You're listening to Strictly Business Podcast with Lindsay Williams.
JSC has closed its doors for another day, so it's time for the 5 o'clock shadow.
And as always, on a Wednesday, it's populated by Skulk Lowe,
Portfolio Manager at PSG Wealth Old Oak in Cape Town. Here we are, Skulk.
What is it today?
The 20th of November. Just a few weeks away from Christmas.
Just about four weeks away from Christmas.
the season of the early Christmas party and the season of just looking back a
little bit,
but also looking forward because last week, Skulk,
we both put forward the idea that perhaps it's not going to be the smoothest
transition from
2024 to 2025.
Do you still believe that or were you just, you know, talking your book?
No, no, no, no.
And as I sit here, I'm not, I'm not, I mean, I do think that listeners are.
there should to definitely be looking at at over exposure to anything i mean for
now i think the over
exposure still to to u.s stocks u.s tech stocks um and one should know that that's
not gonna
not gonna not actually be a good thing if you look at just the cabinet that that
trump is now uh you know choosing
or looking at i mean none of them are really really these these global tech
lovers I mean, we know Elon Musk's view on he don't like
Bill Gates and all those.
So I think it's going to be interesting looking at it.
I mean, we had this conversation last week where we just looked at
Trump's three major things.
I mean, it's the beautiful tax cuts.
I mean, bringing down the corporate tax rate to a wonderful.
It's going to be huge, 15%.
I mean, yes, it sounds wonderful on paper,
but this is a country that when it took office for the first time had
less than a half a trillion dollars budget deficit.
I mean, and back then, and we know that the U.S.
has been running a deficit for over two decades.
So that's nothing new.
And somewhere along the line, just by the way, You know, for the listeners out
there, what I'm talking about,
it's like you sitting in the beginning of the month and say, well,
my salary is going to be a hundred grand and this is how I'm budgeting to spend
this hundred
grand.
Yeah.
And end of the month, inevitably, if you if you're the US back when when when
Trump had his first term, end of the month, he inevitably didn't spend a
hundred grand is is.
team spended 198 rand you know or you know pretty much went way
over uh i mean nowadays it's it's it's even more so so half a trillion dollars
deficit
and we know how he just went on he started that 2017 uh perspective rate cut and they
said that now i want to continue that rate
cut um a structure that that he proposed back in 2017.
what what When you look at the last fiscal period, which now ended September
2024, they had a deficit of
just close to $1.9 trillion.
Trillion.
So please tell me, as a really just this very,
very simplistic guy, the south tip of Africa,
how do you propose, Mr.
Trump or President
Trump, how do you propose cutting the tax rates from
21% to 15% if you're sitting with a deficit
you're currently doing?
So let's say he's going to find ways.
He's going to talk about the tariffs, which I'm going to get to.
He's going to be talking about the tariffs.
And these are the ways how he's going to be sort of do this kite flying thing.
But let's say, let's say.
He gets it right, and he managed to bring the deficit down.
What do you think, Lindsay,
will happen to inflation if you do bring these tax rates down as we just said?
He has campaigned as a president who will bring down inflation.
Now,
what he failed to say to his slavishly loyal supporters is that
inflation went shooting up.
Not because of Biden and Harris, but because of external affairs, i.e.
supply chain issues, China, and of course, the war in Europe.
And it is a war in Europe.
And let's not forget about that.
It is a war in Europe, and it's getting worse and worse.
And it's very disturbing what's happened in the last 48 hours with the revamp of
the nuclear policy of
Russia.
But anyway, never mind nuclear.
The fact is...
Why was there a revamp?
Why was it revamped?
Well, because Biden said you can shoot whatever you like out of Russia with the
missiles that we gave you.
I mean, I can't believe it.
But Putin must be sitting there gnashing his teeth.
And Sergei Lavrov at the G20 meeting saying, why am I sitting here with you
people?
You've just given our enemy the ability to target 200
miles into.
It's unbelievable what's going on.
I don't even want to talk about it.
But the point is, my inflation point was that he was campaigning on a lower
inflation ticket.
And that ticket, unfortunately, has just been ripped up because with tax cuts,
whether it be at the corporate level or at the retail, the consumer level, i.e.
Joe in the street.
The fact is that that plus tariffs is going to increase inflation.
And then people will say, no, wait a second.
My shopping basket's gone up under Trump.
It's now a 5% increase.
rather than the 2% we had under Biden-Harris. There's all sorts of
anomalies, Skalk,
but it's going to be an incredibly difficult year for you wealth managers,
you finance people in 2025.
Very difficult, Skalk.
Have a good holiday, I say.
