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Posted: 9 March 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Off-beat

The Johannesburg Stock Exchange invites you to their next Power Hour presentation. These series of presentations will educate you on the principles of investing and the latest issues in the South African economy. 

In their third presentation, Barry Bramley will give an overview on the generational theory - how the Gen-X's want to manage their money and the impact thereof. 

JSE POWER HOUR
DATE: Thursday, 24 March 2011 
TIME: 17h30 – 18h30 
VENUE: Johannesburg Stock Exchange, Auditorium, One Exchange Square, Gwen Lane, Sandown 
PARKING: Across the road at Village Walk 
RSVP: Please respond by Thursday, 17 March 2011 
FURTHER INFORMATION: Takalani Philip Nyelisani on Tel: (011) 520 7127 or takalanin@jse.co.za 

To RSVP please click here


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Posted: 10 March 2011 - 2 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Research

The annual list of the world's richest people is up on Forbes. Carlos Slim stays at the top with $74b and he is pulling away from the rest of the pack with Gates worth $56b at #2 and Buffett with $50b at #3.

#100 on the list has $9b, so now we know what to aim for and  # 1000 has some $1.2b - not to tall an ask?

South Africa doesn't crack the top 100. But there are 4 in the top 1000 (not bad I spose?).

# 136 - Nicky Oppenheimer & family @ $7b
# 219 - Johann Rupert & family @ $4.8b
# 336 - Patrice Motsepe @ $3.3b
# 782 - Christoffel Wiese @ $1.6b

The big country winners (aside from the US with 31) are Russia with 16 and India with 7. Surprising on the downside is Germany 6, France 4 and UK 1!

 

twitter.com/SimonPB

 


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Posted: 8 September 2011 - 3 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Research
I grabbed this screen shot from this morning results presentation from Sanlam.
 
Shows the massive increase in household debt, albeit tapering off in recent times and a lot less bad than some of the emerged economies.
 
Unemployment, still a massively horrid number, but what surprised me is how much better than the early 2000's.
 
alt
 
 

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Posted: 7 August 2011 - 3 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Market news

With the US debt being downgraded to AA from AAA, it really is the end of the world as we know it. Ever since rating agencies starts in the first half of the 1900's the US has had a top notch rating and now it is gone. Something that existed for our entire life time (a triple A rating for the USA) is no more. The world of the USA as the global economic super power is over as that mantle gets handed over to China. Unfortunately the hand over phase is going to be protracted and messy rather than a nice clean ceremonial handover with no fuss or panic.

The deepest irony is that China is now even openly questioning the USA's debt issues!

So now what?
Well firstly the ratings agencies have a tarnished reputation since the crisis of 2008 which they helped fuel by giving junk top ratings - too my mind they played the role of Arthur Anderson in the Enron debacle - but got off largely scot free. In this down grade of the US they actually put the US debt $2trillion higher than it is, but when that was pointed out they commented it didn't change anything. That all said they still rule the roost and may investment firms are only allowed to invest in assets with certain ratings, so I suspects a number of firms who can only buy AAA debt are going to be scrambling come Monday.

Another big issue which Stuart Thompson address's here is what of the risk free rate. Whenever one need a risk free rate the US government bonds was the preferred option - but no more. This has potentially huge options for option prices and the like who now have to rework their numbers with a new risk free rate. And where do they get that new rate from? What is truly risk free in the current environment?

So does this mean the end of the global economy?
In short no. The recovery was always fragile and going to take a long time for full recovery and this is just another point proving just how fragile. Planet earth has massive sovereign debt and hardly any first world growth, that's ugly and means the recovery remains fragile for a while still. As for double dip,  I don't think so but it's certainly not impossible.

So should we panic?
Well no, if you're going to panic, panic early - now is too late. Sure equities are going to get hit hard, but any investor has to have a time line of at least 3-5 years for any investment so while the ride will be wild this is not the end. As for gold, well in the darkest days of 2008 gold did nothing for the simple reason that nobody had money to buy gold and that is likely to play out again in the short term.

So what of Monday?
Well the good news is that the sun will rise but other than that Monday is going to be seriously ugly. The downgrade came out after the US market closed on Friday and while there was a rumour running around before the close markets largely ignored it. Locally Monday could well be +1,000 points down, in fact even 2,000 points is not impossible and if I was a betting man I would suggest closer to 2,000 than 1,000. That makes for around 6% down? So as I said, it is going to be ugly. But as I also said, this is no time to panic.

