You're listening to Strictly Business Podcast with Lindsay Williams.
JSC has closed its doors for another day, so it's time for the five o'clock shadow.
And as always, on a Wednesday, I speak to Skulk Lowe, Portfolio Manager at PSG
Wealth Old Oak in Cape Town.
We haven't spoken for a while, Skulk.
And a while used to be just a while.
And a while is a long while now, these days.
And I just want to give you the backdrop of this.
The gold price has gone from over £3,500 to...
well built actually approaching 3100 at one stage and the S&P having been down
17%
for the year at its low is now unchanged slightly higher for the year so that's the
background
but let's get something else out the way and that was your conference of last week
I saw lots of good things about it on social media did it go well?
Yeah the PSG annual conference is that's usually a highlight of my
year.
And, you know, it's like some of these events.
I mean, I can just use the epic, the Cape Epic.
It's a mountain bike.
They usually, every year you hear people say this year has been the toughest epic
ever.
And the next year they will say it's the toughest epic ever.
And just like that, I mean, I would say this year was the best PSG conference
ever.
And this year I really felt them.
that Wonderful speakers.
I mean, the insights we've got.
I mean, the whole theme was AI.
Yes.
And I was just mind-boggled of where we're in the cycle.
You know, things we haven't even talked about five years ago.
That's now sort of being seen as not only the norm,
but if you don't embrace this future, you won't survive.
But yeah, it was good.
It was really, really good.
Did you get the sense that AI is everywhere and we didn't know it was
everywhere?
Did you get the view that perhaps we're using AI when we don't know we are?
Yeah, yeah, yeah.
I mean, there was this one, let's call it presenter,
who actually showed a photo.
And I think it was five years ago, but it could be seven years.
But anyway, it's a photo where they see...
what was that animal?
Let's say it was a cat, but it wasn't a cat.
Cat using Wi-Fi on a plane.
And then AI painted a picture.
And this picture, in some cases, didn't have the plane.
It was really, if you look at the picture now, you would think, oh, I'm in AI.
But this is five years ago.
Now you give AI that same command and it will have the finest
detail.
I mean, you can actually switch and say, where Kat using Bluetooth, and suddenly
it's got these earbuds,
and it's just unbelievable what AI can do.
But I think this is sort of a playing around with AI.
But to me, how AI has evolved over the past, let's call it two, three years,
it's just unbelievable.
And I'm actually sort of worried, you know, looking two, three years ahead.
I mean, and we're not talking about 10 years.
We're not talking about 30 years.
We're talking about two, three years ahead.
I mean, it's crazy.
It's absolutely.
But why are you worried?
Is it because it's going to take care of your job?
Is it because everybody is going to be doing the same thing?
The same AI program is going to be employed by Morgan Stanley, every other
financial institution, PSG,
and they're all going to go in the same direction.
And then we really do have chaos.
No, I think I'm more the conspiracy theorist around AI,
and that it definitely needs to be, what do you call it?
properly, what is the word that I'm looking for?
Regulated, supervised.
Yeah, that's it.
Yeah, it's supervised.
It needs to, you can't just have an open mandate for this because this could be
crazy.
But do I think, and most of the speakers said,
do they think this will take most of the people's jobs?
No, I think, but the bottom line is if you don't embrace it,
you will find yourself most probably without a job.
So anyway, I just thought it was really, really good.
There was a few really solid speakers on the current market environment,
this whole tariffs, Trump, China, I mean, the current environment.
And I must say,
it's interesting to sit there and suddenly starting to hear words like stagflation
more and more,
economic worries.
and How the whole world has went from a totally open world, I mean,
not just in terms of movement, but in terms of trade.
I mean, if you look at it, let's call it four or five years ago, the world was
pretty open.
I mean, let's call it pre-COVID, but open.
You could move wherever you wanted to move.
You could trade with whomever you want to trade.
Trade was easy.
Sadly, that's not the case.
That's not the case.
So, yeah, I thought it was a long-winded way of saying it was a really, really
insightful conference.
Well, it must have been if you learned something and if your mouth was agape at
certain points, then it must have been very, very good indeed.
So well done.
Next year, you have a high bar to jump over.
