You're listening to Strictly Business Podcast
with Lindsay Williams.
The JSC has closed its doors for another day,
so it's time for the 5 o'clock shadow.
And as always on a Thursday,
it's the Doubleheader Dream Team Edition with Viv Govender from
RAND Swiss and David Shapira from SAS for
Insecurities, both in Johannesburg.
Now, Viv,
last week we started with David and he was
describing the NVIDIA results.
And this week we're starting with you and you're going to describe
two things.
One, the sell-off.
of which nvidia was a part and then
secondly the doj which stuck its
all in even after the the share price had
had a bit of a shocker let's let's start
with the sell-off first what did you make of it all
yeah i mean it's it was in dollar terms being the biggest
sell-off ever uh i think there's less than 30
companies listed in the world that have a higher
market cap than the sell-off of a billion of one day
It was $280 billion in one day.
One company.
Think about it.
One company in one day,
$280 billion in a sell-off.
So, yeah, it is a huge amount of money being lost.
But, you know, also a couple of things.
I don't think the DOJ really has a case here.
Unless they can say, for instance,
that these guys are kind of like, you know,
monopolizing TSMC in some way or something, you know,
you can't penalize someone for being the best.
You know what I mean?
Exactly what I said in a tweet, actually, and David might have seen it.
But yeah, exactly right.
And my thing said, sorry to interrupt you, it says,
how dare you be so successful?
And NVIDIA says, what are you talking about?
It says, well, you've got a 95% market share.
And they said, well, our chips are the best.
And people pay for,
they pay up for the best.
And then the DOJ comes back and says,
we want you to make crappy chips at cheaper prices so
you can compete with your inferior
peers.
And it's exactly what you're saying, Viv.
Yeah, exactly.
I mean, look, this isn't a thing that hasn't happened in the past.
I mean, I did a report recently on Google,
and I said the
DOJ is looking at Google as well for a possible breakup or some
kind of agreement about monopoly practices.
I said if that had to come to a choice,
you'd rather just break up than have any kind of agreement.
Because look at Microsoft.
Steve Ballmer was there for over a decade,
and the share price thing fell in that period of time.
It was down over the decade.
And since such a deal has taken over,
it happens to coincide with of course the some of the restrictions being
removed as well that share price has gone up multiples in
less time than steve balmer basically took to get it down i think like eight
percent of his tenure when the government gets
involved in something like this year it's a disaster for a company
but the one thing i can say about nvidia is that all they seem to be doing
is making the best chip exactly they
don't have a network effect where they basically have to have in video chips to
do
nvidia stuff they're not bundling stuff for instance like
microsoft does
where they bring on teams to take on Slack or something like that there,
or it's the Explorer to take out Netscape.
They're not like Google where basically, you know,
you're using Android and paying for people to have Android in their system to
basically, you know,
make sure Google is the number one search engine out there.
None of that is happening here.
It's just the best chip.
And unfortunately, nobody else can, or fortunately for NVIDIA,
nobody else seems to be able to quite crack this code.
Yeah.
So, David, we've been talking about this,
and we've spoken on numerous occasions about...
Nvidia being a double-edged sword.
You have to have it if you're a fund manager, but if you do have it,
you're vulnerable to the sort of thing that happened on Tuesday,
I think it was.
So it's actually happened.
But if you look at your graphs,
I know you've got graphs in front of you at your fingertips,
you'll probably say, well,
this year it's gone from there to there and it's only come back to where it
was in March or April or something like that.
Have you got that sort of information?
Just to contextualise what Viv has just been saying.
No, well, it's exactly that.
I'll just put up.
Oh, hold on a sec.
I'll try to get the chart up here.
But, you know, in fact,
I wrote an article for Business Day,
which is published tomorrow.
Yes.
And I ended off with exactly that,
you know, the trend is your friend.
I put it a little more articulately than that.
And I said,
if everything's still pointing upwards and you
can trust the numbers that are coming out,
there's no need to do anything.
