WEBVTT

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You're listening to Strictly Business
Podcast with Lindsay Williams.

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The JSC has closed its doors for another
day.

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So as it's a Wednesday, I'm speaking to
Skullclo,

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Portfolio Manager at PSG World's Old Oak
division in Cape Town. Now,

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I spoke to a previous commentator and I
said, you know what,

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there's really not much to talk about
because everything's going swimmingly.

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Thank you very much.

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The markets keep on...

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driving their way higher in their own sort
of grinding way and okay we've had a few

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things out on the stock exchange new

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service today but otherwise not very much
so maybe skulk low we should start with

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the um

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JSC Securities exchange Arsenal metal
quilter 91 anything else anything you want

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to comment upon

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I I think I think the quilter was was the
one that that already stood for me

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Nice move in the share price after the
trading update.

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But this is good.

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I mean, from an investment person, I mean,
I love investments.

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These type of figures usually makes me
excited.

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You know, assets under administration and
management reach

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£116.2 billion.

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And in September, now it's a 2% increase.

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I think the thing that stood out for me,
the core net inflows.

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Now, all these, let's call it, it was a 2%
increase on the assets at administration

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and management or

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management administration.

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But they attributed this growth in the AUM
to

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net inflows.

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Yeah, and higher market levels.

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We've been chatting about this market.

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But listen to this.

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I mean, they came in quarter one.

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they had inflows of 810 million pounds.

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Quarter two, they increased that to 923
million pounds.

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And this quarter, increasing it by 1.5
billion pounds.

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That's amazing, amazing.

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So hats off, Kulte.

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I mean, you clearly are doing things
right.

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Market, as I mentioned, really, really
loved it.

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Share price up.

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just shy of 3%, close the day, 33.54.

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Yeah, and then they just look at, you
know, through these segments, you know,

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how, you know, the IFI channel,

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how they've enjoyed inflows, you know,

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on the platform increasing by 76% year on
year.

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It's just everything in this trading
update made me feel good.

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I'm not a shareholder.

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You know, days like today, I do feel a
little bit.

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you know a FOMO but I think you know
shareholders of quilters definitely

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definitely feeling feeling a little bit
better today than they

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felt tomorrow.

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Tell me this then what's your philosophy
now if the market dips for any reason

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because the general market dips or
quilters

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shareholders decide to take a profit
whatever it is and it dips to a sort of

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level that you that your metrics mean that

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it's on your radar would you be a keen
buyer of it in other words to become a

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shareholder?

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Yeah I'm No, definitely.

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I like these companies and I don't have
time to really comb through

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1991. I know that they've given recent
updates and not just today's one,

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but recent updates have shown that
they've, unlike Quilter,

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they had a bit of a difficult time.

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They didn't enjoy the inflows that Quilter
had and

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I know some of the funds really struggled.

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I mean...

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And again, I'm not going to be harsh.

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I love 91.

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Also, not a shelter, so that's easy to
just get that out of the way.

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But it's a great company and well-managed.

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One should always remember, when you're an
asset management company, that's weird,

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listeners sometimes feel, you know, look
at them.

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They really struggle.

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The funds struggle overall.

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I mean, and it wasn't just the one fund.

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It was quite a few funds that… that sort
of underperformed their benchmarks.

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And people should know that when you've
got, for instance, I'm just going to use

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an example, and that can be very,

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very straight.

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I mean, an IT one is not necessarily a
value manager.

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I'm just like, when you've got a typical
value manager and you've got a growth

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market,

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which we've had recently, if that value
manager actually still managed to

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outperform,

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markets and their benchmarks,

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they clearly did not follow the mandate by
being a value manager.

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But investors are a very, very fickle
thing.

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I mean, when you tend to do well, you
don't often hear about them.

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And when you sort of don't do well, you do
hear.

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And investors are very vocal saying, well,
why are we paying active fees?

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Why are we paying management fees?

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You do have a mandate.

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It wasn't the time or the environment for
491's mandates, and they struggled.

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Hence the fact that they struggled in
terms of the similar performances that

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Quilter had.

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Share price, after the uptick today, down
4.3%.

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Clearly, clearly not a good time for that.

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Is it the case, Scalp, that there are
certain fund managers that when markets

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are doing really well,

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don't do really well with the market
because they are active rather than

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passive?

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In other words, if they had an ETF or they
tracked a particular index,

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they would track that index as the phrase
suggests, index trackers.

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So during bad times, do you think
companies like 91 and others do better?

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than during really, really good times,
which is what we're seeing at the moment?

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Or am I being too simplistic here?

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No, no, no.

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You've actually nailed it straight on
ahead.

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Because, I mean, I think, what was it?

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Was it 2023, I think, if I'm not mistaken,
was the year where we've had the

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Magnificent Seven.

