All it needed was for some dealer to miss key the price of one of the big shares by a few cents this morning and the All Share would have cleared 33 000. It now looks as if we shall need to wait for a new week before that barrier is breached, although the gold price is all perky again and the resources shares never lie down until the closing auction finishes at 5 pm. This bull is determined to demonstrate that he is fit, healthy and strong. Companies, on the other hand, while reasonably fit and moderately healthy are certainly not as strong as they were last year. The terms of the equation are not surprising. Pretty well anyone labouring in the formal markets where invoices are prepared and bank accounts reconciled is aware that customers are fewer and have become more picky as the prices of all commodities including money have risen.
It is less clear that there is a similar slowdown in the informal cash economy. I watched in awe at the municipal offices yesterday as the person ahead of me settled an R18 000 electricity account with a huge bundle of grubby R100 notes encased in a cocoon of rubber bands. In our business which is closely regulated by the JSE and the FSB, we are understandably and correctly forbidden from accepting cash payments for even a tenth of that amount. Surely, a local authority treasury should equally be obliged to reject such obviously dirty money. The teller accepting this payment was busy for quite a long time and the queues became long and testy.
Minister Erwin’s latest outburst of socialist idiocy had me shooting another email off to SARS asking to be taken off their mailing list. Comrade Alec feels that it is the tax payer’s duty to fund the state to start and run businesses that the private sector will not. He refuses to grasp the simple fact that private entrepreneurs will eagerly and gladly operate any enterprise that makes sufficient money to pay its way with a bit left over for boring stuff like electricity bills. If there is no one already filling those business niches then you can be certain that they are not profitable and you can be even more certain that any government’s attempt to fill them will be a calamity. It is obvious, to me anyway, that there currently is no sustainable demand for all those goods and services he thinks he would like the government to supply.
What idiot in the Joburg city council places an advertisement calling for ideas on City Improvement Districts when that same paper is filled with pictures and stories of violence and hatred which is currently tragically consuming at least one district in this so-called world class African city. Please send the whole council department responsible for this program to join those incredibly brave policemen trying to restore order and calm. Oh, yes and reduce their pay to police levels too please.
During two long car journeys this week I tried to work out from first principles just what the ideal broker’s letter should contain. It is very simple really. An investor requires nothing more than an accurate forecast of share price movements. Pages of economic, financial and business analysis would add no value compared to that list of price changes. In tacit recognition of the impossibility of compiling such a list, however, broker’s reports usually try to avoid making outright predictions and bury the author’s opinions and views in words and phrases which approach total ambiguity. The bald truth is that the broker merely requires an order. Even if, as is often the case, it goes against the report recommendation it matters little and often provides a welcome opposite trade. After 1200km I could still see no way to change Tidemarks.
So I therefore forecast a Lions win over the Stormers tomorrow.
James Greener
16th May 2008