Right.
Let's have a quick look at what you've just said there, because I got a CNBC
newsletter thing which I get every day.
And point number five.
was with the headline, good at bad stuff, it says.
Experts are sounding the alarm about the safety of artificial intelligence or the
lack thereof.
As companies like Meta, Google and OpenAI race to stay competitive,
AI players have shifted from focusing on cutting edge research to prioritizing the
development of revenue generating consumer ready AI services like the cat on a plane,
Skulk.
So it was a very good example that you gave us.
In the process, it goes on to say, they're increasingly taking shortcuts when it
comes to the safety testing of their models.
Experts say the models are getting better, but they're also more likely to be good at
bad stuff.
That's what some industry insider said.
So you make a very good point.
So be careful.
They're not just trying to make a fast buck in order to justify their enormous
amount of R&D spend.
They're also cutting some corners.
Okay, S&P.
Now, flat on the air, it's all been a big con job, hasn't it?
A con job on the downside, a con job on the outside.
Now, this whole boot-licking, sycophantic, bromance stuff between Saudi Arabia's
MBS and Donald Trump.
I had a sick bag next to me last night watching this conference in Riyadh.
I mean, it's positive, I suppose, in many ways.
But you can't tell me that all this is not because of bribes.
And, and certainly maybe corruption's a little bit of a strong word, but there's
something going on in the background.
Aeroplanes flying here and there, 600 billion being invested everywhere.
And a certain individual is certainly benefiting from it.
Money talks, Lindsay, money talks.
Shouts in this case.
Yeah.
Anyway, but we have been, we have been led along the garden path, I think,
to a certain extent in 2025.
Yeah, I think it's been an unbelievable year.
I mean, you just mentioned we haven't had this podcast, or you and I haven't had the
5 o'clock shadow for, I think it's two or three weeks.
And, you know, three weeks, yeah, three weeks ago, when we last had this
conversation,
we were still very much in the aftermath of the first tariff announcements.
In actual fact, it was just during that time where he, what he called, he paused.
the tariffs until the, I think it was the 9th of July.
So that's still very much in play.
We know, you're talking about bromance.
We know that, you know, that President Trump, well, he had this whole China
conversation over the weekend.
Oh, sorry.
And Switzerland.
And they called it a total reset.
And both of them just went and reduced.
reduce the tariffs.
And, you know, some of these levies, as President Trump mentioned it, has been
suspended,
hasn't been canceled.
It's just been suspended.
And as by his own admittance, they might rise again in three months'
time if no further progress is made.
But for now, they don't see, President Trump don't see that it will return to the
previous, let's call it, 145%.
But, but...
We saw the aftermath.
The market loved it.
I mean, really, really loved it.
You just mentioned, you know, this is three weeks later.
S&P went to one stage, was close to 20% down from its highs.
Now trading very, very close, very, very much close back to its highs of February.
I think by the current movement, most probably we'll move back.
And what worries?
I mean
There's this graph that I just looked at and a graph between
the they use the TLT,
which is basically just the long bond ETF relative to the S&P 500
ETF.
Now, for the listeners out there, this is just literally where you put them
relatively against each other.
And over the past, let's go to three years.
we just saw this graph move one direction that's upwards for for the s p 500
basically showing a
absolute risk on environment um to to a certain extent where where you actually
get a
This is a really overheated environment, which we saw in February.
And then we got the tariff announcements.
We had the aftermath, the big fighting between some of these countries.
And I can still recall you and I had this conversation where I said, I mean,
that's showing us a risk of how quickly did it go from a risk on to risk off.
Well, if we look at that same graph, we're exactly back to the levels we've seen in
February.
Why?
Because, well, post- tariff announcement the long bond rate although i'm talking
about the 10-year
rate went uh from
close to the four percent levels to four and a half percent and as we said yeah 447
448 yeah there we go that's it 4.5 i spoke to this bloke yesterday actually he said i
he put this report out it was published on
may the 6th and uh in the introduction it says this data was collated as of the end
of
March 2025.
So I said, so it must be a bit difficult for you to write reports these days.
Cause by the time you look at the data, it's got a certain data and it cuts off
nothing after that.
Then you publish it.