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If you stripped out, for instance, the
Magnificent Seven, seven shares out of the

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S&P 500,

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basically leaving the remaining 493
shares, if you only invested in...

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in those four and only three on one stage
you had negative return um for the for

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that year adding

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the the the uh let's call it those seven
shares suddenly the performances went up

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to you know 15 or

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16 just showing you that if you were an
active manager and for some reason felt

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you follow a more value approach

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you don't want to buy companies that
that's trading at anything between 30 and

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80 times and

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price earnings ratios because you feel
that it's going to be very very difficult

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to justify over the longer haul.

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If you don't have those shares, I mean,
clearly you're going to be

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underperforming.

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So you're right.

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At times where things are just, some of
these larger components just go, yes, it's

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a great,

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great way of investing.

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Go invest in a passive investment.

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But it's usually when volatility increase,

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that's the environment where you do see
these active managers start coming forward

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again and outperforming these benchmarks.

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very good very good analysis okay let's
have a look at the markets now they're

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gratifyingly boring uh the

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dollar round is 17 in 1765.

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there we go again i just want to quickly
stop lindsay myself just off of uh in

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record we we had a san africans

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which we um which we call you know bitter
lacquer you know how how can you have the

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word bitter and lacquer which is great um

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in in in one sentence you know, with each
other.

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I'll explain that.

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And you just say, what do you call it?

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Gratifyingly boring.

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Gratifyingly boring.

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Yes, exactly what I said.

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And you asked me how I was today before we
came on air.

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And I said, tolerably good.

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In other words, I'm good, but you know,
it's, I can tolerate it, but it's not

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absolutely brilliant.

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But what did you say?

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Bitter lacquer.

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Yeah, bitter lacquer.

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It's, this is, this is, I mean, it's not
just lacquer, which is great.

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It's, it's bitter lacquer it's like bitter
great i mean so in other words it's so

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good it's almost painful

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yeah i don't know unless you really i i
you know if you've got a fondness for

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bitterness and i know there's some people
do have a fondness but

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geez no uh-uh the afrikaans

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afrikaans language sometimes just a lovely
language i have to say anyway i was going

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to tell you about an afrikaans

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woman that i knew that used to read me
afrikaans poetry i didn't know a word of

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it But it was so lyrical.

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She used to sit and read me these poems.

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Anyway, I've said it now.

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I said I wouldn't say it, but I've just
said it.

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Dollar Rand 1764, just to reiterate.

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British pound against the Rand 2296.

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And the Euro Rand is 1920, we'll call it.

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Yeah, 1920.

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Euro dollar 108.75, barely changed.

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British pound, after some really, really
good inflation data from the UK today.

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seeing it go down to 1.7%.

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And don't forget, it wasn't that long ago
that it was above 11%.

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So the Bank of England has done very well
there, along with the government, of

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course,

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because of the complete lack of demand in
the UK economy.

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Elsewhere, what have we got?

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We've got the gold price up 9 to $26.70.

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$2,670 per ounce.

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Platinum up 18.

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It's gone into four figures.

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There's 1,005.

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Very, very good, 1.8% higher.

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And palladium up $12 an ounce to $1,016 an
ounce.

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The white metal's suddenly doing a little
bit better.

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Now, this completes the sort of very good
commodity complex for South Africa.

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Brent crude oil is $73.59, which is down
nearly 1%.

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And West Texas crude, just over 1% weaker,
$69.76.

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We've got natural gas prices falling
nearly 4%.

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and yeah it's all very very satisfactory

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what else we have here the s p 500 futures
uh for december you know they've been

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making record highs almost

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every day here we go just very slightly
higher at 5864 today the us 10-year

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treasury yield is

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uh four percent on the nose and the south
african 10-year 9.40 bitcoin

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is gosh 67 403 So yeah, market's okay,
Skulk.

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If you have a look at the movers on the
JSC today, you mentioned Quilter, but it

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doesn't make it into the top five,

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unfortunately for you, because some of the
ones that are in the top five will be good

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for you.

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Harmony, up 6.75%.

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DRD Gold, up 4.4%.

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Goldfields, up 4.2%.

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No, Quilter does come in at number five,
3.9% higher.

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Downside, AVI down 6.1%.

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And you'll tell me.