The big picture is the changing of the guard from the USA to China as earths economic super power was always going to be messy and we now full throttle in that process. Poetically the Chinese curse goes - may you live in interesting times.

It's the end of the world as we know it - released as a single by REM in 1987 (from their album New Adventures in Hi-Fi  actually from Document) reaching a very modest 69 in the US charts and 39 in the UK.

 

twitter.com/SimonPB

simonbrown.co.za


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Posted: 1 April 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Research

So I thought I would look at Capitec price and volume chart to see if there is anything of note. Especially looking to see if we have significantly increasing volume which may have helped push the price higher. In other words institutions getting in on the act in larger volumes and driving the price. Like when a stock transitions from being an undiscovered small cap to larger cap status?

So I got out my trusty excel, pulled out lots of hair and finally worked out the charting function (it was a lot easier in 2003).

Below is the chart, and what does it tell us? Well nothing. Volume has remained pretty much constant. Sure a small uptick in the last 6 months (rights issue maybe?). What we do know is that buyers have been prepared to pay more while sellers have been asking for more, but a significant increase in volume is simple not there.

Of course what is there is significant increase in value traded as the share price has increased, and maybe that would be the better chart - but I know I will see that and maybe my idea is all wrong. Maybe it is value more than volume? In truth volume is meaningless without value?

alt

twitter.com/SimonPB

Simon Brown
 


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Posted: 1 March 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Trading

A quick example of how to use the 2% rule to determine a trade size.


We have a trigger on the Resi20 in our Lazy System (see trade details here), stop loss will be around 56,800 being below the recent low.


Assuming a R100,000 portfolio and a 2% risk we are prepared to risk R2,000 in this trade.


So let's say at 4.30pm today we're entering at 59,280, we subtract the stop from that = 2,480 points at risk. Seeing as we trade the STXRES the price on entry would be 5928c (Satrix trades at a tenth of the index value) and stop value would be 248c (a tenth of 2480 points). So we divide the 248c into the Rand amount we are prepared to risk (R2,000) and we get 806.

 

That's how many STXRES we would buy to have a risk that we're comfortable with and if we get stopped out at max risk we loss R2,000 plus costs.

twitter.com/SimonPB


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Posted: 6 April 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Market news

Who are the largest companies on the JSE? I figure most of us would get the first couple, maybe even 7 or 8 of the top ten. But there are some surprises.

 

For me; Angloplat, Naspers, Vodacom and Firstrand were the surprises. Heck even Anglogold surprised me.

 

And total value of the top 15?

 

R3.912trillion! In US$ that's US$575billion!

 

 

BHPBILL  R608bn

BATS  R565bn

ANGLO  R479bn

SAB  R410bn

MTN GROUP  R260bn

SASOL  R252bn

RICHEMONT  R202bn

ANGLOPLAT  R182bn

STANBANK  R165bn

KUMBA  R155bn

NASPERS-N-  R152bn

ANGGOLD  R126bn

IMPLATS  R125bn

VODACOM  R116bn

FIRSTRAND R115bn

 

 

Simon Brown

twitter.com/SimonPB


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Posted: 6 April 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Market news

Who are the largest companies on the JSE? I figure most of us would get the first couple, maybe even 7 or 8 of the top ten. But there are some surprises.

 

For me; Angloplat, Naspers, Vodacom and Firstrand were the surprises. Heck even Anglogold surprised me.

 

And total value of the top 15?

 

R3.912trillion! In US$ that's US$575billion!

 

 

BHPBILL  R608bn

BATS  R565bn

ANGLO  R479bn

SAB  R410bn

MTN GROUP  R260bn

SASOL  R252bn

RICHEMONT  R202bn

ANGLOPLAT  R182bn

STANBANK  R165bn

KUMBA  R155bn

NASPERS-N-  R152bn

ANGGOLD  R126bn

IMPLATS  R125bn

VODACOM  R116bn

FIRSTRAND R115bn

 

 

Simon Brown

twitter.com/SimonPB


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Posted: 17 May 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Market news

Yesterday at the JSE Standard Bank launched their latest Exchange Traded Note (ETN) ad this time the underlying asset is Africa.

173 countries are in the index covering 23 countries including expected ones such as; Egypt, Nigeria but also some surprises such as Sudan, Niger and others.

South Africa is excluded from the index, so it is Africa ex SA.

