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Welcome to you all.
I am Michael Haldane, Managing Director of Global & Local Investment Advisors.
Imagine a world where Formula 1 Grand Prix’s, International cricket, Premier League Football, the Tour de France, Wimbledon is cancelled! No need to imagine this, this is what has happened!
I hope now that since South Africa is now in “ADVANCED LEVEL 3” of Covid-19 lockdown restrictions you have managed to stock up on beer and have booked a haircut appointment!
The South African Coronavirus continue to climb every day, and everybody seems to have a new theory and cure every day.
Only ASPEN Pharmaceuticals seems to have a sensible drug, and this is Dexmethasone which has apparently been in use for 60 years and can be used to reduce deaths of COVID-19 patients on ventilators.
On Wednesday 24th of June Finance Minister Tito Mboweni delivered a Supplementary Budget Speech in Parliament. This was a sobering speech which probably drove everyone to the bar for a stiff drink when the Minister finished speaking, just to steady the nerves! We think we can expect an increase in taxes in the near future. Let’s brace ourselves it’s going to be a bumpy ride!
Now for Global & Local stuff:
Global & Local staff are all back in the office now, the offices have been sanitised and we are all wearing masks when not seated at our desks. In fact, many desks have been moved around to accommodate for social distancing, now I do not know where anyone sits at the moment!
We have welcomed Tarryn at our Reception who is doing a sterling job checking everyone’s temperature twice a day!
We are here and remain committed to looking after your hard-earned invested capital.
We remain here ready to talk to you about new investments ideas such as our recently launched Scottish Whisky Casks initiative. No! Don’t laugh there is money to be made from booze! Legal money, no bootlegging liquor here! If you have a spare R60,000 or so talk to us about Whisky Casks.
We are as always looking out for better ways to manage your portfolios, so we have been working on some brilliant ideas and initiatives with Allan Gray, these will be announced in the next few weeks.
Now let’s look forward:
We have been very interested in seeing the global markets moving up so fast, led by the US markets.
Interesting thing is if you look at US fund managers many of them are “sitting on their hands” staying out of the market as they are looking forward and predicting bearish markets when companies start reporting financials and the effects on bottom lines of listed companies from COVID becomes evident.
So, who is driving the markets upwards?
We have read a lot of research that suggests that on-line sports gamblers have moved from sports betting to day trading because no professional sport is being played and thus cannot be bet on.
Day trading is where a share trader will trade shares using a cheap on-line platform like Robinhood.com where the trader will buy and sell shares and then close out their positions before the markets close for the day to secure their profits.
Dear viewers let’s be clear these are not finance nerds speculating a little, these are hard line sports gamblers thinking they can make a quick buck on their markets like they make on the Dallas Cowboys vs the San Francisco 49ers. Rumours in the markets suggest these day-traders who used to sports gamblers are driving the market up, the “smart-money” professional investors are simply staying out of the market at the moment.
Markets have come back nicely since the lows at the end of March. But we fear we are not out of the woods as yet. So we are maintaining a risk averse approach at the moment.
But enough Doom and Gloom, let’s look at the funny side of life:
- We think the person who was blowing his Vuvuzela at 19h00 every night during lockdown has blown this instrument so hard he is now in hospital with a burst aneurysm. He has not been heard for a few weeks now.
- Tito Mboweni was overheard speaking to his aides about how the portion of his speech that contained prescribed assets was dropped from the speech at the last minute. The Finance Minister was apparently complaining because his aides had forced him to memorise the speech. Minister Mboweni, maybe they were just playing a joke on you?
- In Europe many countries have opened their beaches for the summer season, but beach goers have to wear a face mask, this is going to cause a number of strange looking tans in Europe this year!
- In Italy the unthinkable has happened. All school pupils other than those writing matric have been promoted to the next grade. The thinking is that these children’s scholastic year was so disrupted that it would be unfair to expect them to write exams. Imagine being a sub matric student and you were simply promoted no matter what your marks say? Wow!
In closing:
- Like we have said, this is a historical period and conditions remain unpredictable.
- But in every period, there are always opportunities. Look at the Chilean company wanting to buy Sun International, what do they see that we don’t?
- This too (like the Italian school children) shall pass, we will make it through this!
- Remain positive, see the funny side!
- If your children are still busy with schooling from home, remember to encourage them to step outside and breathe in fresh air and look at the Horizon. You can do the same and be assured that soon the children will be back at school, no Italian automatic passes here!
Keep washing your hands and moisturise them when you get home from the shops that alcohol-based sanitiser dries out your hands!
Have a beer, now that you can replace it by buying legal booze from the bottle store!
Thank you for watching.
Speak to you soon.