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but that's um ex-dividend story and 91 plc
and 91 limited 4.3 and 3.7 weaker

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respectively premier down three and a half
percent and growth point down 3.3 any to

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add from

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your stable yeah no

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no no so so so as you read that the top
performance i i went back to my my uh

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afrikaans saying

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bitter lacquer now that's that's what i
call a bitter bitter lacquer day on the

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jsc

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when your top four performers you know out
of the top five all the gold diggers i

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mean that's what i want to

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see i want to see this and these guys are
printing money lindsay i mean you

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mentioned it in 2670

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odd dollars per ounce yo i mean these guys
are really really profitable currently

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pointing it as they

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say in england they're coining it which is
and i still believe that they're still

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lagging the gold price i think you

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know investors still feel that this this

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a current gold price or a bit of a flash
in the pan and um i think if it's going to

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turn out to be

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a a let's call it a a stick in the ground
or a pen in the ground then then then

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you know then this this is going to be
very very interesting for gold miners i

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think what you should do with your your

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excellent linkedin messages sometimes what
you should do you should get the gold

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price in us dollars the gold price in rand
and the

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performance of I know there's no gold
index anymore, but I'm sure you can come

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up with one somewhere and put the three.

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And if the gold miners are lagging, it's
not because they're doing badly.

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It's because people have been so
disappointed with them over the years that

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they say, oh, we just don't believe them
anymore.

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But the gearing, if you want gearing to
the gold price, you go for a gold miner,

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00:13:14.165 --> 00:13:14.225
surely.

239
00:13:15.365 --> 00:13:16.926
Yeah, no, no, no, for sure.

240
00:13:17.246 --> 00:13:21.128
And I know a lot of listeners out there
will always highlight the fact that when

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00:13:21.128 --> 00:13:21.308
you look at

242
00:13:21.884 --> 00:13:28.527
a gold mine or specifically our gold
miners uh either all in cost or all in

243
00:13:28.527 --> 00:13:30.527
sustainable cost how

244
00:13:30.527 --> 00:13:35.530
that is increased quite incremental you
know quite a bit more than than inflation

245
00:13:35.530 --> 00:13:37.530
um or even it

246
00:13:37.530 --> 00:13:39.171
actually increased way more than what the
gold price increased i

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00:13:39.571 --> 00:13:46.454
i do conquer i do agree with that those
statements but the one thing if you look

248
00:13:46.454 --> 00:13:48.454
back and i've done some analysis on gold

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00:13:48.454 --> 00:13:51.817
fields where i look back 15 years and
every time you do get these pops in the

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00:13:51.817 --> 00:13:53.817
gold price,

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00:13:53.817 --> 00:13:58.300
you suddenly see these gold mines really,
really aggressively increasing their ore

252
00:13:58.300 --> 00:13:58.340
in cost.

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00:13:58.340 --> 00:14:04.264
And it's very, very easy to look at
because when you've got a gold price that

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00:14:04.264 --> 00:14:06.264
moves as it's currently doing,

255
00:14:06.264 --> 00:14:08.946
the management are looking at this and
say, well, we need to be aggressive.

256
00:14:09.067 --> 00:14:14.169
Let's just find any person in a
10-kilometer radius around the mine.

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00:14:14.650 --> 00:14:18.632
Let's try and find it, convince them to
get a shovel, get a...

258
00:14:18.732 --> 00:14:25.656
pick and let's just try and so you you
actually do they always increase their

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00:14:25.656 --> 00:14:27.656
costs um and short-term costs

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00:14:27.656 --> 00:14:32.340
and as you know next next let's call it
quarter or two you see that all-in costs

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00:14:32.340 --> 00:14:34.340
stabilize and even come down in this

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00:14:34.340 --> 00:14:38.783
higher um you know gold price environment
if this is going to be a similar trend

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00:14:38.783 --> 00:14:40.783
that we've seen historically

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00:14:40.783 --> 00:14:46.528
as i mentioned these mines are gonna be
printing money i mean i looked at a few of

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00:14:46.528 --> 00:14:48.528
the top ten um

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00:14:48.528 --> 00:14:50.528
mines globally.

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00:14:50.528 --> 00:14:53.453
And some of these mines are still mining
merely at

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00:14:53.493 --> 00:14:58.637
$1,500, $1,600 per ounce.

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00:14:58.637 --> 00:15:04.983
And that's what, but some of these mines
are mining their gold, and they're getting

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00:15:04.983 --> 00:15:06.983
$2,600,

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00:15:06.983 --> 00:15:08.983
$2,600.

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00:15:08.983 --> 00:15:10.983
Exactly.

273
00:15:10.983 --> 00:15:12.983
Exactly.

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00:15:12.983 --> 00:15:14.050
This is something that you and I, early
80s was a little bit before Mark's time,

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00:15:15.051 --> 00:15:19.970
where we've had massive, massive gold
price levels and similar environment.

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00:15:21.789 --> 00:15:24.870
Since then, you will know, gold miners
struggle.

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00:15:24.870 --> 00:15:27.071
They always sit with very, very high debt
levels.

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00:15:28.011 --> 00:15:32.772
They didn't really have any free cash
flow, so you didn't expect any dividends.

279
00:15:33.412 --> 00:15:36.273
Now, suddenly, this is a different story.

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00:15:36.753 --> 00:15:41.755
These guys are printing money and are
quite financially healthy.