All roads lead to high inflation, no matter how you look at this.
Yes.
Every single road we're looking.
I mean, it's like Google Maps to high inflation all over.
No matter.
which way you look at this.
Because, I mean, we talk about the tax cuts, inflation.
I mean, we're talking about these immigration policies that he proposed.
I mean, concentration camp type of stuff that they're talking about.
Immigration policy.
Well, okay.
I mean, a typical American, and please, I mean, to all the American listeners out
there, I mean,
I'm not really.
But.
Typically, they're not the hardest workers.
I mean, so now you're going to be shipping off all these Mexicans and people.
People that come to the United States because they want to have a better life
and they're willing to work hard for that better life,
whether it be picking beetroots or strawberries or apples or whatever it is.
You put an ad in the paper to say an apple pick is needed because my undocumented
Mexican has had
to go back.
to Mexico City or wherever it is, you're not going to get any replies.
I mean, it's a point.
And it's not being disparaging against Americans or Mexicans or Ecuadorians or
whoever it is.
The fact is that certain people will do certain things.
And that's the way the world works.
It's called demarcation, Skulk.
And it's going to be a disaster if he gets millions of people out there over the next
couple of years.
A disaster for America.
An absolute disaster because, I mean, who's going to do the jobs?
I mean, as we sit here, the unemployment rate is 4.1 percent.
And one can argue that that 4.1 percent is pretty much people that do not want to
find a job.
I mean, so now you ship out all these immigrants,
you get this immigration policy.
A typical American citizen will say, OK,
I earned $100 last year.
And this year, they're going to increase it to $102.50, 2.5%,
because that's what their inflation aim is.
A typical American citizen now can pick and choose whichever job he wants to do
because
the people that want to do the jobs has been deported or put in a concentration
camp, whatever you want to call it.
I mean, he or she is just going to say, no, no, no, no, wait a minute, wait a
minute.
You either pay me 5%, 6%.
more because I need to do more work, or I'll just go from company A to company B.
Now, that, again, is inflationary.
You know, you've got inflation written absolutely all over it.
And then my absolute favorite, and that's the tariffs.
The tariffs, the beautiful tariffs.
They're going to be, they're going to be.
It's the most beautiful word in the English dictionary, I think he said once,
the word tariff.
I mean, come on now.
The people he's preaching to have already voted for him.
Why does he have to say these things?
Tariffs are the consequences of tariffs we need not go into.
But let me tell you, there are so many consequences.
And it's not to him that's going to worry about it.
It's the person that goes to Walmart.
Good numbers from Walmart, by the way, this week.
But it's the person with the Walmart trolley that is going to suffer over the
next year under Trump.
Yeah, no, well, Target, they reported,
and the share price pretty much slumped 17%.
So, you know, what we won on the Walmart side, we definitely lost on the
roundabouts.
But you're 100% right.
I mean, we're sitting with these tariffs that will definitely be inflationary.
And it's like I said, this is Google Maps to inflation.
straight on.
Don't even pass go.
We're going to be straight going into an inflationary environment if the Trump
trade actually comes into fruition.
So 20th of January, I think, is going to be a very important day for me because
I want to see how many and how strong is he going to come over and mention
these things, like I said, tax cuts and immigration laws and tariffs.
How strongly is he going to come over?
Because if he's going to be really, really strong,
I'm going to change my tune from we had inflation in South Africa and we'll get to
that now.
But I'm definitely going to be changing my tune from, yeah, I think we're going to be
seeing quite a few rate cuts next year to
I think we're going to see one or two.
And then brace yourself because we're most probably in the latter part of next year,
beginning of 2026,
going to start looking at the neck hiking cycle.
And boy, oh boy, I don't think it's going to be pretty this time around in actual
fact i think brace
yourself because it might look a lot worse than than
you know you know my view is on this whole rate cut thing and rate rise thing and
interest rate policy is that he
will put somebody in some patsy as the u.s treasury secretary obviously ellen's gonna
gonna have to go and she
will go uh and he will put someone in
he'll phone them up and say you've got to cut rates and the reason why because First
of all, he's a populist.
And secondly, because his so-called empire, which isn't an empire at all, it's
a crumbling edifice,
is heavily in debt, and he needs his interest rate payments to come down.
So he wants lower interest rates, never mind if inflation is at 2.5% or 5.5%.
So he will put someone in, and when he phones them up, they will do what he says.
So watch out for the new US Treasury Secretary.
Yeah, he needs...
Because if...
what you say actually had to happen and he forces interest rates to come down,
that will mean that the dollar will be under the most pressure.
And we know, we've heard him say that he feels the dollar is way too strong.
