Has Trump Shown us how Tariffs Resolve?

🎯 Tariff Talks: Where Are We Now?

Simon Brown recaps the evolution of Trump-era tariffs, with recent developments around:

• US-China deal: effective 54% tariff on Chinese goods, 10% on US goods

• UK, Mexico, Canada, Vietnam likely settling around 10%

• Expectations for other regions like EU, Saudi Arabia, South Africa

• Conclusion: tariff escalation seems contained, reducing recession risks

Key Insight: Markets are stabilising as the worst-case tariff scenario is dialed back.

💊 Trump vs. Big Pharma

Trump targets high drug prices in the US, pushing for:

• 30-day deadline for pharmaceutical companies to lower prices

• Unclear legal basis; possible price controls debated

• Pharma stocks bounce back slightly after initial drop

Simon's Take: Healthcare is risky for investors due to constant regulatory pressure — he stays away.

💡 Lewis Group: Surprise Trading Update

Lewis expects a 55–65% EPS increase, sparking:

• A ~16% stock price surge

• Ongoing share buybacks and high dividends (7.8% yield)

• Strategy: loan book expansion, carefully managing bad debts

Verdict: Strong fundamentals, still looks cheap. Simon and analysts are bullish. 📈

🛒 Boxer's Debut Results

First results since Boxer listed:

• Modest headline earnings (new shares diluted results)

• 25 new superstores & 35 liquor stores planned annually

• Operating margins on par with Shoprite* (~5.5%)

• Stock trading at fair valuation (R64.77), analysts' target: R76.66

Insight: Promising growth but priced in. Shoprite still Simon's preferred pick. 🏪

🏅 AngloGold Ashanti*: Cash Flow Soars

Highlights from AngloGold's trading update:

• 7x increase in free cash flow

• New dividend policy: $0.125 quarterly minimum + 50% of FCF

• 26% production increase (aided by Egypt acquisition)

• Concerns: strong rand + weak gold price pressure the stock

Simon's Position: Holds the stock, likes the dividends — cautious on expansion. 🪙

🏘️ Calgro M3 vs. Balwin

Property sector comparison:

• Calgro M3*: Sub-R1m homes, shifting from gov't subsidies to open market

• Balwin: Mid-to-high-end units (R1.1m–R3m+), annuity income from parks & amenities

• Both cautious due to election risks and past invasions

Bottom Line: Simon owns Calgro, likes both for their contributions to housing. 🏡

Simon Brown

* I hold ungeared positions.

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