WEBVTT 1 00:00:00.404 --> 00:00:04.568 You're listening to Strictly Business Podcast with Lindsay Williams. 2 00:00:05.349 --> 00:00:08.932 JSC has closed its doors for another day, so it's time for the 5 o'clock shadow. 3 00:00:09.252 --> 00:00:15.738 And as always on a Wednesday, I speak to Skulk Lowe, Portfolio Manager at PSG 4 00:00:15.738 --> 00:00:17.738 Wealth Old Oak in Cape Town. 5 00:00:17.738 --> 00:00:19.201 Now then, Skulk, I was watching a programme the other day. 6 00:00:19.261 --> 00:00:25.227 I think it was the BBC Business News, actually, in the morning, and the chap was 7 00:00:25.227 --> 00:00:27.227 saying it could even go to 3,000 today. 8 00:00:27.227 --> 00:00:29.227 And you know what I'm talking about. 9 00:00:29.227 --> 00:00:31.227 talking about gold. 10 00:00:31.227 --> 00:00:33.227 It was something like 2940, 2950. 11 00:00:33.227 --> 00:00:33.766 And obviously it's pulled back since then, understandably. 12 00:00:34.106 --> 00:00:35.527 But he made a couple of good points. 13 00:00:35.527 --> 00:00:41.432 He said that with the tariffs that Trump is implementing on certain metals, 14 00:00:42.133 --> 00:00:44.775 gold may also suffer because of that. 15 00:00:44.835 --> 00:00:49.979 So there's been an enormous amount of interest from the United States to import 16 00:00:49.979 --> 00:00:51.979 gold. 17 00:00:51.979 --> 00:00:53.162 And that sort of caused a little bit of a squeeze. 18 00:00:53.542 --> 00:00:55.844 Now, obviously, that was grossly exaggerated. 19 00:00:55.944 --> 00:01:02.908 but on the other hand he also said that the people that are buying gold at the 20 00:01:02.908 --> 00:01:04.908 moment proper buyers long-term holders 21 00:01:04.908 --> 00:01:09.872 and gold is not behaving as it normally does would you agree with any of those 22 00:01:09.872 --> 00:01:11.872 comments i i agree with all of those 23 00:01:11.872 --> 00:01:13.073 comments i mean it's it's the strangest year i 24 00:01:13.093 --> 00:01:19.977 mean yes so you you're 100 right i mean we're sitting with with uh and we're going 25 00:01:19.977 --> 00:01:21.977 to touch on on the miners a little 26 00:01:21.977 --> 00:01:24.860 bit later but gold itself yesterday taking a bit of a breather but you can i mean 27 00:01:25.936 --> 00:01:32.239 We're coming out of a week or two where literally every single day when I put on 28 00:01:32.239 --> 00:01:34.239 my new service, 29 00:01:34.239 --> 00:01:37.121 one of the first things that pop up is gold reaching new all-time highs. 30 00:01:37.201 --> 00:01:38.842 Gold reaching new all-time highs. 31 00:01:38.842 --> 00:01:44.744 And as we get closer to this magical 3,000 mark, it's sort of popping up. 32 00:01:44.844 --> 00:01:46.785 Gold getting close to 3,000 mark. 33 00:01:46.785 --> 00:01:49.086 And it feels like yesterday, and it's not too long ago, 34 00:01:49.726 --> 00:01:54.108 but it feels like yesterday when we had this conversation with Gold. 35 00:01:54.268 --> 00:01:56.029 touching on those $2,000 mark. 36 00:01:56.590 --> 00:01:59.271 And we asked ourselves, are we going to surpass that again? 37 00:01:59.291 --> 00:02:02.073 Are we going to actually move beyond the $2,000 mark? 38 00:02:02.113 --> 00:02:03.234 Well, we know the answer now. 39 00:02:03.915 --> 00:02:07.917 We've gone beyond it and now flirting with $3,000. 40 00:02:08.137 --> 00:02:12.560 It might well be, sorry to interrupt you, it might well be that there's some 41 00:02:12.560 --> 00:02:14.560 optionality going on here. 42 00:02:14.560 --> 00:02:17.544 And the 3,000 level and levels between now or 29, 15, 3,000, 43 00:02:17.824 --> 00:02:20.806 the people that have written options are protecting it somewhere. 44 00:02:20.826 --> 00:02:23.908 I don't know, that does happen when you get these big round numbers sometimes. 45 00:02:25.076 --> 00:02:27.177 You know, there's so many reasons. 46 00:02:27.257 --> 00:02:33.121 We know that China's now given sort of the go-ahead for the pension funds or people's 47 00:02:33.121 --> 00:02:33.220 pension 48 00:02:33.220 --> 00:02:35.482 funds to invest in gold as well. 49 00:02:35.482 --> 00:02:37.843 So there's many, many moving parts. 50 00:02:37.883 --> 00:02:40.405 But, I mean, you said it earlier. 51 00:02:41.265 --> 00:02:45.468 It's a strange, strange market because we went into this year. 52 00:02:46.428 --> 00:02:48.930 We knew that Trump was taking office. 53 00:02:49.270 --> 00:02:52.232 There is, what is it, acceptance speech. 54 00:02:52.612 --> 00:02:56.594 It would have been he started on the 20th, and everybody was looking at the 20th of 55 00:02:56.594 --> 00:02:56.693 January. 56 00:02:56.914 --> 00:03:01.636 And as we get close to this 20th of January, we saw the dollar just 57 00:03:01.636 --> 00:03:03.636 skyrocketed. 58 00:03:03.636 --> 00:03:08.098 I mean, it went from the Dixie or the dollar index went from around about 100 59 00:03:08.098 --> 00:03:10.098 points six months ago 60 00:03:10.098 --> 00:03:11.320 and went beyond the 109 levels. 61 00:03:11.460 --> 00:03:13.561 And over that period, 62 00:03:15.161 --> 00:03:21.264 you would expect with that type of dollar strength that the gold would should, in 63 00:03:21.264 --> 00:03:23.264 theory, it should weaken. 