You know, just stay with it.
And, you know, it's against that.
that I'm still staying with it.
What's very interesting is that
I looked at, we use FactSet,
and FactSet have these consensus
forecasts, and they list all the analysts,
they take all the analysts'research and so on,
and put it together.
And I looked, and I can do it now,
and I can call out all the names,
but there's not one analyst that was
bearish.
There might have been two that were hold instead of
out.
perform or overweight or buy
and the the price the target
price in which the analysts are put in video is
uh something like a hundred and you know
50 from where they are today at 108.
so my the point i make and i might be a
bit cynical in what i'm saying now is
Here you are,
these are analysts who spend their entire time looking
at tech shares.
They like Viv, you know, they spend, they go into all of it,
they understand what they're doing.
They talk to the company and they're all positive
on the outlook.
What's not so positive are
strategists from all the big firms, you know,
who probably, you know,
for whatever reason are
kind of indifferent.
and are calling the end of AI and this is a fad
and this is, you know,
the expectations are too high.
So I'm saying, okay, you know,
I'd rather go with the people I know and talk to who
I trust from past experience and, you know,
who I've followed for some time.
So I think this will blow out, you know,
this will blow over.
I think there's enormous amount of speculation.
You know,
this makes Hollywood's bets look like a
kindergarten board game, you know.
It's you know these betting sites.
It's it's these whoever's
playing in this area are playing for big big
stakes
The other point I want to make and you know,
we can talk about this Okay,
so if AI is gonna run out where the
next market leaders, you know,
what's the next market leading?
You know what what you're going to put your money into
what yeah, in other words Well,
you don't know because I mean and of course AI is going
to be with us forever
certainly for our lifetimes but as human beings have a funny
way of finding something new i mean
it's it's it's amazing you think oh gosh
the opportunity cost of not being in nvidia and ai was
just a fad and it's gone now what do i do no there's a
there's always something but short term you're quite right if ai
fizzles out then where do you go yeah i
think i you know before i give vivoc chance now but i
mean i'm saying we over complicate things
you know what i mean we over
We overcomplicate our lives with,
I think, in the industry in which we are.
It's actually not difficult.
You know, when I look at companies now, you look at them,
I understand them.
I say, that's a good business.
I'm going to put it away.
I'll carry on.
Let's see how they do.
But we're in an industry which needs to
move from minute to minute.
And everybody's got to outmaneuver the person
next to them and so on.
It's
quite strange.
And I think we're going through a period like this.
at the moment.
I don't think Viv is someone that overcomplicates his life.
I think he's very similar.
See, you buy low, you sell high.
And it's as simple as that.
Viv, am I simplifying this?
A couple of things.
Firstly, let's just say AI stopped right now.
Okay, no more AI development for the next, say, five years.
It will still take a lot of time for the full implication of what we already
have created to work its way through the system.
I mean,
there'll be jobs created and destroyed by what we
have right now.
So, you know...
over the next five, ten years,
because it hasn't fully gone
through the economy.
The second thing is that the
thing that we have doing right now is we're waiting for the next round
of these models to come out.
And what you've got to understand is these things are working, these chips,
this is why NVIDIA is such a powerful thing.
Normally you have commoditization when people catch up to you.
The thing with AI right now, the AI chips at least,
is that they're improving it about roughly 10 times every two years.
This is about five times faster than Moore's law,
which is doubling every two years.
And so what that means is that
people have to wait for the new chip to build a new model.
They can't just put more money into the old model to get the new stuff
going out here, because they have to wait for the new chip,
which is like, I said, 10 times more powerful every couple of years,
to get the bigger model out there.
And so we're going to get these models coming out really quickly.
And the thing I want you guys to know as well is that it's probably going to
accelerate, because I don't know if you saw Elon Musk's Glock
2 that came out, right?
It's now ranked third.
among the AI systems out there.
It's ahead of a whole bunch of other companies that have been in
this situation for a long time.
