The National Ports Authority is this morning calling for tenders to supply “fog signalling equipment” for East London. Several things come to mind. What is East London doing now to warn ships that they are closer than they think? Just how many suppliers of fog horns are there in SA? Is it a business worth getting into? Thanks to many years on the bond trading floor my voice is able to make its presence felt when the occasion arises. As an interim measure I don’t suppose the NPA would like me to stand at the end of the East London pier and yell? On sunny days I could fish.
The cold efficiency of screen dealing has no need for loud voices. The only time we shout these days is to encourage the blinking fluorescent numbers on the monitor to move in our desired direction. However, it doesn’t always seem to work. Just as my forecasts don’t always work. You will have noticed that Governor Mboweni ignored my advice and followed the “11 out of 12” economists who felt that there would be no change in interest rates. Naturally this disappointing failure to reduce the price of money has been taken as good news by the bulls (in fact any news is good news to the current breed of bull) and market indices have continued their seemingly unstoppable journey northwards. This just makes us bears shout even more loudly at the screens.
A few months ago a potential client chose not to open a broking account when I told her that in the absence of our own investment research from Watermark, I could provide her with any opinion she desired. I am not sure whether she disapproved of the implication that I could tailor my own views to suit hers. Actually, the point I was trying to make was that the Internet has now turned information into a commodity. Within minutes of an analyst pressing “SEND” to distribute his hard work to his selected client list, that same report disappears into cyberspace. I am sure that if I took the trouble to read all the research that appears in my inbox that I could find opposing opinions provided by respected rated analysts on any stock.
Investment and broking is only one of many businesses trying to learn to live with the new world of free distribution and transparent pricing. Watch how the entertainment “celebrities” are wrestling with the same problem. Most of their product, for which they have been handsomely (over)paid for more than a century, is now instantly digitised and distributed to cries of “theft and piracy” Aside from giving the police an excuse to keep away from more dangerous crimes while they hunt down DVD pirates, this process is inevitable. Eventually the price of the original material will fall until “piracy” becomes not worthwhile and all the links in the entertainment business chain will have to learn to live on less. One by one the professions will succumb to the internet until only plumbers and sportsmen will be able to command big bucks!
The internet allows one to sample numerous and diverse opinions on just about any investment topic. This fuels my existing scepticism that it is possible to forecast the future – particularly in areas of human endeavour, of which the stock market is a perfect example. This is not to deny that many analysts have deep and excellent understanding of the industries and companies that they cover. It is just to state that I don’t believe that equips them any better to forecast next year’s earnings, dividend or share price. Disappointing isn’t it?
James Greener
The Glorious Twelfth of August (unless you are a grouse)