64 00:03:23.264 --> 00:03:25.264 But it didn't. 65 00:03:25.264 --> 00:03:26.810 It actually merely ran with the dollar that it improved. 66 00:03:26.810 --> 00:03:32.432 And then the dollar took a bit of a breather and the gold kept on running. 67 00:03:32.452 --> 00:03:37.695 And now the dollar is running again for the past few days and gold is running with 68 00:03:37.695 --> 00:03:38.094 it. 69 00:03:39.955 --> 00:03:42.216 The dollar can be considered a safe haven. 70 00:03:42.577 --> 00:03:49.219 And also, especially after what Jerome Powell said, he said he's in no hurry to 71 00:03:49.219 --> 00:03:51.219 cut interest rates because the U.S. 72 00:03:51.219 --> 00:03:53.219 economy is still doing well. 73 00:03:53.219 --> 00:03:53.609 But if the dollar is a safe haven, 74 00:03:53.649 --> 00:04:00.592 then gold has regained that safe haven legend that it had so many years ago when 75 00:04:00.592 --> 00:04:02.592 both you and I started in the business. 76 00:04:02.592 --> 00:04:04.592 I agree. 77 00:04:04.592 --> 00:04:06.592 I agree. 78 00:04:06.592 --> 00:04:07.595 It's definitely taken that safe haven status back. 79 00:04:08.555 --> 00:04:15.518 You can see people are not buying into the we're going to get inflation down to the 80 00:04:15.518 --> 00:04:15.698 lowest 81 00:04:15.698 --> 00:04:16.538 levels ever. 82 00:04:17.339 --> 00:04:18.219 They're not buying that. 83 00:04:19.139 --> 00:04:20.280 I'm trying to do my best. 84 00:04:20.480 --> 00:04:26.962 I know you can do a very, very good Donald Trump, but it's not going to get it there. 85 00:04:26.962 --> 00:04:33.344 I mean, unfortunately, not what I'm seeing currently, not when you had a January 86 00:04:33.344 --> 00:04:35.344 where, 87 00:04:35.344 --> 00:04:37.344 well, what was it? 88 00:04:37.344 --> 00:04:40.726 We had most of the, well, 6%, 7% growth in gold. 89 00:04:41.006 --> 00:04:46.148 All the PGMs were also around about the 8%, 9% higher. 90 00:04:46.708 --> 00:04:47.408 Copper. 91 00:04:47.408 --> 00:04:53.348 copper trading seven seven odd percent higher and and and um uh january 92 00:04:54.089 --> 00:05:00.693 brent where most of the research report indicated in december let's go to november 93 00:05:00.693 --> 00:05:02.693 december all these big 94 00:05:02.693 --> 00:05:05.297 financial houses they had concerns that they said well we should go into into 95 00:05:05.297 --> 00:05:11.668 2025 and and the oil should be Ah, it should be under pressure, 96 00:05:11.688 --> 00:05:12.649 but it should stay low. 97 00:05:12.669 --> 00:05:18.252 We should see it between the, let's call it $60 and $70 levels. 98 00:05:18.752 --> 00:05:20.653 Well, surprise, surprise, we're not there. 99 00:05:21.214 --> 00:05:22.334 We're struggling to keep it. 100 00:05:22.574 --> 00:05:24.596 I was one of those oil bears, by the way. 101 00:05:25.276 --> 00:05:25.976 I really was. 102 00:05:25.976 --> 00:05:30.859 I thought it was going to $40, $50 per barrel, but it's stubbornly, stubbornly 103 00:05:30.859 --> 00:05:30.899 high. 104 00:05:30.899 --> 00:05:37.062 And I think that's because the US economy is still doing well and China is 105 00:05:37.062 --> 00:05:39.062 constantly threatening to do well as well. 106 00:05:39.062 --> 00:05:44.833 So it's not at a point where I think any of the US government, 107 00:05:45.053 --> 00:05:47.854 President Trump or any of those people are having sleepless nights. 108 00:05:47.914 --> 00:05:51.935 But still, we're looking at a Brent level that's above the $76, 109 00:05:52.115 --> 00:05:57.836 $75 per barrel level, flirted with the $80 just a few days ago. 110 00:05:57.936 --> 00:06:04.298 So I would just say I don't think if you look at the CRB commodity index in 111 00:06:04.298 --> 00:06:04.418 general, 112 00:06:04.918 --> 00:06:07.599 reaching not new highs, but just. 113 00:06:08.307 --> 00:06:09.528 Powering recent highs. 114 00:06:09.528 --> 00:06:10.408 Yeah, I'm looking at it now. 115 00:06:10.928 --> 00:06:12.249 It's a new recent rise, yeah. 116 00:06:12.249 --> 00:06:13.369 Exactly, recent highs. 117 00:06:13.849 --> 00:06:14.970 And it's powering ahead. 118 00:06:15.290 --> 00:06:17.411 And I'm asking myself, what's going to stop this? 119 00:06:17.891 --> 00:06:18.591 Tariffs? 120 00:06:18.591 --> 00:06:19.011 No, no, no. 121 00:06:19.011 --> 00:06:20.732 Tariffs are actually going to exact you at this. 122 00:06:20.752 --> 00:06:25.915 This is going to actually sort of put a bigger spotlight on that. 123 00:06:26.015 --> 00:06:28.656 I mean, are we going to see any of these, 124 00:06:30.036 --> 00:06:34.458 let's call it policies that Trump is trying to implement that's going to make 125 00:06:34.458 --> 00:06:36.458 any changes? 126 00:06:36.458 --> 00:06:38.458 I don't think so. 127 00:06:38.458 --> 00:06:40.458 So. 128 00:06:40.458 --> 00:06:41.016 Yeah, gold's historic has always been one of the best, 129 00:06:42.177 --> 00:06:47.978 let's call it defensive players or hedges against an inflation problem. 