And the reason for this is quite simple.
Masters don't care about safety.
I mean,
this is his trick.
Why does he spaceship go into space and, for instance,
Amazon can't or almost like Bezos can't or Boeing
can't?
It's because he just sends them up.
They blob.
Why do they blob?
Try it again.
Fix that.
It blows up again.
Fix that.
Blow it up again.
That's what he does, you know what I mean?
That's what he's doing with AI right now.
And he went from zero to number three or number two, depending on the rankings,
in about three or four months.
And he's not going to be the only one.
There's a guy called Leon Aschenberger.
He's a former AI guy.
And he did a kind of a
forecast about what to expect from AI over the next, say,
decade or two.
And he basically said that if this stuff gets as powerful as it is,
it's going to be a race.
In a race like this year,
you either are number one or you're lost.
And you're going to start seeing more and more guys
starting to basically be more aggressive.
Remember, this is just how they were created.
DeepMind was the thing that created AI, or for Google.
Then OpenAI was created to be safer than DeepMind.
Then the guys from Anthropic left,
working at OpenAI,
left OpenAI to make Anthropic to be safer than
OpenAI.
You know what I mean?
Everybody had been trying to be safer.
OpenAI literally was started as a nonprofit for
safety.
Anthropic has it as number one principle to be the safest, nobody's the first
model.
Can you imagine those guys trying to build the safest
model going against somebody that's willing to just blow things up?
It's going to be really, really difficult for us to...
to basically keep track of what's going to be
happening.
Another thing to mention,
it took about a year between the time they developed GPT-4
to the time they released it to the public.
That whole time was about safety, right?
It took about,
Anthropix said they will never release the strongest model they can.
They'll always release a model that's not as strong as somebody else's.
Grok went from zero to nothing, like I said, in three or four months.
There is no safety testing happening there at a big scale.
That's why you can see those pictures of Trump and Kamala
on a plane heading into the Twin Towers.
So the speed that we saw the last couple of years,
just understand that is gone.
It will not be the same.
It will have to be faster.
OK, understood.
Well put.
Your knowledge of this whole thing and the players is
encyclopedic, Viv Govender.
Let's come back to Earth, David.
There's been loads of results out and there's been a couple more today as well.
But what I want to focus on, David,
is retail, because we've had Woolies,
we've had ShopRite and we've had Spa.
You see, Woolies is interesting, and everyone keeps,
every time I say to a commentator,
surely it's now time, this is a big grocery store,
this is a big grocery store,
and every single time groceries outperform
apparel and furniture or homeware,
whatever it is, so separately listed.
The second thing is, ShopRite, they said, eh,
we're no good at furniture, we'll sell it to Pepco,
so they did that, so they're saying, stick to what we're good at,
and Spar says, We're no good in Poland.
It's far too complicated.
We sell that.
But the terms of the deal,
someone explained it to me yesterday, are onerous,
David.
Yeah, yeah.
Well, they have to take over the debt.
Exactly.
You know, they sell it,
but they didn't sell the debt.
And they could only sell it without the debt,
which is something like, I don't know, what's it,
three billion or something grand.
Exactly right.
It's an enormous amount.
I don't know the exact term,
but that was my simple interpretation.
that in order to get it off their hands
and to stop bleeding money, they had to take that.
Now, I mean,
that's a huge debt to bring onto your balance sheet that
you're going to have to work out from here where things are not
exactly great.
So it's a company under
a huge amount of pressure.
And remember, Spar is not a grocer.
It's a buying organization.
Yes.
I mean, it does have its own shops.
But it mainly has franchisees or people who
run spas.
And what they do is they buy cheap for them
and take a turn on what they sell.
So, you know, Lindsay,
when I think back, I mean, I always used to
I was very proud of what we had achieved,
especially in the retailers.
But lately, you've had spa,
you've had mass market,
and now pick and pay just imploding.
Yeah.
You know, literally imploding.
