This week will be remembered by anyone who tried to trade the market
as pretty testing. There were some amazing inter-day moves which were capable
of making just about any trade look unwise within a few hours. The All Share
has now abandoned its 4 month long flirtation with the 34 000 level and may be setting
up a similar tryst with 33 000. That would still make it 1000 points above the 1st
January level and so we cant yet label this year as a bear market. Nevertheless
most shares need to fall a lot more before reaching levels that historic
comparison would suggest is value.
But even the most confident and experienced investor must be having
great pangs of doubt deep down inside. Just what is going on? Is anyone or any
region or any business actually getting richer? Well certainly Mr Zuckerberg and
his fellow Facebook founders have become a great deal richer now that his
company looks as if it will be valued
around $100bn. In good old South African parlance that is “a groot klomp geld”
for what is really just a computer program that a billion people use for free.
Mr Zuckerberg’s claim that his product is a force for good in the world stuck me
as a tad sanctimonious. Particularly, as one of his partners has swiftly
changed nationality in order to avoid the US taxes on his windfall profits.
Undoubtedly the valuation of that company is nearly impossible to justify but
the irrationality of crowds seems to be at work and enormous wealth has been
created. I do however share the view that the lucky ones who receive shares
ahead of the listing should convert most of them into folding money sooner
rather than later.
It really was quite unnecessary for our Pres to point out that his
government is not paying its bills timeously. Far better if he had spent the
time knocking heads together in his administration and get them to do their
jobs. The difficulty is that many of us suspect that the bills don’t get paid
because the money has gone missing and not just because the clerk can’t find
the cheque book and a pen.
The half-page full colour advertisement in all the papers yesterday
was published rather too late. It appeared only on the first of several days of
festivities to be held by the Department of Communication to celebrate World
Telecommunications and Information Society Day. It seems that we may all have
been expected to share in the joy of the event with the Deputy Minister of
Communications who has been dispatched to somewhere called Gadiboe to preside over a slew of charitable works and
tree planting. Now these are admirable things to do to mark this important date
in the calendar but one cant but think that proving shady glades for the future
should rank behind improving the nation’s access to effective and cheap
broadband.
The people at Barclays Bank in London
must have put in a call to the fellows at Wal-Mart to compare notes about doing
business in SA. Both of them have been told by Pretoria bureaucrats and politicians just how
many staff members they need in their South African operations and to rehire
any that they might foolishly have recently fired. It will be interesting to
watch what happens when Telkom’s new Chinese partner suggests that the payroll
is a tad bloated. The age old trick of not understanding the language may be
used. A version of this was used by the boss man of SAA who claimed that the
R6bn that the taxpayer has given him is not a “bail-out” but something much
prettier. Tell you what. Give it back and let’s see if you sink.
The trader at JP Morgan bank
responsible for obliterating $2bn of the bank’s money was known by everyone
across the City as The London Whale on account of the size of his positions.
That alone ought to have rung a few alarm bells in the executive suite. Someone
was definitely not paying attention.
Unlike Sharks supporters in Bloemfontein
this weekend.
James Greener
18th May 2012