130 00:06:48.438 --> 00:06:49.859 Yes, good. 131 00:06:49.919 --> 00:06:51.159 And inflation is stubborn. 132 00:06:51.739 --> 00:06:54.100 What was the CPI this afternoon, Skelton? 133 00:06:54.100 --> 00:06:56.461 I'm sorry, the US CPI was today, wasn't it? 134 00:06:57.321 --> 00:06:58.861 It did. 135 00:06:59.202 --> 00:07:01.882 Where did it come in? 136 00:07:01.882 --> 00:07:03.963 So what we had is year-on-year consensus. 137 00:07:05.184 --> 00:07:08.106 was that it should be run about the 3.1 levels. 138 00:07:08.126 --> 00:07:13.990 We know last time it was 3.2% levels, and it actually came out higher. 139 00:07:14.791 --> 00:07:15.491 It came out... 140 00:07:15.491 --> 00:07:17.193 Sorry, man, I'm looking at core inflation. 141 00:07:17.693 --> 00:07:19.074 Core inflation came out 3.3. 142 00:07:19.134 --> 00:07:25.619 So if you look at the normal inflation, again, 2.9 last time, previous. 143 00:07:25.859 --> 00:07:30.383 It was forecasted that it should come out at 2.9, and it came out at 3%. 144 00:07:30.483 --> 00:07:31.183 So... 145 00:07:31.343 --> 00:07:32.484 I don't think people say this. 146 00:07:32.564 --> 00:07:33.364 It's being stubborn. 147 00:07:33.404 --> 00:07:35.266 People say sticky, but I prefer stubborn. 148 00:07:35.706 --> 00:07:36.406 Yeah. 149 00:07:36.406 --> 00:07:36.746 Correct. 150 00:07:36.746 --> 00:07:38.087 And that's where gold comes into its own. 151 00:07:38.147 --> 00:07:38.847 Yeah. 152 00:07:38.847 --> 00:07:41.609 And that's why Jerome Powell cannot cut interest rates at the moment. 153 00:07:42.029 --> 00:07:43.550 And also because of the strong economy. 154 00:07:43.610 --> 00:07:44.310 There we go. 155 00:07:44.431 --> 00:07:45.491 So there's your explanation. 156 00:07:45.772 --> 00:07:47.312 Talking about gold, what about the miners? 157 00:07:47.312 --> 00:07:52.455 I noticed Harmony and DRD Gold came out with numbers today and the market not 158 00:07:52.455 --> 00:07:52.535 liking them. 159 00:07:52.736 --> 00:07:56.238 Oh, that's obviously something to do with gold being down $21 an ounce. 160 00:07:56.578 --> 00:07:58.379 But maybe a combination of the two? 161 00:07:59.423 --> 00:08:01.225 Yeah, Pan-African Resources as well. 162 00:08:01.225 --> 00:08:02.185 They also came out with that. 163 00:08:02.185 --> 00:08:03.006 8% weaker. 164 00:08:03.006 --> 00:08:04.327 I saw that one, yeah. 165 00:08:04.968 --> 00:08:05.668 Yeah. 166 00:08:05.668 --> 00:08:08.851 Yeah, so I just think production, that's the big problem. 167 00:08:09.892 --> 00:08:13.955 I had this conversation with my team the other day, and they said, well, that's the 168 00:08:13.955 --> 00:08:14.215 problem. 169 00:08:14.215 --> 00:08:19.339 Most of these mines are really struggling to reach optimal production levels. 170 00:08:19.840 --> 00:08:23.302 If you look at a gold price run about to $3,000 levels, 171 00:08:23.823 --> 00:08:28.727 you would like to see these miners pretty much mine. 172 00:08:28.987 --> 00:08:31.348 gold 25 hours a day. 173 00:08:31.588 --> 00:08:33.510 I mean, that's what you expect them to do. 174 00:08:33.930 --> 00:08:35.010 They unfortunately can't. 175 00:08:35.030 --> 00:08:37.011 They're struggling, struggling to keep up with the production. 176 00:08:37.011 --> 00:08:37.932 It's sort of a chicken and egg. 177 00:08:38.812 --> 00:08:41.534 With most of the mines having production problems, 178 00:08:41.854 --> 00:08:47.277 that's sort of just helping the demand side and not helping the supply side. 179 00:08:47.277 --> 00:08:50.079 So, yeah, so that's the one side. 180 00:08:51.079 --> 00:08:57.623 We do see that most of these mines are still doing extremely well, Harmony, year 181 00:08:57.623 --> 00:08:57.723 to date. 182 00:08:58.431 --> 00:08:59.131 Listen to this. 183 00:08:59.131 --> 00:09:04.694 I mean, we're sitting on the 12th of February, and this is up to yesterday. 184 00:09:04.734 --> 00:09:07.415 So this is one month and 11 days. 185 00:09:07.895 --> 00:09:13.438 So we've got Angler Gold up 44.4%. 186 00:09:13.438 --> 00:09:18.240 Goldfields up 42.5%. Just reiterate that. 187 00:09:18.920 --> 00:09:21.301 Plus 40% in what time period? 188 00:09:21.781 --> 00:09:25.983 That is 1 January 2025 up to yesterday's close. 189 00:09:26.147 --> 00:09:29.748 I thought you were talking about January 2024 from that. 190 00:09:29.828 --> 00:09:30.908 That's extraordinary. 191 00:09:31.769 --> 00:09:32.669 It's crazy. 192 00:09:32.669 --> 00:09:33.369 It's crazy. 193 00:09:33.489 --> 00:09:36.070 And then in Harmony, I know you like your Harmonies. 194 00:09:36.490 --> 00:09:40.211 Harmony, 45.4% year-to-date up to yesterday. 195 00:09:40.231 --> 00:09:42.332 So it's crazy, crazy levels. 196 00:09:42.372 --> 00:09:44.733 But I had a look. 197 00:09:45.153 --> 00:09:46.133 I had a look last night. 198 00:09:46.153 --> 00:09:52.695 Now, there's two great indicators, and it's actually ETFs you can follow. 