Code is SBAEI and it can be bought via your stock broker or directly on ETFSA.co.za and you can find more info on the SB website here.

 

I like, a great way to get overall exposure to Africa, a region I consider to be another China or India, albeit with 53 countries leaving lots of boarders that to my mind make one of the biggest challenges for the continent.

 

SimonBrown

twitter.com/SimonPB
 


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Posted: 13 June 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Market news

Oil winning - no surprise. Silver still #2 even aftrer the collapse? Equities not so grand.

 

alt

 

twitter.com/SimonPB

Simon Brown


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Posted: 28 January 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Off-beat

Finall, almost a year after launching is the USA and other parts of the world the must vaunted Apple iPad is on sale in SA from today at iStores & selected Dion Wireds.

 

The pricing is surpringly good but the question is with some 300 tablets expected to hit the market this year - does one buy this first gen product or does one wait for the Xoom or one of the other second gen products?

 

The bottom end one (16GB wifi only) is R4,399 and the top end (64GB and wifi/3G) is R7,599.

 

More pricing at http://www.core.co.za/secondary.html

 

twitter.com/simonpb


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Posted: 3 January 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

Level 1 (one level bid/offer)
Live data at 7c plus Vat (8c) per hit.
Capped at 800 hits which them attracts a terminal fee of R49 plus vat (R56).

Level 2 (five levels bid/offer)

Live data at 13c plus Vat (15c) hit.
Capped at 800 hits which them attracts a terminal fee of R69 plus vat (R79).

Indices
Live data at 5c plus Vat (6c) per hit.
Capped at 300 hits which them attracts a terminal fee of R16 plus vat (R19).

The cap system has changed from a combined level 1 and 2 into separate cap system.

 

Different data vendors will charge differently, so ask them what the impact (if any) will be - the seperating of level 1 and 2 adds a fairly huge increase.

 

twitter.com/simonpb


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Posted: 19 January 2011 - 4 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

We like to think that we're extra good at noticing things around us and generally paying attention.

 

But we're not - not even close.

 

Check out the video experiement below (from What Makes Them Click)

 

 

Also have a look at This is an awareness test.

 

twitter.com/simonpb


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Posted: 1 February 2011 - 2 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

I like Twitter - I understand it (as opposed to Facebook that still confuses me) and it is a great tool for sourcing information and opinions.

 

With that in mind here's a list of the top 10 local market people on Twitter, it includes broadcasters, brokers, journalists and traders/investors. My immediate thought is that the list (and number of followers) is actually fairly small suggesting that Twitter hasn't as yet taken off in SA as it has in some other countries.

 

Importantly this is not an exhaustive list as I am certain to have missed some (put those missing into the comments) and of course there are some great ones who having joined Twitter more recently aren't yet in the Top 10 (will add them into comments as well). Further some are very quiet on Twitter so not sure if they really belong here and to solve that problem the list is actually 12.

 

What we spot immediately is that the top 3 are all on radio! The power of radio?

 

Bruce Whitfield - 2,759

http://twitter.com/brucebusiness

 

Alec Hogg - 2,436

http://twitter.com/alechogg

 

Lindsay Williams - 2,410

http://twitter.com/LindsayBiz

 

Peter Bruce - 913

http://twitter.com/Bruceps

 

Hilton Tarrant - 740

http://twitter.com/hiltontarrant

 

Paul Theron - 733

http://twitter.com/paul_vestact

 

Marc Ashton - 643

http://twitter.com/zamarcashton

 

Bronwyn Nielsen - 518

http://twitter.com/bronwynnielsen

 

Sasha Naryshkine - 408

http://twitter.com/SashaNaryshkine

 

Simon Brown - 320

http://twitter.com/simonpb

 

Igor Marinkovic - 244

http://twitter.com/ALSITRADER

 

Eleni Giokos - 232

http://twitter.com/EleniGiokos


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Posted: 4 February 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

The JSE is launching a series of events for 2011 called JSE Power Hour. 20 events over the course of the year with Key Note speakers and speakers presenting about the JSE for investing and trading.

 

The first event is Thursday 10 February 2011 and Russell Loubser (JSE CEO) will be the Key Note speaker.

 

DATE: Thursday, 10 February 2011
TIME: 17h30 – 18h30
VENUE: Johannesburg Stock Exchange, Auditorium, One Exchange Square, Gwen Lane, Sandown
PARKING: Across the road at Village Walk
FURTHER INFORMATION: Takalani Philip Nyelisani on Tel: (011) 520 7127 or takalanin@jse.co.za

 

To book go here and keep an eye out for future events.