He wants the dollar to be quite a bit weaker.
And why?
I mean, you can't bring in these tariffs.
And because a stronger dollar would just sort of just.
to neutralize these tariffs.
So I think you're right.
Then we'll see a much weaker dollar.
And I think that's a dangerous trade, really, really dangerous trade.
I don't know.
I just get a very, very uncomfortable feeling as I'm sitting here.
And then while we're sitting here, as you mentioned,
we've got the outgoing president standing in the Amazon and saying, guys, we're
going to be...
Yeah, you can take all our crown war jewels, Lord of War, and then, I don't
know if you've seen the clip,
then he ends off and he turns around and he starts walking into the forest.
He's probably still walking.
Did he go the wrong way again?
He's done that before.
No shame.
The forest.
Anyway.
I think that Joe Biden is basically saying that I'm only in here for another couple
of weeks.
Let me stuff.
Trump up a little bit because he's going to have to reverse all these policies.
So he said, you can send your missiles wherever you like.
You can have these anti-personnel landmines, which he's just approved as
well, and to hack off
Putin because then Trump will have to rebuild the extraordinary relationship he
has with Putin.
And that's it.
I'm sure it's just spite.
I'm absolutely certain of it.
Let's have a look at the JSC today.
And the one thing that stands out is a company that you and I both have dealings
with.
It's 91.
The share price is up a couple of percent.
Let me ask you this question.
You have to ask me honestly.
Would you choose 91 or would you choose an S&P combined with a JSC
ETF tracker, for example?
What is the difference between buying 91 and buying the two products that I just
mentioned?
The pros and the cons of both.
That's a poser for you.
I mean, okay, so firstly, why choose?
I mean, as a wealth manager.
I don't need to choose.
I can use them all three.
And in a lot of circumstances, it's great to use them all three.
Well, I'm asking you to choose.
That's why I'm just saying if you had the choice of the two and you're not allowed
to have all three, which one would it be?
Would it be the two ETFs or would it be 91?
I would still use 91.
I mean, I know, I mean, these are people that previously I've worked with, this is
people that I've,
you know, I mean, 91 basically is the year this company started.
1991.
Yeah, the year we started this company, I saw this company being born, how this
company has grown, and it is a wonderful.
wonderful company i can say this because i'm not invested and i can say it as well
and even though that they've supported me over the years it really
is an amazing company and the reason i say that i mean apart from their performances
and everything and the wealth that they've
created is that they retain their staff i
mean i'm talking to people today that i was speaking to a dozen years ago no
they do i mean i mean look at the fund managers in those i mean
I'm not even going to name names because then people are going to think I'm just
name dropping.
But you can look at these fund managers, head fund managers in their teams.
This is individuals that have been managing funds.
I mean, Bicard.
I was going to say Bicard, yeah.
Look at him.
He's in New York now, but he's still a 91 person through and through.
Client research.
I mean, you can call all of them.
I mean, the individual says… been with the company for many, many years.
But I mean, yeah, I mean, you mentioned it, you know, the results today, nothing
really new.
And why I'm saying this, because they guided very, very well.
We know that they've had some serious outflows.
So net assets has grown,
but there's been some serious outflows during this period.
The big surprise today.
And this, I mean, immediately when I saw this announcement, I started
calling around because i didn't i mean i didn't get it even get a whiff of this and
i started calling around some of my old
colleagues and friends and i said well did you did you had any idea and everybody
said this was the
best kept secret under the sun and that that is sun
long basically all the active managed yes goes to 91.
yeah and that's 400 billion rands worth of assets
That's now going to be transferred to 91.
So everything that we've had in the trading updates recently by saying, well,
we have these major outflows, or we had quite a bit of outflows,
now sort of just been neutralized with this one, let's call it, announcement
today.
That is, I would say, a very, very big announcement.
And I think for a company like Asanlam to feel that, well,
they're active management.
is going to be in better hands being in 91 than trying to do it in us.
I mean, that sort of answers your first question, what would I choose?
I mean, even Sunlum said, well, if we want somebody to actively manage funds,
we will put it in 91.
There's a little bit of a but.
The big but is Sunlum naturally said, well, they're going to keep their
passives.
So they're going to be growing their passives as well.
And for the listeners out there, don't know the passives.
When you see anything Satrix, that is Sanlam as well.
So they're going to be keeping the passive side, the Satrix side,
but all the actives will be now, in the future, be managed.
It's a huge story, and as you quite rightly say, in a very leaky financial
services world in South Africa,
to have kept this a secret.
Congratulations to both sides.
And what a coup for 91. And well done to Sanlam to say, look, put my hands up.