199 00:09:53.847 --> 00:10:00.712 um exchange traded funds so so the one is etn is gld that's the most famous famous i 200 00:10:00.712 --> 00:10:00.932 would say 201 00:10:00.932 --> 00:10:07.657 etn in the world that's the gold gold etf that's where you want to buy the pure gold 202 00:10:07.657 --> 00:10:09.657 in dollar terms and that 203 00:10:09.657 --> 00:10:14.482 just tracks tracks that that the dollar dollar index if it's if it's trading if 204 00:10:14.482 --> 00:10:16.482 the dollar is trading at three thousand 205 00:10:16.482 --> 00:10:19.609 dollars that's pretty much you know what the gld will should be doing If you look 206 00:10:19.609 --> 00:10:21.609 at that graph, 207 00:10:21.609 --> 00:10:22.250 and I know you love your graphs, Lindsay. 208 00:10:22.250 --> 00:10:26.952 I mean, naturally, because it's reaching new all-time highs every day, 209 00:10:27.452 --> 00:10:32.234 it's no surprise that GLD is also naturally reaching new all-time highs. 210 00:10:32.474 --> 00:10:33.695 You could see it somewhat. 211 00:10:34.015 --> 00:10:40.858 I mean, according to some of these technical indicators, the RSI's and those 212 00:10:40.858 --> 00:10:42.858 kind of things, it's somewhat overboard. 213 00:10:42.858 --> 00:10:44.858 When I say somewhat, it is overboard. 214 00:10:44.858 --> 00:10:47.760 But when I look back at gold, when it sort of… go crazy. 215 00:10:47.980 --> 00:10:53.783 It goes really crazy and stays overboard sometimes for very, very long. 216 00:10:54.103 --> 00:10:55.243 But that's where I want to get you. 217 00:10:56.224 --> 00:11:01.526 So the next indicator is what they call the GDX or the gold miners 218 00:11:03.107 --> 00:11:07.889 ETF. That's where they take all the miners in the world or biggest miners. 219 00:11:07.969 --> 00:11:09.069 So it's an international index. 220 00:11:09.129 --> 00:11:10.850 It's not just US gold miners. 221 00:11:10.850 --> 00:11:11.890 Yeah. 222 00:11:12.270 --> 00:11:13.011 No, it's international. 223 00:11:13.031 --> 00:11:15.192 So you've got your Barrick Golds. 224 00:11:15.232 --> 00:11:19.673 You've got you've got your Wheatons, you've got all the biggest mines in the 225 00:11:19.673 --> 00:11:20.053 world. 226 00:11:20.053 --> 00:11:24.595 And funnily enough, in the top 10, Anglo Gold and Goldfields also find themselves 227 00:11:24.595 --> 00:11:26.595 in the top 10, you know, largest mines. 228 00:11:26.595 --> 00:11:31.318 But if you take that same grove, it's not even close to reaching new all-time highs. 229 00:11:31.358 --> 00:11:36.080 In actual fact, I think there was two or three periods over the past five years 230 00:11:36.080 --> 00:11:38.080 where we'd 231 00:11:38.080 --> 00:11:40.322 actually surpassed the current levels or traded higher than current levels. 232 00:11:40.582 --> 00:11:44.463 So one or two things, you know, are happening here. 233 00:11:44.463 --> 00:11:45.444 So the one is... 234 00:11:45.868 --> 00:11:46.568 Mr. 235 00:11:46.568 --> 00:11:50.972 Market is telling us, wait a minute, the gold price is not going to stay at these 236 00:11:50.972 --> 00:11:52.972 current levels. 237 00:11:52.972 --> 00:11:54.295 We're lurking through this hype. 238 00:11:55.016 --> 00:11:59.499 Sooner or later, we're going to start seeing the dollar stabilize, 239 00:11:59.519 --> 00:12:06.005 most probably strengthen a little bit with all these wonderful tariffs and policy 240 00:12:06.005 --> 00:12:08.005 studies that it's going to implement. 241 00:12:08.005 --> 00:12:11.549 And then we should see the dollar, the gold price retrace again, 242 00:12:12.110 --> 00:12:14.652 which will sort of bring this in sync again. 243 00:12:15.140 --> 00:12:18.761 The other one is they just lagged. 244 00:12:18.861 --> 00:12:24.323 I know a lot of people said, Skoll, but you need to look at the all-in cost for 245 00:12:24.323 --> 00:12:26.323 these mines. 246 00:12:26.323 --> 00:12:31.565 You know, when these mines really, they didn't stay with inflation, for instance. 247 00:12:32.565 --> 00:12:37.447 They've actually outgrown the pace of the all-in cost, 248 00:12:37.587 --> 00:12:41.168 outgrown the pace that the gold price actually has grown with. 249 00:12:41.868 --> 00:12:42.568 Yeah. 250 00:12:42.568 --> 00:12:48.211 I know that, but this is nothing strange because if you look at it for the past, 251 00:12:48.211 --> 00:12:50.211 let's call it 20, actually 30 years, and 252 00:12:50.211 --> 00:12:51.913 I took some of these miners where I look at their all-in cost. 253 00:12:52.413 --> 00:12:58.056 And every time you see the gold price pop, for that, let's call it three, 254 00:12:59.217 --> 00:13:00.858 sometimes six quarters, 255 00:13:02.079 --> 00:13:06.681 you will see three to six quarters. 256 00:13:07.221 --> 00:13:10.423 You will see that all-in cost really pop as well. 257 00:13:10.423 --> 00:13:11.944 When I say pop, it just goes crazy. 258 00:13:13.285 --> 00:13:19.927 and that's just because and we've seen it today with with most of these miners 259 00:13:19.927 --> 00:13:21.927 trading updates they want to 260 00:13:21.927 --> 00:13:26.811 literally give every single person in a one kilometer radius they want to give 261 00:13:26.811 --> 00:13:28.811 them a pick 262 00:13:28.811 --> 00:13:33.594 or they want to give them a shovel they just need that gold to be distracted out 263 00:13:33.594 --> 00:13:35.594 of the ground 264 00:13:35.594 --> 00:13:39.196 25 hours a day that's what they want to do and they're happy to incur these extra 265 00:13:39.196 --> 00:13:41.196 costs you 266 00:13:41.196 --> 00:13:44.908 And I'm sort of exaggerating with giving everyone a pick because they invest in... 267 00:13:44.908 --> 00:13:47.129 No, you've got to make hay while the sun shines, in other words. 