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Posted: 24 February 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

I spend a fair bit of time in front of people answering questions; presenting, radio, TV and the internet and I am often asked my view on a stock, sector, industry, commodity , etc. I generally am happy to offer my 5c worth with the exception being that sometimes I simple know nothing so am unable to say anything.

Something that has long bothered me is how this fits in with what I own or don't own. In other words am I merely talking my book, front running or some other nasty? Truth is I am not, I merely give my honest view. But that doesn't mean there is a grey area that can become complicated down the line.

So with this in mind I have decided to publish my holding (and the holdings of my wife, sister and her two children as I manage their accounts).

The holding in these portfolios will be published at www.simonbrown.co.za and will be updated as and when needed.

VERY IMPORTANT this has nothing to do with advice and certainly one shouldn't rush off to replicate the portfolio or anything foolish like that, if only because the purchase dates/prices are not disclosed and my risk profile and desired out comes may be vastly different to yours.
 

twitter.com/SimonPB


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Posted: 7 June 2011 - 6 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

Last week I did a webinar at JustOneLap on Dividends: The best part of investing and decided to run some numbers to illustrate.

Below is Standard Bank dividends from 2000 to date, both the individual dividends but more importantly also the cumulative dividend received.

3 January 2000 you could have bought Standard bank at around 2500c and today it is around R100. Nice, a 4 times return. But the other real beautiful part of this investment is the 2875c in tax free dividends you would have received since January 2000.

In other words instead of just a 4 times return on the share price you have received more than the price paid back in dividends effectively giving you a return of some 5 times.

Further the last two years has seen a annual dividend from Standard Bank of 386c, effectively a 15.4% return on your initial investment in each of the last two years.

Far too often we ignore dividends, but they are seriously powerful and must be a part of ones longer term investment strategy.
 

alt

 

SimonBrown

twitter.com/SimonPB

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Posted: 6 January 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Research

The Rand may be moving stronger, but the Oil price in USD is moving higher at an even faster rate - leaving South African's with a rising petrol price.

 

Below is a chart of the last 5 years of petrol prices in SA, using the JHB 95 price.

 

Now if oil does go through $100 (and maybe even $120) as some are suggesting we're certainly going to see R9 again and maybe even R10 (unless the Rand can hit 6 or even 5?)?

 

alt

 

Source: http://www.aa.co.za/content/59/fuel-pricing/

 

twitter.com/simonpb

 


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Posted: 13 January 2011 - 0 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Research

Late last year UCS and BCX announced a deal that the market seems either to have missed in the haze of holidays or they just don't fully understand. Neither sounds plausible - but whatever the case there seems to be an opportunity here.

The deal is simple.

BCX is buying the main assets out of UCS for 101million BCX shares and R30million cash.

USC will be left with their software division that according to Deon Sparrow (deputy CEO of UCS who I interviewed on JSEDirect Tuesday evening - interview here) will have a turnover of some R350m-R400m a year. Further the BCX shares will be distributed to UCS share holders, probably around Q3 2011.

So let's put the pricing together.

  • UCS get 101million BCX shares currently trading at 655c = R661.55million
  • UCS get R30million cash with the deal = R30million
  • At their last reporting period UCS had about R120million cash, some goes with the deal and let's assume they spent some leaving = R20million


That adds up to R711.55million.

Yet UCS market cap is R697million.

Let's round all this smooth and make both values R700million.

So the market is pricing the software part of UCS at zero, the part that is expected to do R350m-R400m turnover!

Now sure there are risks, but then there is never reward without risk.
 

twitter.com/simonpb


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Posted: 25 January 2011 - 2 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]
Category: Research

Keith McLachlan, Senior Equities Analyst at Thebe Securities sent me this chart. It shows the value of small cap stocks being trade relative to mid cap stocks (small cap includes AltX).

 

Now the thinking is that a market recovery starts with the large caps, then moves down the scale to mid caps and then finally to the small caps when the market considers all the large/mid caps to be fully valued. We certainly saw the volume moving into large caps in 2009 and mid caps in 2010 so the theory goes sooner or later it'll be the turn of the small caps.

 

This chart show just that move as mid 2010 saw the relationship between mid and small cap stocks start to swing towards the small caps.

 

 alt

 

You'll find Keith at twitter.com/keithmclachlan

 

twitter.com/simonpb


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