But what's happened
And despite the fact that Choprath's numbers were slightly
disappointing or a little down,
there's nothing to worry about them.
But they stand, you know,
they are far ahead of everybody else with
kind of
Woolworths just in their wake, you know,
just trying to catch up.
You know, Woolworths has also got its issue, not on the food side,
but certainly on the apparel side.
Yes.
So where do we go?
I mean, you can't just blanket buy these things.
you've got to be very very selective obviously spar and
pick and pay well recently spar and pick and pay
longer term medium to long term has been horrible
and even even wool is it's all very good one
is doing well but the other one drags it down as
a company as a whole in australia of course anyway i
don't know where do you shop viv and do you are you loyal to
to one particular shop and therefore you know a little bit
about it and if you were in retail on the jsc
then you would sort of lean towards that one
That's a ridiculously simplistic argument.
But what do you think about retail?
Look, I mean, I'm mostly because of allergy reasons,
which is because of the
allergy issues to deal with.
But when it comes to buying retailers,
I've been quite loyal and only buying ShopRite, quite frankly,
both terms of like as an investment.
And the reason for it is quite simple.
I think that we are about to go through a massive change in the way
shopping occurs right now.
David can attest to this.
the amount of like times you see those little bikes on the road with the little
shop right sticking on the back of it delivering stuff has gone up
dramatically you know what i mean uh if the cost
is ridiculously low uh the convenience is there
in that environment basically are you going to
have five apps on your phone or you can have one
you're probably going to have one.
There's probably going to be,
and ShopRite already has a loyalty system already, where you get,
I think, a certain amount of money,
beyond a certain amount of pricing,
you get a free delivery effectively.
In that environment,
I can foresee massive consolidation in the retail
grocery space in South Africa.
And the biggest guy is going to win.
And right now that is ShopRite by a mile.
I just don't see how PicknPay or the other,
or SPAR, especially with SPAR's model,
can compete in this environment against the ShopRite.
I do think in five years time, ten years time,
we're just going to have larger share with deliveries and shoppers are going to
dominate that.
It's got a head start, hasn't it?
To go down,
Boxer and YouSave and so on,
we have a massive population who are incredibly
cost conscious and literally will
go from one shop to another to save a couple of
rand.
That's it.
But I think Viv's,
things are changing, things are the consolidation.
I can talk from a US experience
where you have, oh,
what's it called, you know,
these overnight where you can phone up at 8 o'clock or
put an order in at 8 o'clock in the evening for milk,
lettuce, a loaf of bread, whatever it is,
and early the next morning there's a knock on the door
and there it is.
You know, in a similar way, it's,
there are incredible deliveries there,
you know, where you don't have to, if you're a working person.
You know,
you don't have to run to the shops or stop off the train and go and
buy.
So
I think the convenience here and,
Viv, I must tell you,
I live very close to Bluebird, you know,
where you've got both Woolworths and you've got
checkers.
And the whole time from Bluebird,
you just see these drivers just
shoving out.
And I've actually spoken to them.
If you go down into the basement,
I think it's the third basement down in Bluebird and that.
There are numerous chaps, you know,
there already.
And you can't believe how much they deliver.
You know, I see them,
I've asked them and tried to get into it.
You know, they've got, they can take, you know, four,
five, six, maybe up to ten at a time.
You know, ten different orders.
And off they go, you know, and it's very,
very slick service.
They've even got their own football team.
Have you heard of, talking about online deliveries,
have you heard of a FTSE listed company?
It's in the FTSE 250 called
Ocado. Have either of you heard of that?
No.
Okay.
Ocado was established, no,
that's the history of who started it.
Ocado Group BLC is a British business based in
Hatfield, England,
which licenses grocery technology.
It owns a 50% share in the UK grocery retail
business Ocado.com.
The other 50% is owned by...
Marks and Spencer's.
It's listed on the LSE.
But the interesting thing is that it said, well,
okay, you're a competitor, Morrison's, but we'll deliver for you as well.
So what it does, you phone Ocado.