And by that time it's out of date.
He said, the amazing thing is Lindsay, that everything's exactly the same as it
was on March the 31st. When I first,
when I first made my conclusions, it's extraordinary.
It is.
It's as if we just, you know, went, went away, you know, Trump made the
announcements.
And if you took a, let's call it, four-week holiday, or, yeah, a little bit
more than a four-week holiday, and you came back,
you would have said, what happened?
Because everything has changed, but everything has changed, stayed the same.
Yeah, I looked at a few, let's call it, things that happened in April and where we
are currently at.
I think beginning of April, we had the trade policy uncertainty and to a certain
extent where we had some
certainty of it.
Now we back to.
to being uncertain because we're still waiting for this for this uh pause now to
unpause which will will only
happen in july um we had a lot of investment banks um banks
investment houses one of them being the imf uh
that that downgraded to the the growth forecast uh for most of the of the
countries, the U.S.
included.
We had many of these inflation concerns.
We're sort of looking at interest rate cuts.
And remember,
we went into 2025 expecting at least three rate cuts for
2025.
And here we're sitting in May.
We haven't seen one.
I'm looking at the CME Fed tool,
which gives us the probabilities of rate cuts for the different Fed meetings.
and currently as we sit here it's close to 100%, more than 90%
probability that we're going to see unchanged for June, more than
90% probability it's going to be unchanged for July.
And there's about a 50-50 chance, 50-50, that we'll only see the first one in
September.
And as we sit here, I think...
I think they're wrong, given the fact that we got an inflation number of 2.3%
yesterday, which was lower than expected,
unless they have had a sneak look or...
a good idea of what next month's CPI inflation will be.
So, Skalk, I don't know about that.
I reckon there's at least two this year, at least two cuts, that is.
I would have said we still would have seen at least three if we look at the inflation
that actually came down.
Well, yes, 2.3, lowest level, just by the way, since February 2021.
So, I mean, this is the lowest level in over four years.
So you would have expected them to, well, at least when this came out.
what it came out yesterday.
When it came out,
we would have seen at least the probability increase of a rate cut earlier
than September.
Well, as it stands, it's still very much September and they're still only expecting
one.
So I agree.
But I mean, we've used the word uncertainty so many times in this podcast
already.
I think if we had a tequila every time we used the word uncertainty, I think you and
I would have been, as we say in Afrikaans, poop
drunk already so um you underestimate me but anyway um i said the uncertainty
uncertainty uncertainty um so so but i mean yes i agree with you but but i've
got no doubt in my mind no no doubt that remember
if they if you unpause these tariffs and yes i don't think it will be to the extent
that we've
seen um with the first announcement i think it might
be a tad softer but even a tad softer mrv will be inflation undoubtedly
um well stack fashion conversation do we think that
that growth will be better now because mr market is telling us well they're not too
worried about the u.s growth
anymore because s p 500 well we're back at at the high levels and you know some some
of the companies like
oldman sachs that came out yesterday and they they increased their forecast i think
i increased it from originally they
downgraded to four thousand five thousand eight hundred and i think now it's it's
way over six thousand so many of these
companies big investment and I said, well, things are looking better.
I mean, I saw a commentator tweet, and I'm going to read it.
Unfortunately, I didn't write the source.
Please, sorry about that.
Inflation lowest levels in four years.
Gas falls for third month in a row.
Air prices drop 12% in a month.
Trade deals begin to take shape.
Markets react to it all by surging.
India, Pakistan reach a ceasefire.
Putin-Zelensky meeting.
meeting this week and he says so trump wrote this right i mean it sounds like it
come on there's a grain of truth in
all of it of course but we do know it's short term yes yes i i you know
if somebody asked me today you know what do i what do i see in the market and
i i sort of feel i see the i see i see the um i i hear the jaws theme song lindsey
i mean i'm i'm strange when i I hear voices, but also this,
because I hear theme song.
And what I'm saying, for all the younger listeners out there, Jaws is a 1970s
movie, the original one.
And it always had this trailer, and the trailer sounded like a B-rated movie
announcement.
You always remember this.
He was a man on a vengeance.
He had something to prove.
And Jaws was no different.