268 00:13:47.129 --> 00:13:53.714 You've got to take advantage of these because we know, even though you're 269 00:13:53.714 --> 00:13:55.714 bullish, and even though it seems that nothing can go wrong, 270 00:13:55.714 --> 00:13:55.715 something will go wrong eventually. 271 00:13:55.775 --> 00:13:57.556 So you've got to take advantage of it. 272 00:13:57.817 --> 00:13:59.378 And that's where hedging comes in, of course. 273 00:13:59.658 --> 00:14:01.059 Maybe people are saying, that's it. 274 00:14:02.820 --> 00:14:04.201 Look at a 10-year graph of gold. 275 00:14:04.241 --> 00:14:06.102 We're nearly at 3,000, for goodness sake. 276 00:14:06.443 --> 00:14:08.344 Let's put in a 30%, 40% hedge. 277 00:14:08.824 --> 00:14:13.587 Let's get those futures or those options sold and see what happens. 278 00:14:13.667 --> 00:14:15.389 Maybe that's part of the equation as well. 279 00:14:15.469 --> 00:14:16.469 There's so many factors. 280 00:14:16.950 --> 00:14:18.010 That is part of the equation. 281 00:14:18.070 --> 00:14:24.455 But back to my all-in cost, what you've actually seen is that period, let's call 282 00:14:24.455 --> 00:14:24.634 it for that, 283 00:14:24.634 --> 00:14:25.716 when the gold price popped, 284 00:14:25.996 --> 00:14:32.680 you'll see a three to six quarter period where they actually seriously grow their 285 00:14:32.680 --> 00:14:34.680 all-in cost. 286 00:14:34.680 --> 00:14:37.784 And that is where they actually go and expand and create more capacity. 287 00:14:37.784 --> 00:14:40.426 capacity to mine this gold. 288 00:14:40.966 --> 00:14:45.729 And then what you see, suddenly you start seeing the oil cost stabilize, 289 00:14:46.129 --> 00:14:48.410 and in most of the cases actually start dropping off. 290 00:14:49.071 --> 00:14:50.751 But the gold price actually don't. 291 00:14:50.852 --> 00:14:54.574 It actually stays at these higher levels, and that's where they're actually doing 292 00:14:54.574 --> 00:14:54.813 well. 293 00:14:54.934 --> 00:14:57.535 Now we've already seen it in gold fields. 294 00:14:58.276 --> 00:15:00.237 Now I know gold fields are also a special case. 295 00:15:00.577 --> 00:15:02.738 They're struggling with that South American mines. 296 00:15:02.758 --> 00:15:05.140 They're struggling with a little thing called a chinchilla. 297 00:15:05.520 --> 00:15:11.650 Now, for the listeners out there, the chinchilla is just a beautiful, cute 298 00:15:11.650 --> 00:15:13.650 little fuzzy rat. 299 00:15:13.650 --> 00:15:14.175 I know people say it's not a rat. 300 00:15:14.936 --> 00:15:17.440 It's just a beautiful little rodent. 301 00:15:17.440 --> 00:15:19.183 What are the chinchillas doing to goldfish? 302 00:15:20.063 --> 00:15:25.364 They were pretty much having havoc around that mine, 303 00:15:25.745 --> 00:15:28.445 and it's now an endangered species around there. 304 00:15:28.485 --> 00:15:32.546 And unfortunately, in that mining area, there's so many of these chinchillas. 305 00:15:32.546 --> 00:15:35.087 Well, how can they be endangered if there's so many of them? 306 00:15:36.047 --> 00:15:37.548 Well, that's what my problem is. 307 00:15:37.568 --> 00:15:42.829 But apparently, they just sort of focus, and there's quite a few of them in that 308 00:15:42.829 --> 00:15:43.069 area, 309 00:15:43.069 --> 00:15:45.030 but not a lot in the rest of the world. 310 00:15:45.030 --> 00:15:49.451 But again, I want to be very, very careful what I say now because I love these 311 00:15:49.451 --> 00:15:49.771 little... 312 00:15:50.187 --> 00:15:51.088 Fuzzy animals. 313 00:15:53.989 --> 00:16:00.573 It looks like a, what do you call it, a rabbit without, it's just a beautiful 314 00:16:00.573 --> 00:16:02.573 little, people, 315 00:16:02.573 --> 00:16:04.573 $3,000 per ounce. 316 00:16:04.573 --> 00:16:06.573 Come on. 317 00:16:06.573 --> 00:16:08.573 Anyway, now they've been struggling. 318 00:16:08.573 --> 00:16:10.573 There's plenty of fluffy rodents around. 319 00:16:10.573 --> 00:16:10.618 Get the gold out of the ground for goodness sake. 320 00:16:12.059 --> 00:16:13.580 We are going to be hammered. 321 00:16:13.580 --> 00:16:14.440 You know that, Lindsay. 322 00:16:14.460 --> 00:16:18.603 I mean, I'm just worried my daughter's going to listen to this. 323 00:16:19.063 --> 00:16:20.784 Most probably she will ban me first. 324 00:16:21.204 --> 00:16:24.165 Anyway, but you've seen gold fields. 325 00:16:24.165 --> 00:16:31.008 They've mentioned that they went from $1,200, $1,300 per ounce. 326 00:16:31.008 --> 00:16:34.309 Of course, they're all in cost, I would say, about 18 months ago. 327 00:16:34.629 --> 00:16:40.352 And then they suddenly just started increasing to a point, that's a part of 328 00:16:40.352 --> 00:16:42.352 last year, where they actually came out and said, well, 329 00:16:42.352 --> 00:16:44.173 we're now standing at around about $2,000, $2,100. 