I've been in London with someone and you phone up
Ocado and you can
pick stuff from different shops and they
service a group of four or five
top retailers and everybody benefits
from it.
And I wonder if that could happen.
In South Africa, okay,
ShopRite at the moment does it on its own,
but maybe someone could adopt an
Ocado-style business model and do
it there.
But certainly it's been hugely successful.
I mean, it really has.
I mean, its listing was a massive success,
and it does very well.
But have a look at Ocado.
It's a good one.
Anyway, in the Netherlands,
if I phone them up now,
I'll probably get it Saturday morning.
It's embarrassingly bad.
David is saying overnight,
60-60 is 60 minutes.
It's the same hour.
So you order 60-60, it comes to you.
The thing is that it's about 35 rounds.
So think about the petrol to go to the shop.
Even if you're taking a taxi,
35 rounds is equivalent to that.
It comes to you at home.
So even the thing with South Africa is that, yes, we have poor people,
but we also have poor people that work for less money.
But when it comes to delivery services, the delivery drivers are paid a lot less.
So in a way,
the one disadvantage where you're going to talk about, you know,
poor people being cost conscious,
there's also cheaper drivers doing things.
But $35 is $2.
$35 rounds is $2.
$2 to have a delivery.
Your house in an hour.
And as you said, Dave.
Just things are changing, you know.
I don't know whether I was speaking to Lindsay or whether it was
when we were talking last week.
That's why I say when interest rates do come down and people
start to spend.
You can't go back pre-COVID or you
can't go back and choose the companies you
think are going to benefit.
So much has changed.
This is all the outcome of
COVID, where we've got used to staying at home,
eating at home, cooking at home,
getting lazy, not going down to the shops.
And all of these have developed from that.
But habits have changed.
And as you say, the more those habits change,
the better the service.
Yeah, it is going to change
the people that benefit.
Just before we move on to the markets,
Ocado processes 400,000
retail deliveries requests per week.
And that's just in the UK.
And it's also Europe wide as well.
Right.
Dollar Rand, 1773.
British pound against the Rand, 2332.
The Euro-Rand is
1965,
the Euro-Dollar 1.1085 after today's
employment data, which David will describe in a moment.
British Pound 1.3150,
that's been on the charge for so long now.
What else have we got?
We've got the gold price at 2.506,
which is up nearly $13 an ounce.
Platinum up 19 to 9.31,
Palladium at 9.35, which is up
8. And other commodities.
David, do you remember I sent you a graph of...
Brent crude and I said it's about to fall off a cliff.
Well it started,
it's scrambling down the slope isn't it?
I mean it's not doing very well.
Where's my STLB?
Oh there it is.
Just before you get on to your observations on that,
crude oil is up today, it's up about a percent for West Texas at
69.96 and Brent crude oil
which was below 73 yesterday,
it's just coming off a bit now 73.38
which is up nearly one percent.
Natural gas up six percent and what else we
got?
Nothing really of interest.
Copper up 1.1%,
but still under pressure,
$4.07 per
pound.
Right, the S&P 500 futures,
massive day earlier in the week,
suddenly turned red again.
55.14 for the September futures,
down about 0.3%.
The
US 10-year Treasury is currently...
Not coming up on my screen, so I'll go to the South African 10-year,
which is also not coming up.
They don't like the capital markets invested.
Investing.com at the moment.
But, David, you were going to say something about Brent crude oil.
I think
commodities are under pressure mainly because of China.
There's a lot of concerns about China.
And for evidence of this,
if you go into the European markets,
go have a look at the luxury stocks,
Hermes, LVMH, Richemont.
All of those have come down dramatically.
You know, anything that's connected with Europe,
sorry, with China from Europe is down.
You know,
I'm looking at LVMH at the moment down 3.8
percent.
Ermias down 6.5 percent.
L'Oreal, okay, that's holding up.
But I'm trying to find some of the other.
Ferrari down 2 percent, so on.