They actually started off, just when you thought it.
it was safe to go back in the water.
And then the theme song started.
I'm just writing down a few things now.
Since we last spoke in three weeks, the deterioration has been marked.
You're like Joe Biden.
You've got tequila.
You've got voices in your head.
Now you've got theme songs and you're singing them.
Okay, that's okay.
But I am hearing this theme song when I look at Mr.
Market currently because just when you thought it was safe to go back in the
market you're quite right no
you're quite right in fact the first the best bit of jaws is when they're when
they're out with the scientists played by richard dreyfus and
the the the fisherman the gnarly old fisherman is there and he's he's chumming
you know he's throwing in fish heads and things in
order to attract the shark and the shark comes up he's
completely completely bamboozled by this and the scientist doesn't see So the
scientist is the market trader of
the things.
Thank goodness it's all over and how big can a shark be?
But then the shark comes up and we don't quite realise, despite the fact that
there's a 90-day reprieve on the big,
big tariffs, the fact is it's just a reprieve.
Why 90 days?
Why not just do it across the board anyway?
So just realise damage has already been done and will continue to be done
given the history of Donald J.
Trump.
Correct.
correct and i think the only thing that's really keeping up the market in my view
and this is just my view because um you
and i i mean i think we're gonna we're gonna either be legendary in a year to
some or we're gonna be totally forgotten because
you and i had this tax inflation conversation i think already two two and a
half years ago yeah um but
i mean so so now we've already see the first quarter growth results came out for
the
us dropped 0.3 so there's the first contraction already.
First murmurs of a possible recession.
Yes, we did have the conversation about 2.3% inflation,
which is the lowest levels since February 2021.
So that's good.
But as we just mentioned, I mean, tariffs were just paused.
The actual tariffs will still be implemented in some way.
And 30%, don't forget, 30% on China goods is a very,
very large number considering this huge volume
of trade that is sent from china to the united states of america every year so
don't think that oh thank goodness it's not
145 percent it's only 30 percent only 30 percent do me a favor that's damaging
correct correct
yeah that's that is that is going to be damaging and that's going to be
inflationary no doubt about it so so the silver bullet as i mentioned
the silver bullet for me um is is the is the job numbers the job numbers that that
that that's still
to this point holding up pretty strong when we we saw that the non-farm payrolls
that actually increased in
april and and unemployment rate stayed pretty stable at the four point four point
two percent level so so that's that's sort of the
the the saving grace for now but
i don't i don't i don't see that i mean if you're gonna start seeing contractions in
in the the
economy uh we start seeing these tariffs i think we're gonna we're gonna start
seeing some some worries around these job numbers pretty pretty soon so yeah i don't
think it's over lindsey
i mean again i'm referring referring back to the jaws theme so just when you thought
it was safe to go back in the market i i don't think
we were there yet i think the market is is really
um to take us back to the previous hours and remember this that the retraction we
saw early april was
i i i thought a good thing because remember market was trading in
elevated levels when i say elevated levels at at some of the highest writing pe
ratings that we've seen
since since you know 2020 and before that uh the the dot com era the early
2000s yet we're sitting with all this wait for it uncertainty yeah no i
don't know lindsey i'm i'm i'm really skeptical because someone sent you uh you
said you put something on linkedin an article I think it was
And somebody had asked, or you'd ask a rhetorical question, I think it was, which
says, is it too late to sell in May and go away?
And we'll talk about that next week because we'll still be in May.
But you talked about a silver bullet.
Now I'm going to talk about a gold bomb because it hasn't been great.
And that's all to do with the dollar and also risk off, as people say.
Thank goodness we can get out of the safe haven assets and go back into equities
again.
The gold price currently $3,183, down $52.
on the day a long way away from 3500 but it was too high at 3500 probably
should we call it 3000 to 3500 for the rest of the year yeah yeah i
think i think it's going to stay pretty stable and and why why still you know you
know if you saw some of these miners
react i mean massive massive retractions in in the likes of gold fields anglo gold
harmony all these mines
And I look at this and I went like.
I don't foresee a major contraction in the gold price purely because of all the
things we just
mentioned.
Yet, when you look at gold fields, they brought out an operational update last
week.
