I was very fortunate this Christmas to find under the tree a slim package with my name on the outside and the DVD of Robert’s Birds of SA on the inside. This turns out to be an exceptionally happy marriage of technology and information. The description and drawings of every bird are accompanied by photos, sound recordings and movies. And some clever software enables one to search and sort by every possible characteristic, habitat and habit. Even the notorious lbjs (little brown jobs) are starting to yield to this wonderful resource and the space for my own records is slowly filling up.
But on to serious stuff
I have been trying to act like a proper stockbroker and together with my colleagues have begun to compile a list of what we think should be hot this year. The key question is, as always, the currency. We agreed that while it ought to weaken, in fact we have no idea when it could do so and therefore chose to assume it will maintain its current relative stability. With that out of the way, we reached the surprising conclusion that the market as a whole is not greatly overvalued and that there may be some shares worth taking a look at. Of course if the dollar strengthens appreciably against our poor runt then you just have to shut your eyes pile into the resources. One simple way of doing this is to buy the New Rand ETF (exchange traded fund). Or even Metorex.
Naturally the main thing is to avoid ideas that end up destroying value. This is broker-speak for “don’t buy shares that go down”. When this happens most people face the possibility of making a loss. However, for one investor who was quoted in the paper this week, it merely “slows down some of our strategies”. Isn’t it wonderful what jargon can do? But even the best jargon can’t compete with a presidential pardon that removes all record of past crimes. This Alan Boesak affair is a pretty shabby one that does nothing for this country’s reputation. But at least we are miles better than Argentina, who were surprised when their foreign bond holders got upset with an offer of just 30 cents in the dollar. Now that’s destroying value!
There was certainly no shortage of things to write about this week. Did you notice the Joburg city notice calling for tenders to provide Metro Police with training in customer care? There are at least three topics in that piece of nonsense alone. As you see I certainly chose not to start with any cricketing remarks and, thanks to some pretty heavy rain over in Pretoria today, I shall not be ending with it either.
For those of you who read all the way to the end, hoping for the above-mentioned ideas, I can tell you that my own picks were headed by Nampak, African Life, Telkom and RMB Holdings. In the month-end newsletter that will accompany the statements and portfolios I shall be discussing a longer list gleaned from the whole firm.
So if you, like me, have not been invited to join the great and good at the economic talkfest at Davos this weekend, I hope that the sun will come out and at least we will be a lot warmer than the folks who have.
And there’s golf and tennis on too.
James Greener
21st January 2005