And these have been coming down over the last couple of days quite
dramatically.
all associated with the downgrading of Chinese
growth and translating
that into much lower demand coming from
China in particular.
Richmond down 1.7, I just found that now.
So it is a story and that's, you know,
you've seen iron ore.
The last time I looked at iron ore was around
about 90,
1992 in that region,
dollars a ton.
So I think...
Brent is also suffering as a result of that,
concerns about falling demand.
Why I'm so conscious of it,
and no one else seems to be that concerned,
is because it affects South Africa.
You know, where platinum prices,
we saw Neil Frodeman's views on where palladium is going.
And at the end, you know, at the end of the day,
we earn a lot of tax from our miners.
And where we've had these dramatic cuts in
revenue.
it's going to flow through.
It's going to hurt us.
So
I know we're very excited about the local markets and
what's happening and GNU and various other
things,
but that side of it really disturbs
me.
It's a concern that
commodities remain where they are at the moment.
Speaking about Africa and commodities, Viv,
I noticed there's Africa,
China, a shindig going on in China at the moment.
I think, in Beijing.
And, you know, they've come out today and said,
I think they're pledging
$60 billion to Africa,
finance to Africa, over the next three years.
Look at this, and people say, oh, isn't it great?
You know, the relationship's never been better.
I don't, am I being cynical, Viv,
by saying there's only one reason that China is cozying
up to Africa,
and that is because they will finance
infrastructure projects.
and mining and resources exploration and that
sort of thing on their terms.
Do the communities around a new mine benefit
like it would if, for example,
a South African financier was going into Africa
with great ESG credentials?
Am I being too cynical, Viv, about
China and Africa?
I think you're not being slick enough.
I think nobody, even the South African ESG,
is going in there with good intentions in mind.
I think Glencore has done some stuff that we can not be proud of
as South Africans.
You know, obviously it's not quite a South African company, but, you know,
it is a South African run.
I think that if you look at internationally, if you're a smaller,
resource-rich country,
you're not going to get many friends out there.
A recent example was Honduras.
He's now being sued by some company
because of some agreements.
And these guys have been backed by what you consider to be like...
Like the Silicon Valley kind of like
charitable guys like Mark and Reason and Sam Altman and those kind of guys
have backed some endeavor in Honduras that have not bankrupt that country.
The same thing I think is happening here in Africa.
We can't expect anyone to be charitable.
That's not the way the world works.
No deal is going to be great.
The only fear I have here or the only thing I think that has been done here,
like you said, financing.
We finance to build infrastructure products, but we built with Chinese
machinery,
Chinese labor and Chinese farmers doing the building.
So it's kind of like,
I think the example I'll give is there was a case a while
back where someone was talking about Ukraine and the war in Ukraine,
how the US is giving money to the Ukraine.
It turned out it wasn't giving money to the Ukraine.
It was giving money to American manufacturers
that were delivering products to the Ukraine.
The same thing is happening here.
It's likely going to be
Chinese firms getting money from the Chinese government to build
stuff in Africa, if you know what I mean.
And I think that is the way it's going.
And it kind of makes sense from their point of view because the property sector
is such a big
deal in China and it's pretty much collapsed at the moment.
And they need to find some way to kind of rescue those companies.
And this might be a roundabout way to kind of bail out their own
construction sector.
They're trying to prop up their image as well.
But the one thing about Africa is that
I promise you these projects are not done.
There's no free for lunch.
Of course not.
Many of those African leaders, I mean, you just…
You just know who they are.
You know the kind of levels of democracy they
have.
And probably the same as being here all the time.
It's never done for the benefit of the country.
Or it is done for the benefit of the country,
but other people benefit as well along the way.
And, you know, that's your ESG.
It's a very worrying thing.
The other thing is that
I think all of these things, you know,
the talk is very big, but the delivery is very small.
I don't know.
I think what happens is, Viv is right,
and it ends up being a Chinese project done,
and they send people out here to use all
their equipment and so on, money and etc.
