is never no impact) and I need the liquidity for very quick and efficient exits. Last important point. Liquidity in terms of volume is not an issue for ETFs as the market maker ensures that they will have a bid and offer either side of fair value at all times. So while the ETF may not be trading it has the capacity to trade in larger volumes if required. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. 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.

If you secretly hate us but haven't been able to find a different source of financial information, I have some great news! I found a Freakonomics Radio episode that summed up exactly the principles we champion on this show. In this episode, Simon and I take the financial literacy survey. It's only three questions, but understanding their answers will enable you to make great financial decisions. If this sounds vaguely familiar, you might be thinking of this podcast we did last year. Here are the questions: Suppose you have R100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? More than R102 Exactly R102 Less than R102 Imagine that the interest rate on your savings account was 5% per year and inflation was 6% per year. After one year, how much would you be able to buy with the money in this account? More than today. Exactly the same as today. Less than today. Do you think the following statement is true or false: buying a single company stock usually provides a safer return than a collective investment scheme like an ETF or unit trust. Win of the week: Rob has been coming to our events for ages. He has some ETF investments, but he's been wanting to trade since the day I met him. This week, he sent this email: Yes I have done my first trade and bought my first bunch of shares (7 shares in total - some bits and bobs) (as oppose to ETFs) I am not sure how I am supposed to feel! Its bit like sex for the first time - did not know what to expect! Frederick My world has been turned upside down! I started listening to your podcast a week or so ago, and fok... my google is broken!! From googling sport all day I now spend endless nights and have sleepless nights on where to put my money and avoid tax as much as possible! I use to think money is money and my RA is perfect and that life is sorted! I was wrong! I have an RA (diversified wealth builder) with Sanlam. Any thoughts here please? My FEES (to my knowledge) is 0.65%. It says "management fee at benchmark %". I put some money in monthly with a 10% annual increase. By retirement I should be paid out R11,5m. Let's say you live another lifetime after your working life, how much will you need? It's possible to retire at 60 and live to 100. https://justonelap.com/podcast-much-money-need/ Frank is trading Simon's Lazy system and wants to know if he can park his money somewhere while he waits for entries. He's not earning interest on the money that he's allocated for this trade. Shamona wants to know if timeshare is worth it. What are the pros and cons? What should I look out for when buying? Entries to win Manage Your Money Like a Fucking Grownup. We want you to share the financial fact that blew your mind. We'll be running this competition for one more week. I asked author Sam Beckbessinger hers and she said on R10k per month, you'll earn R19m in your working life. Mine is that a low cost of living is basically the answer to all your problems. Lesigisha wrote back after we sent him a shout-out last week. Thank you so much for the great affirmation I received from the submission of my email, it really really went a long way in validating what I'm doing. It's hard to start on this journey, but after doing it for a while one does sometimes get despondent and wonder if this is worth it. Your affirmation has helped reinvigorate me and I go back to it every time someone says they're waiting until they have a bigger shoe size before they can start making "real money decisions". Khuliso's mind-blowing fact is that you don't need huge amounts of money to invest. As a result of his mail I spent a lot of time thinking about kotas this morning. The most mind-blowing fact was finding out that if I can afford to buy a kota (R23.00) or street wise 2 I can afford to invest in the JSE and create wealth. Even though it's little money, over the long term it makes a difference. In my case the problem was lack of information rather than a lack of money to invest. I am now very conscious about my spending habits. Whenever I buy takeaways in the back of my mind I keep on thinking of ETFs that I could be buying. When I look back, I see missed opportunities where I could have invested and build wealth. Subscribe to our RSS feed here. Subscribe or rate us in iTunes. Sign up here to receive an email every time a new show goes live.