330 00:16:44.514 --> 00:16:45.874 And everybody said, well, that's the reason. 331 00:16:45.874 --> 00:16:46.574 You know what? 332 00:16:46.614 --> 00:16:47.815 That's the reason why. 333 00:16:48.459 --> 00:16:55.444 why these mines i mean i mean you you've seen a growth in the gold price but the 334 00:16:55.444 --> 00:16:57.444 oil cost also grown 335 00:16:57.444 --> 00:17:02.529 50 now it's coming down i think it's run about the 1800 now um per ounce and with 336 00:17:02.529 --> 00:17:02.968 the 337 00:17:02.968 --> 00:17:06.791 gold price trading at close to three thousand dollars they 338 00:17:06.992 --> 00:17:13.496 are printing money they are printing printing money like most of the other 339 00:17:13.496 --> 00:17:15.496 miners out there so listeners out there i think 340 00:17:15.496 --> 00:17:20.516 homework for tonight go onto your computer find a growth Go type in GLD. 341 00:17:20.957 --> 00:17:26.300 Now, that's the gold ETN. And the other one you type in 342 00:17:26.661 --> 00:17:28.762 GDX. Which is the minus one. 343 00:17:28.942 --> 00:17:29.642 Yeah. 344 00:17:29.642 --> 00:17:30.082 Okay. 345 00:17:30.082 --> 00:17:30.403 That's the minus. 346 00:17:30.723 --> 00:17:32.164 And just go look at the two graphs. 347 00:17:32.665 --> 00:17:35.827 And I would just say, put that on your radar. 348 00:17:36.167 --> 00:17:37.648 And let's have this conversation. 349 00:17:37.968 --> 00:17:39.129 What is the correlation? 350 00:17:39.389 --> 00:17:46.354 And keep this one brief because I knew when I said let's talk about gold, I could 351 00:17:46.354 --> 00:17:48.354 go downstairs, make a cup of tea, come back up, 352 00:17:48.354 --> 00:17:50.354 and you'd still be talking. 353 00:17:50.354 --> 00:17:52.354 I didn't expect the chinchilla comments. 354 00:17:52.354 --> 00:17:56.362 But anyway, Skulk, there must be a relationship when the two performances of 355 00:17:56.362 --> 00:17:58.362 the physical gold price 356 00:17:58.362 --> 00:18:00.125 and the gold miners start to diverge. 357 00:18:00.426 --> 00:18:03.508 And one is a leading indicator, one is a lagging one. 358 00:18:03.809 --> 00:18:05.670 What's your experience and what are they doing now? 359 00:18:06.831 --> 00:18:08.573 The gold price is always the leading indicator. 360 00:18:08.593 --> 00:18:09.553 That's the first one. 361 00:18:09.553 --> 00:18:11.055 So, yeah, great correlation. 362 00:18:12.015 --> 00:18:14.437 And, again, I run a relative graph. 363 00:18:14.457 --> 00:18:15.859 I love my relative graphs. 364 00:18:15.879 --> 00:18:20.342 I put a… relative graph with a mean and a standard deviation. 365 00:18:20.342 --> 00:18:22.384 You can use one or two times standard deviation. 366 00:18:22.785 --> 00:18:29.390 And when it's seriously, let's call it when the miners seriously underperform the 367 00:18:29.390 --> 00:18:31.390 gold price to the point 368 00:18:31.390 --> 00:18:34.755 where it's touching this, let's call it, bottom of this lower standard deviation, I 369 00:18:34.755 --> 00:18:34.894 actually, 370 00:18:35.495 --> 00:18:36.817 that tickles my fancy. 371 00:18:36.937 --> 00:18:40.680 I would use that as an entry point going into the miners. 372 00:18:41.981 --> 00:18:44.183 And inversely, the same story where you get... 373 00:18:44.323 --> 00:18:51.186 the miners where they seriously outperform the gold price that's usually when you the 374 00:18:51.186 --> 00:18:53.186 hype is really at his at his highest and and i don't 375 00:18:53.186 --> 00:18:58.209 think that we'll see that now yet i think we're going to start seeing this in the 376 00:18:58.209 --> 00:19:00.209 next it's got a two to three quarters when we 377 00:19:00.209 --> 00:19:05.191 just mentioned it i mean the margins are really really well getting very good for 378 00:19:05.191 --> 00:19:07.191 the for these miners they're sitting with no debt free 379 00:19:07.191 --> 00:19:08.733 cash flow is fantastic and when these results start looking 380 00:19:08.753 --> 00:19:14.075 as good as i think they're going to start looking then you might see the inverse 381 00:19:14.075 --> 00:19:16.075 happening again anyway 382 00:19:16.075 --> 00:19:22.017 As we always do, Skulk, I was going to talk about Aspen and the PIC increasing 383 00:19:22.017 --> 00:19:24.017 its stake in Aspen to over 384 00:19:24.017 --> 00:19:26.017 21%. 385 00:19:26.017 --> 00:19:28.017 I think it is a massive stake. 386 00:19:28.017 --> 00:19:31.400 They must know something or they must have very little else to entice them with their 387 00:19:31.400 --> 00:19:33.400 huge amount of funds. 388 00:19:33.400 --> 00:19:33.541 But I'm going to go straight to the spot markets now. 389 00:19:33.541 --> 00:19:36.282 1855 is the dollar rand. 390 00:19:36.962 --> 00:19:39.763 The British pound against the rand is 23 on the noggin. 391 00:19:39.983 --> 00:19:41.163 And the euro rand. 392 00:19:41.403 --> 00:19:48.189 is 19.18 euro dollar 103.40 and the british pound is 124 against the us dollar 393 00:19:48.569 --> 00:19:53.773 right all important commodities now uh gold price down 24 000 announced now to 394 00:19:53.793 --> 00:20:00.078 2889 uh platinum 1041 which is up 15. 