But it's not done for free.
They don't walk away and say,
thank you very much and carry on.
I've seen a few case studies of
the way China goes in.
brings in its own workers it's only everything you you're
quite right sorry for being less than
uh viciously cynical about this i shall
amend my stance immediately the south cantonia bond
9.19 and the us
tenure the yield also falling in the last couple of
days down to 3.75 having been 10
basis points higher not so long ago have to do
bitcoin because there are certain people that like it 56
330 down just
over two Winners and losers,
David, on the JSE on your screen, and I'll give you mine in a moment.
On my screen, I'll give you the winners.
I see SPAR's picked up a little after
yesterday.
It was down
15% at one stage yesterday, wasn't it,
after those Polish numbers.
Well, MTN is up
3.9%, Sappy, Woolworths,
SPAR, Advertec.
Those seem to be the winners, Bitvest as well.
In fact, they're more winners than losers,
but we actually ended up up a
quarter percent, but it was mainly on the industrial side.
On the negative side, I'm a bit strange about Harmony.
They had very, very good numbers, but
I see they're down about three and a half.
I'm not sure what might have disturbed them in the results,
whether they expected more.
But then we've got Elferman, Bytes.
African Rainbow, Minerals, Nedbank,
Standard Bank, Mr Price,
all in negative territory.
But nothing dramatic.
You know, there's no major moves.
I'm talking about the big companies.
I don't know if I go look at some of the smaller caps.
There might be more moves.
But you can give me yours and I'll look for...
Now you've given me all the ones, Sappy up 3.3,
Telcom you didn't mention, 3.3 as well.
And yeah,
Etelta at the bottom down 2.5%.
But you've given...
the main ones.
We'll come to the indices with you in a moment, David.
But Viv, after the US jobs numbers today,
which is, you know, they're okay,
but they're not quite as good as we've been used to.
I think it's, you can go back to January
2021,
since the numbers of this particular survey were
in line with what we saw today.
Is the US, Viv,
going into a soft recession?
I think there is indications that it might have been so.
I think it's pretty clear right now that the Fed waited too long.
I mean, look, this is very difficult to catch, right?
And the Fed almost never does.
And I think it's just another example of just how history repeats itself.
So they waited a bit too long.
We've seen softer job numbers.
We had that 1 million,
virtually 818,000, I think, job reversal,
you know,
come through recently where they removed that from the
last year's estimates.
I think it's pretty clear that the economy in the U.S.
is weaker than anticipated.
And I think the Fed is probably reacting, or will have to react,
a bit more strongly than the market anticipated.
But the weird thing is that I think right now we are in a period where bad numbers
are bad numbers and good numbers are good numbers.
Normally it's bad numbers, maybe good numbers,
if there's an increased chance of a rate cut coming through.
Right now I think the market's pricing in basically
rate cuts for the foreseeable future.
And I don't think they're going to be expecting a really, really bad number.
the Federal Reserve is going to basically be cutting by more than that.
And so I do think that if it does,
it's not going to make too much of a difference in terms of market performance.
So I think for the foreseeable future,
when we see bad numbers,
we're going to take them as bad numbers for the market as well.
Okay.
David, what was I going to say?
Yes, closing indices, please, and the value traded, if you would.
Yeah, I'll go to the value traded.
It came to about just over
21.5 billion.
NASPERS, First Rand, Standard Bank, Harmony,
Capitec are most of the big traders in there.
Nothing outstanding.
It's always NASPERS as they buy back their shares.
They're always up there.
And the banks have been very,
very big traders in terms
of regularly money going into
the banks.
Just the all-share ended.
We actually bounced down and bounced up.
We bounced down before the auction and bounced up after the
auction.
We ended up.
0.28% at
82147.
The resource index down slightly down
0.18%.
Nothing really in the miners,
as we mentioned.
Banks down 0.5%.
The overall financial index up
0.4%.
I think it must have been helped by some of the life insurers.