We haven't got the skills and we're going to give it to you.
We think you can do better.
So well done.
And that's one of the reasons why the share price has done so well today.
Scalp, let's have a look at the markets now.
The RAND, that's okay.
That's actually pretty good.
18.12 against the US dollar.
British pound against the RAND is 22.93.
And the Euro RAND is 19.08.
Eurodollar is 105.25, the British pound against the US dollar is 126.55,
the gold price 26.46.
Was I looking at this last week and it was $100 lower than that, 25.50 or something?
Anyway, whatever it is, it's up $19 today to 26.46.
Platinum price still mired in three figures at $9.67 an ounce, which is down
$6.
And Palladium has regained four figures.
At 10.20 in the last few days.
At 10.21, which is down 14, though.
Other commodities, Brent crude oil, $73.68, which is up half a percent.
And West Texas crude, 69.38, which is up 0.2 percent.
Copper up half a percent.
What else have we got here?
Anything interesting?
No, not really.
The S&P 500 futures market was looking today at the high for the year.
6,053 was the high for the futures.
December futures currently 5,888, down nearly 1%, which is,
you know, Trump won't like that.
The South African 10-year is 9.30%.
The U.S. 10-year Treasury bond yield is 4.40%.
And Bitcoin, which has had an astonishing time,
is now 94,637, up 2.4%,
at an all-time record high, as we...
And speak, Skull, the Bitcoin trade is amazing, isn't it?
If a client comes to you and says, look, here's my portfolio.
I've got 10 million to give to you at PSG Wealth Older.
Would you say, yeah, let's put a bit into Bitcoin if they asked you to do so?
No, I don't.
I haven't done it.
I will most probably not do it anytime soon until it's probably properly,
properly.
I'm not talking about these worse than things, you know.
moving towards when it's properly regulated um then then naturally i will
be looking at it and but but anything i mean usually when something sounds too
good to be true it often is
and you just mentioned it we're approaching a hundred thousand dollars per
bitcoin you know this conversation a few
weeks ago when we say yeah it's most probably on its way again to sixty
thousand dollars and we
know if we're going to take the clock back
three four years ago it was trading at four or five thousand dollars per bitcoin
so a year and a half ago it was fifteen
thousand now look at it six times higher more than six times higher so so how i
mean as a wealth manager i'm
really going to be struggling you know putting putting a lot of my clients
even even if it's well regulated into something that can go from 15,000
US dollars to 100,000 US dollars in a matter of a year.
When you can't actually say, when you say to someone who's invested in it, most
people, I would say,
why are you investing in it?
And they'll say, well, because it's going up.
I mean, I don't know, the South Sea bubble and all sorts of other bubbles over
centuries.
The tulip bubble in the Netherlands, for example.
Why are you buying a tulip?
Because the price is going up.
Do you think that will happen?
Do you think it has the potential?
but one day people say no it's got no use whatsoever it uses too much energy to
produce the
the blasted things and all the encryption and all that sort of thing do you think
one day it will be one of the biggest um
financial disasters ever or do you think that we are being too pessimistic i
i do think it's got the the the possibility um of being one of the the
worst financial
disasters yes i do think it can happen i mean if you if you read what's happened
with the old tulip mania of the
1600s. I mean, there's not a major difference between the two.
You're quite right.
No one needs a tulip bulb.
No.
What are you going to do with it?
But, okay, be that as it may, we're living in very, very difficult times.
I mean, we know that there's quite a few countries that's got sanctions on them.
These guys can't trade in, for instance, Russian rubles.
So what do they trade in?
They go and buy Bitcoin.
And they can merrily, merrily continue doing business as usual.
Yeah, well done to Ecuador.
I think it's Ecuador, isn't it?
That was the first country that the huge reserve bank said, look,
we are going to invest in this almost as not an asset of national reserve
to support the...
the country but for goodness sake that was around about 15 20 000 when they decided
to do that so they've made five times their money
almost
yeah yeah no for sure for sure but because it's um yeah it's it's always i mean
naturally any everyone feels one of the kids call it fomo the fear of missing out
i mean we all we all feel
fomo when when something goes up especially
if it's something as well known as a thing called a bitcoin um but i i i don't know i
just when whenever i look at something and i think man
this could really end in tears yeah then i'll mess out gladly i'll mess out gladly
i can tell
you something as you get older skunk which we all are every single day we've got
older since we first started speaking 15 minutes ago
the fomo factor disappears you say someone's made some money good good luck
to you i hope it makes you happy
that's what i always say to people did you buy this did you buy that no i didn't i
did i said well good luck mate well
done spend it wisely
your profits that is on the jsc today we buy cars i can't even bring myself to say
that name for a company
anyway it's up nearly five percent pick and pay up four and a half percent a
sassel up four percent we've spoken about that company
so many times just below 97 rand a share tfg used
to be called for sheening up 3.7 percent and could buy an or at 3.4 percent on the
downside the ones that i can
recognize northam's down 1.8%, SAPPY down 1.8% as well,
1.7% down for Bytes, and DRD Gold down 1.6%.