395 00:20:00.539 --> 00:20:07.244 uh palladium is three figures again 983 that's down four dollars on the day we 396 00:20:07.244 --> 00:20:09.244 were talking about oil 397 00:20:09.244 --> 00:20:10.587 earlier on so let's have a look at my crb index page 398 00:20:10.927 --> 00:20:17.503 which shows brent crude oil uh down 1.4 percent to 399 00:20:17.523 --> 00:20:22.244 75.84 and west texas 7207 which is down 1.7%. 400 00:20:23.144 --> 00:20:24.846 Any other ones there really moving? 401 00:20:25.266 --> 00:20:26.167 No, not much. 402 00:20:26.508 --> 00:20:28.169 The S&P 500 futures. 403 00:20:28.770 --> 00:20:30.972 A few chickens coming home to roost there. 404 00:20:31.052 --> 00:20:32.113 Not too bad. 405 00:20:32.834 --> 00:20:39.660 But the market, 6,050 odd, which is down around about two-thirds of a percent. 406 00:20:40.401 --> 00:20:42.163 As you know, it's just updating. 407 00:20:42.623 --> 00:20:43.424 It's now down... 408 00:20:43.744 --> 00:20:45.146 Gosh, it's flashing all over the place. 409 00:20:45.674 --> 00:20:46.994 Down around about 0.9%. 410 00:20:47.114 --> 00:20:49.075 Call it 6039. 411 00:20:49.075 --> 00:20:52.556 US 10-year Treasury bond yield is 4.66%. 412 00:20:52.616 --> 00:20:55.977 The South African 10-year, it's not looking so great actually. 413 00:20:56.717 --> 00:20:57.437 Where is that now? 414 00:20:57.598 --> 00:20:58.298 4. 415 00:20:58.438 --> 00:21:00.518 Sorry, 10.82 I think it is. 416 00:21:00.838 --> 00:21:05.660 Oh no, 10.83 now, ahead of the budget which is on February the 19th. 417 00:21:06.260 --> 00:21:08.281 And what else have I got here? 418 00:21:09.081 --> 00:21:12.562 The Bitcoin price, which is doing nothing. 419 00:21:13.158 --> 00:21:16.721 down one and three quarters percent 95 600. 420 00:21:17.021 --> 00:21:23.587 um skulk any shares that caught your eye today other than the miners that we've 421 00:21:23.587 --> 00:21:25.587 been speaking uh 422 00:21:25.587 --> 00:21:30.473 extensively about no i think um yeah we mentioned about the trading update on 423 00:21:30.733 --> 00:21:32.215 on uh 424 00:21:32.295 --> 00:21:38.000 what statement on pan-african resources and then trellidor 425 00:21:40.081 --> 00:21:43.083 i missed that You haven't seen it. 426 00:21:43.423 --> 00:21:46.165 So Trinidad came out with a trading statement. 427 00:21:47.646 --> 00:21:52.108 Just really, really looking extremely good. 428 00:21:52.248 --> 00:21:55.430 I mean, earnings per share to rise up to 43%. 429 00:21:55.990 --> 00:22:00.973 Headline expected to be 33% to 43% higher. 430 00:22:01.013 --> 00:22:05.756 Now it's a small, small… It's a bit small for you, right? 431 00:22:06.136 --> 00:22:08.197 It is a little bit too small, yes. 432 00:22:08.677 --> 00:22:10.650 But it's a great… Great company. 433 00:22:11.270 --> 00:22:12.471 It's really a great company. 434 00:22:12.491 --> 00:22:14.451 I mean, we know it's one of those South African stores. 435 00:22:14.691 --> 00:22:20.753 They mentioned that they're seeing strong performances, you know, from the UK 436 00:22:20.753 --> 00:22:22.753 division, the Tralidor UK division. 437 00:22:22.753 --> 00:22:26.275 And wait for it, Tralidor today, up 42.3%. How can that be? 438 00:22:26.695 --> 00:22:27.395 Really? 439 00:22:27.815 --> 00:22:30.936 Any volume there, or is it just people knocking it about a bit? 440 00:22:31.857 --> 00:22:35.618 No, I wouldn't say it's the biggest volume, but remember, it's a small cap. 441 00:22:35.618 --> 00:22:36.318 It's a company which... 442 00:22:36.578 --> 00:22:43.561 there was the close at one round 75 yesterday and went up let's call 74 cents 443 00:22:43.561 --> 00:22:45.561 and that 74 cents is uh 444 00:22:45.561 --> 00:22:50.724 40 43 well close to 43 percent arise and and so all the the trellis all shell this 445 00:22:50.724 --> 00:22:52.724 out there well 446 00:22:52.724 --> 00:22:57.207 done i applaud you well done sticking with it yeah i've got um on the upside shares 447 00:22:57.207 --> 00:22:59.207 that we would 448 00:22:59.207 --> 00:23:03.930 recognize boxer that's had a nice day nearly five percent higher ab in bev up 449 00:23:03.930 --> 00:23:05.930 nearly three percent in parlour platinum 450 00:23:05.930 --> 00:23:07.930 Up 2.6%. 451 00:23:07.930 --> 00:23:10.352 On AB InBev, I noticed in Amsterdam this morning, Heineken shares rose 13%. 452 00:23:11.313 --> 00:23:16.155 They've got a share buyback, and they're also selling more of the beer that I can't 453 00:23:16.155 --> 00:23:18.155 stand in places like 454 00:23:18.155 --> 00:23:21.377 Mexico. I don't know why you drink Heineken when you've got Corona and Sol in 455 00:23:21.377 --> 00:23:21.477 Mexico. 456 00:23:21.817 --> 00:23:23.298 But anyway, that's just me. 457 00:23:23.758 --> 00:23:24.778 I'm being disloyal here. 458 00:23:25.419 --> 00:23:28.140 Impala Platinum, 2.6% up. 459 00:23:28.500 --> 00:23:32.181 Downside, Pan African Resources, the aforementioned 7.6% weaker. 