The industrial index up
0.8%.
I'm not quite sure what has driven that up.
with Richemont down on that.
It could be nice, there's some process,
but that's about it.
Lindsay,
the one segment that's doing well and it's always
up, again, up another 1% today has been property.
Property, yes.
People keep telling me this.
Yeah, yeah.
You know, every day there's buying a property, you know,
maybe expecting rates to come down fairly dramatically,
which would take the, you know,
the overdraft rates and make the rates that you're getting now on
property fairly attractive.
and things seem to him you know there's a level
of improvement i don't think it's dramatic but
uh you know we're getting better noises coming out of the
property business but every day i look here and
uh you know i see the the index uh in the green
sometimes even when the overall market is down
okay uh two questions one for each of you viv
the let's say that somebody phones you up tomorrow and says
uh listen mr governor i i i heard you
talking to that uh that that wise
man uh shapira and also that williams fellow
and i want to give you i'm going to give you 20
million around and i want you to build me an ai
portfolio but with a focus on nvidia at what
point do you say okay
nvidia now presents good value good
old-fashioned solid valuation uh is it when it
comes down to half of its um recent high
70 to 80 or something or do you say okay
I'll start easing you into the market straight away,
sir.
What is your answer to this chat?
I think, quite frankly,
if you had to look at just where we are with NVIDIA at the moment,
I think that it doesn't matter what NVIDIA does.
It matters what the technology of the people that use
NVIDIA is turning out to be like.
If the next version of
GPT comes out, GPT-5 comes out, or GROK 3 comes out,
there is a significant jump, and this stuff is doing multimodal stuff.
Or we're getting the Optimus robot announcement and this stuff
is like, you know, I don't know if you saw the figure robot
recently with the little video they did hugging that girl and
whatnot.
If those things turn out to be real, I mean,
these things are cheap at the moment.
If I ever hit a plateau, I think then you might see,
if not AI being, you know, forgotten about,
but you'll have a chance for Intel and AMD to catch up.
In video, it lies on the fact that.
the speed of technology improving is so fast that its competitors
are just being left in the dust.
If the technology improvement slows down,
that I think would be the main thing.
It's not about NVIDIA itself, it's about what its chips can do.
Okay, good answer.
David,
you like to stick with things and you're sticking with luxury goods because
eventually the Chinese economy,
through various stimulatory
processes,
will get back to where it was and commodities will turn.
We know it's a big cycle, the commodity cycle.
When it's really bad, it destroys people.
I mean, look at companies like Kumbha Iron Oil,
for example, when it was in the 20s, for goodness sake.
So you're going to stick with luxury
goods.
But if you had stuck with Aston Martin when it
listed… No, I'm not.
I haven't.
No, I know you haven't.
But if you had done and people say, well, you know,
you can't go wrong with this.
It's a brilliant brand and
James Bond and everything else,
you would have lost 96% in
six years.
You've got to be very careful where you put your money.
Very, very careful.
And for that reason, you know,
I still like Hermes and I still like Ferrari simply
because they're not as
heavily exposed to China.
And also… They make,
they, what's the word?
They control their production.
They control their supply.
Both of those companies.
I've learned in the past where we've got
worrying and panicking.
You know, we sell good companies.
You've got to learn to ride these out as well because they
turn around faster than they've fallen.
And that's the big worry.
I must say I have got a concern about
LVMH because I'm not quite sure this
strategy.
might work.
When they start to go into hotels and restaurants and
try to brand everything other than the goods for which
they were well known, I get a bit concerned.
So I've still got my eye on that,
but I don't want to be,
what's the word,
influenced by these kind of day-to-day
movements.
China is a huge economy and something will be done there that
will kind of turn it around.
OK, jolly good.
Gentlemen, thanks for your extended time this evening.
Thanks very much for your insights.
Viv Govender is from Ransuisse.
David Shapiro from Sasson Securities, both from Johannesburg.
And that was the 5 o'clock shadow.
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