When something happens or more difficultly when it doesn’t happen in
the markets, a reason has to found, presented and discussed. This week’s big
downward correction by many prices on the JSE was laid at the door of the US
Federal Reserve who, it is feared, may be thinking about doing something.
Whatever that may be, there it raises the possibility that companies in SA will
make less money than they currently are
able to and so clever folk are selling their shares (to less clever people). It is the tenuous logic of this reasoning –
which equally uses the same excuses for upticks – that makes the short term
trading of shares for a living so exciting and terrifying.
Investors, on the other hand are happy merely to increase their
holdings in well managed companies during periods of good relative value. Incidentally
not even this large correction has yet created such a period. Selling is largely unnecessary unless it
turns out that one’s choice of a company was poor. Large-scale selling to avoid
those generational and substantial collapses in the market is very difficult. Analysts
who call those moments are more frequently roasted than remembered.
Considerable excitement accompanied the news that the consumer
inflation rate released this week and based on a new re-weighted basket, was
down from the previous month. What it actually means is that some sheltered
number-crunchers in the employ of government have been able to construct a
basket of consumer goodies, totally unlike any that you and I would recognise,
in which the prices are not going up quite as fast as before. I suppose that a
detailed study of the methodology would explain why the official inflation
appears to be less sensitive to the terrifying increases in many areas that
most of us are experiencing. It does
probably mean, however, that borrowers will enjoy the current low interest
rates for a while further. Savers will suffer.
Dr Ramphele reportedly deserves respect for the very many high
powered posts that she has held (but apparently not filled for very long).
Unfortunately her choice of an ethnic headdress that sported Goofy-like ears
detracted quite a lot from the gravitas of her announcement of the formation of
a new opposition group in SA. Naming the new party A gang was rather smart
though, as it our collective noun of choice for politicians.
Nestling alongside the Joburg city council request for businesses
interested in fixing the city’s weighbridges is the far more important
invitation for people to provide banqueting for the Office of the Speaker. That
word, banqueting, should set off the alarm bells for the ratepayers. Yet again,
reports are emerging about the dysfunctional morass into which Joburg’s record
keeping has slipped. Like probably many readers I am awaiting a refund from the
city but have been told that as all records previously delivered in the
prescribed manner are now lost, only a visit in person will suffice. I don’t think
I shall try that one. Fortunately the sum is not large and will amount to no
more than a glass or two of wine at the next banquet. Very good wine,
naturally.
So the Super 15 rugby tournament gets going in SA this weekend and
120 matches – not including the play-offs – loom ahead for dedicated fans. Each
of the teams has to play half of their scheduled 16 matches away from home with
half again being played in another country very far away. It is puzzling that
SAA can’t make a decent business out of all that demand for seats. Sadly they
seem to be mired in yet another squabble about who will be next to exit their
post with an outrageous payoff for flying the national airline into the ground.
The rumour is that the new logo about to appear on the aircraft tail planes is
an executive revolving door.
James Greener
22nd February 2013