Do you think gold's running out of steam, Skulk?
No, no, not at all.
I don't think so.
Lindsay, I mean, we started off this conversation talking about Trump trade,
and we will be ending this conversation.
I mean, when you look at his first term as president of the United States in 2016,
that period between...
2016 and 2020, the gold price increased by 69% in his first term.
Do I think the second verse will sound like the first?
Yes, I do think so because naturally I mean we're talking about a guy that's
already saying, well,
we're going to do tax cuts.
We're going to do immigration.
We're going to do these tariffs.
Effectively, he's not going to be reducing the U.S.
debt.
He's going to be increasing the U.S.
debt.
And man, oh man, do I mean just go
draw a graph just go draw a graph the debt to well u.s debt to gdp or what they call
it
public u.s public debt to gdp what is it now what's the percentage over 100 percent
120 percent and remember when he started office 2016 was 98
and we know how frowned upon uh everybody was two weeks ago when when when it came
out that the uk is trading at 98 percent
uh public debt to gdp but leave that 120 we know he's going to be increased but
just take that graph just go say public
debt to gdp add the gold price
on the exactly same graph and draw it out over 20 years and man then you tell me you
don't
think the gold price will will continue running as he merrily increase the debt of
the u.s okay so let's say it goes up
60 70 what's 60 of the current level of 2650 that's another what
1500 on the top So this thing is going to $4,000 to $5,000 per ounce,
according to your calculations.
No, no, no, no, no.
I think you might be putting words in my mouth.
I mean, you're asking.
What do you mean?
You just said when he was first in office, the price went up 69%.
And you're talking about a replication of that performance.
So, yes, I do think we're going to see a similar trajectory.
I mean, and I think what we've seen.
in the gold price over the past, let's call it, remember,
gold price was started this year at $2,000.
I mean, it's now trading, you know, $2,600 and something.
25% higher, yeah, more than that.
A lot of these stuff we just mentioned has really now been priced in.
But I don't want to call it, I like to lean on people that's way more intelligent
than I am.
We just had Goldman Sachs that came out.
I think it was two, three days ago, where they mentioned, well, they see a world
price anything between
$70 and $85.
That doesn't sound too weird.
But they're seeing a gold price over $3,000 by December next year.
I think that's rather conservative, actually.
I do think so.
Time-wise, anyway.
So will I be selling my gold anytime soon?
We'll know.
No, you won't.
You'll be adding.
on any dips i would imagine give us the closing jsc indices and the value traded
if you would scalp low
so the jsc closed today at 85 275 points that is a beautiful i can quote my
student incoming president a beautiful 90 basis points in the green today the jc top
40
also closed 84 basis points positive while
the resources were up 93 basis points industrials up 65 basis points with the
financials doing doing really really
well one point two two percent and even the sap
property index they were positive today uh in this in the case of 0.23 percent when
we look at the
the current uh well let's just cover the value trade value trade today just have 20
billion traded on the jsc
so that's
19.5 not too bad but we still want to see it you know suppose that it's called a 20
billion mark and i think the one
you mentioned at the the the s p 500 yes s p 500
did recover somewhat some of its its early losses now trading you know 60 basis
points negative nasdaq down 80
basis points and the dow jones are now just shy just shy of going into positive
territory did i ask you this last week
and the question is have you had your christmas party yet and
if not when is it and where are you going okay so so we had this we'll keep this
quiet i'm sorry my short-term memory uh lost
he's trying me another conversation where just by the way whatever you remember yeah
whatever your name is
oh man oh man we are getting old lindsay we are getting old but we're getting
better it's like red wine okay
good scalp thank you very much your time as always scalp glow is a portfolio
manager at psg wealth old oak in cape town and
that was the five o'clock shadow The views and opinions expressed in these podcasts
are those of Lindsay Williams and
various contributors and do not reflect the policy, position or opinion of any
other agency, organisation,
employer or company associated with StrictlyBusinessPodcast.com.
Assumptions made on the analyses are not reflective of the position of any other
entity other than the speaker or the author.
And since we are critically thinking human beings, these views are always subject to
change, revision and revision.
and rethinking at any time.
Please do not hold us to them in perpetuity.