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00:15:41.775 --> 00:15:43.655
They're sitting with very, very little
debt levels.

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00:15:43.995 --> 00:15:48.797
And soon, you're going to start seeing
them pay very, very large dividends if the

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00:15:48.797 --> 00:15:50.797
trend continues.

284
00:15:50.797 --> 00:15:52.797
So, yeah.

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00:15:52.797 --> 00:15:54.797
I think this...

286
00:15:54.797 --> 00:15:56.797
Have you finished with the gold story now?

287
00:15:56.797 --> 00:15:58.797
No, never ever.

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00:15:58.797 --> 00:16:00.797
You know me.

289
00:16:00.797 --> 00:16:02.797
You know me.

290
00:16:02.797 --> 00:16:04.797
You just start me up.

291
00:16:04.797 --> 00:16:06.797
It's just a little push.

292
00:16:06.797 --> 00:16:08.797
You don't even have to...

293
00:16:08.797 --> 00:16:10.797
Just a nudge.

294
00:16:10.797 --> 00:16:12.797
That's all that's a low need.

295
00:16:12.797 --> 00:16:14.797
Okay.

296
00:16:14.797 --> 00:16:16.797
Please give me the closing JSC indices,
Skulk.

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00:16:16.797 --> 00:16:18.797
And just before I finish, I'm going to
mention that AVI had a massive,

298
00:16:18.797 --> 00:16:20.797
massive final and a special dividend.

299
00:16:20.797 --> 00:16:22.797
So...

300
00:16:22.797 --> 00:16:22.985
And then the SPM and most of the decline
today was all dividends.

301
00:16:23.405 --> 00:16:24.906
And also you mentioned GrowthPoint.

302
00:16:24.926 --> 00:16:27.688
GrowthPoint was the other one that had a
final dividend.

303
00:16:27.708 --> 00:16:32.753
So I think three of the four, both getting
91.

304
00:16:32.753 --> 00:16:36.055
91s are just, I think, the big, big drop
for today after the trading statement.

305
00:16:36.455 --> 00:16:38.097
So closing prices for today.

306
00:16:38.697 --> 00:16:42.480
The JSC All Share closed at 86,393 points.

307
00:16:42.861 --> 00:16:44.742
That is up 52 basis points.

308
00:16:45.002 --> 00:16:46.484
I'm going to leave the best for last.

309
00:16:46.504 --> 00:16:47.564
So the industrial's up.

310
00:16:48.505 --> 00:16:55.049
nine basis points just keeping themselves
in the green while financial struggle to

311
00:16:55.049 --> 00:16:57.049
keep themselves in the green they were
down 18 basis points

312
00:16:57.049 --> 00:17:02.113
even the asset property index they were
down six basis points and wait for it our

313
00:17:02.113 --> 00:17:04.113
resources were the

314
00:17:04.113 --> 00:17:06.113
star of the day today

315
00:17:06.113 --> 00:17:10.978
closed the day at 2.83 percent in the
green so what what a stunning day you

316
00:17:10.978 --> 00:17:17.561
know for our gonna stop performance on the
chase you know the resources and when I

317
00:17:17.561 --> 00:17:19.561
look at the turnover I must say, you know,

318
00:17:19.561 --> 00:17:21.202
when you've got a day like today where the
resources trade the way they do,

319
00:17:23.163 --> 00:17:25.664
you would typically like to see a larger
turnover.

320
00:17:25.724 --> 00:17:29.665
And we had, you know, 25.4 billion traded
for today.

321
00:17:29.785 --> 00:17:30.485
Very nice.

322
00:17:30.485 --> 00:17:32.645
Very, very nice.

323
00:17:32.725 --> 00:17:33.506
It's very good news.

324
00:17:34.106 --> 00:17:35.806
Market going up on high volume.

325
00:17:36.246 --> 00:17:38.327
That is an encouraging sign.

326
00:17:38.727 --> 00:17:39.427
Very good.

327
00:17:39.727 --> 00:17:40.427
Okay.

328
00:17:40.427 --> 00:17:42.748
Skulk, thank you for your excellent
analysis as always.

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00:17:43.068 --> 00:17:45.969
Skulk Lowe is a portfolio manager at PSG
Wealth.

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00:17:46.149 --> 00:17:48.831
Old Oak in Cape Town and that was the five
o'clock shadow.

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00:17:49.111 --> 00:17:56.057
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00:17:56.057 --> 00:17:58.057
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00:17:58.057 --> 00:17:59.820
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00:18:00.141 --> 00:18:04.784
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00:18:05.245 --> 00:18:12.210
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00:18:12.210 --> 00:18:14.210
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00:18:14.210 --> 00:18:15.013
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00:18:15.353 --> 00:18:20.521
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00:18:20.821 --> 00:18:23.245
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