460 00:23:32.281 --> 00:23:33.202 Xaro down 6.3%. 461 00:23:33.202 --> 00:23:33.902 And a third. 462 00:23:33.982 --> 00:23:40.287 DRD Gold down 5.5%, Alpha Min down 4.1% and Harmony down 2.4%. 463 00:23:40.387 --> 00:23:44.971 So the downside five, all populated by the diggers. 464 00:23:45.371 --> 00:23:47.533 What about the indices today, Skulk? 465 00:23:48.554 --> 00:23:49.755 I'll give you the indices now. 466 00:23:49.915 --> 00:23:51.717 I think one thing you mentioned was Boxer. 467 00:23:52.257 --> 00:23:53.738 Great movement there today. 468 00:23:54.339 --> 00:23:55.740 Well, great recent movement. 469 00:23:56.400 --> 00:24:03.226 And it seems like if all goes well, I remember the rebalancing for these indices 470 00:24:03.226 --> 00:24:05.226 usually happen in... 471 00:24:05.226 --> 00:24:10.529 and the end of march so we've still got some time but if everything stays 472 00:24:10.529 --> 00:24:12.529 unchanged then there's a 473 00:24:12.529 --> 00:24:17.752 great great possibility that that boxer will be included in the all sea now if 474 00:24:17.752 --> 00:24:19.752 they can be included in the 475 00:24:19.752 --> 00:24:23.874 all z actually that would mean that most of these funds and trackers will need to 476 00:24:23.874 --> 00:24:23.974 buy it and i 477 00:24:23.974 --> 00:24:30.377 think this is sort of pre-empting i think that's one of the reasons why we've seen 478 00:24:30.377 --> 00:24:32.377 is it the tracker funds that are buying ahead of time or is it the 479 00:24:32.377 --> 00:24:36.679 people knowing that the trackers will have to buy it buying ahead of time that are 480 00:24:36.679 --> 00:24:38.679 not involved in the trackers in other words the 481 00:24:38.679 --> 00:24:40.200 sophisticated punters i would go 482 00:24:40.340 --> 00:24:47.222 for yes okay now it won't be a trackers naturally that's that uh tracker naturally 483 00:24:47.222 --> 00:24:53.343 implies that it should track the indice you can't include something uh that's 484 00:24:53.343 --> 00:24:55.343 that's not so you 485 00:24:55.343 --> 00:24:59.545 can't buy it and then bunging into the uh into the into the fund on the day that 486 00:24:59.545 --> 00:25:01.545 boxer is included that that doesn't work like that 487 00:25:01.545 --> 00:25:03.231 correct okay good so it will be the latter Righto. 488 00:25:04.014 --> 00:25:05.580 Yeah, as I said, the indices, please. 489 00:25:06.544 --> 00:25:08.246 So the JSC today closed. 490 00:25:08.886 --> 00:25:11.769 So we actually found ourselves still positive. 491 00:25:12.789 --> 00:25:16.072 End of the day, 87,942 points. 492 00:25:16.092 --> 00:25:20.156 That's the JSC all share, 43 basis points in the green. 493 00:25:20.336 --> 00:25:23.378 The resources took a bit of a breather with all these scores, 494 00:25:23.438 --> 00:25:28.343 retracement of the gold miners and some of these other miners as well. 495 00:25:29.043 --> 00:25:31.065 That was down 29 basis points. 496 00:25:31.105 --> 00:25:34.568 Industrials, however, they were looking really good, up one point. 497 00:25:34.948 --> 00:25:36.549 0.1%, so over 1%. 498 00:25:37.010 --> 00:25:40.833 Financials also having a good day, 33 basis points positive, 499 00:25:41.293 --> 00:25:46.958 while the asset property also had a solid day, 0.5% positive. 500 00:25:46.978 --> 00:25:49.239 When you look at the value traded, not a bad day. 501 00:25:49.660 --> 00:25:50.621 Seriously, not a bad day. 502 00:25:50.701 --> 00:25:54.123 I mean, 22.3, close to 23 billion for today. 503 00:25:55.404 --> 00:25:59.988 So we've been consistently eating this 20-plus billion mark. 504 00:26:00.148 --> 00:26:00.848 per day. 505 00:26:00.848 --> 00:26:01.969 I would say a good sign. 506 00:26:02.029 --> 00:26:07.071 Very different to this time last year when we could barely get above 15, 17, 18 507 00:26:07.071 --> 00:26:07.091 billion. 508 00:26:07.171 --> 00:26:09.492 So yeah, suddenly some interest in South Africa. 509 00:26:09.552 --> 00:26:10.252 Well done. 510 00:26:10.532 --> 00:26:12.633 Okay, Skulk, thank you very much for your time. 511 00:26:12.793 --> 00:26:15.094 As always, we shall reconvene next Wednesday. 512 00:26:15.154 --> 00:26:20.336 Skulk Lowe is a Portfolio Manager at PSG Wealth Old Oak in Cape Town. 513 00:26:21.117 --> 00:26:28.060 The views and opinions expressed in these podcasts are those of Lindsay Williams and 514 00:26:28.060 --> 00:26:30.060 various contributors and do not reflect the policy, 515 00:26:30.060 --> 00:26:32.578 position or opinion of any other agency, organization, employer, 516 00:26:32.918 --> 00:26:36.761 or company associated with StrictlyBusinessPodcast.com. 517 00:26:37.221 --> 00:26:44.205 Assumptions made on the analyses are not reflective of the position of any other 518 00:26:44.205 --> 00:26:46.205 entity other than the speaker or the author. 519 00:26:46.205 --> 00:26:50.369 And since we are critically thinking human beings, these views are always subject to 520 00:26:50.369 --> 00:26:52.369 change, revision, 521 00:26:52.369 --> 00:26:52.530 and rethinking at any time. 522 00:26:52.830 --> 00:26:55.232 Please do not hold us to them in perpetuity.