And you're not having enough time to look at that.
But they already mentioned that on a year-on-year basis,
both the all-in sustainable costs and the all-in costs are lower now than what it
was exactly a year ago.
looking at more or less
$1,865 per ounce for goldfields.
Well, even if it stays, even if it goes down to $3,000, I mean, these mines,
and I say these mines, I mean, pretty much all gold mines all over the world are
printing, printing money.
So, yeah, I think these retracements is a good thing and definitely sort of attract
my
attention currently.
Okay, let's have a look at some markets now.
Dollar Rand, 18.23, that's good for the plane load of white South Africans who
have just been shipped off to the United States of America.
They can exchange their rounds into dollars at a slightly better rate than
they would have done six weeks ago.
That's another story.
Okay.
At least we know there's more than 44 people speaking Afrikaans now.
Didn't, didn't.
What's her name?
Charlize Theron came out that there's only about 44 people still speaking Afrikaans.
Well, We know that there's 49 Afrikaners that actually went over to the US, but
anyway.
That's a great story, and I wish them well.
British pound against the Rand is 24.23.
The Euro Rand is 20.43.
Euro dollar is 1.1205. So the dollar has weakened very, very slightly.
British pound against the US dollar is 1.33 now.
Commodities, the gold price, we've mentioned it's down over $50 to just above
$31.80.
platinum price that's boring 980 down a bit palladium
953 up a little bit getting on to something that's been quite exciting since
we spoke
if you're into that sort of thing Brent crude oil is
down just under a percent to 66 dollars and six cents per barrel and West Texas
crude
63 dollars and eight cents per barrel which is down also just under one percent
natural gas prices.
Down 2.8% again.
There seems to be this big arbitrage every day between gas and oil.
And yeah, that's more or less what we've got there.
S&P 500, which we've been talking about, is the futures prices currently.
This is the June futures.
They're going to be going off the board quite soon.
But anyway, for now, 5,906, which is flat on the day.
US 10-year bond yield, we've also mentioned that, 4.51% now.
which is just very slightly higher for the yield.
The South African 10-year is, what is that,
10.77%.
And the Bitcoin price, which has been all over the place, all to the upside there,
is down a bit today, down 0.5%
to $103,224 per Bitcoin.
Downside on the JSC today, Skalk, I can give those to you because they're all
diggers, I think.
have you got them there yeah i've got them and you're 100 right and and actually i
want to i see your
diggers and i will raise it by saying most of them gold diggers because angler gold
down five percent pan-african resources
4.3 percent down harmony down 3.3 percent there's the first non-digger south 32 down
2.6 percent and then gold fields down 2.43 percent yeah
yeah all diggers okay on the episode ph prop up up 3% truos, weighing in with a
2.9% gain.
DataTek up 2.9% as well.
2.5% gains for SAPI and Process up 2.5%.
Also, not much going on on the corporate front in South Africa at the moment,
Scott.
That will, of course, change as the results season comes in.
But, yeah, pretty quiet.
So you're back and you're going to read all the reports that you missed because of
organizing conferences
and so forth.
I want to ask you, And this is a sort of a trading philosophy question.
When you've built up a gold position, you've built it and done very well for
your clients and hopefully for yourself as well,
Scal.
When do you manage to say that's it or that's it for the bulk of my position?
Because there are certain sick gold bulls that it's easier for them to get out of a
marriage than it is to get out of a gold position
that they are so in love with.
I know you're not that sort of person.
But I do know it's difficult to let go.
Please give us some guidance here, if you would.
A few years ago, I wrote an article.
It's when to sell a stock.
I'm not Mr. Warren Buffett that says the answer to that is never.
I do have an exit strategy.
And I think that the largest part of this answer is when the investment
case changes.
And...
When I look at the current environment,
I don't see the investment change has changed at all or the investment case has
changed at all.
We still got the tariffs.
We still got political.
Yes, we've got a ceasefire between Pakistan and India.
But Pakistan and India wasn't even a topic three months ago.
We had the Gaza.
We've got we had
um ukraine uh russia now suddenly india and pakistan has joined the pity party i
mean
yeah so to the investment case for for gold hasn't changed so i i'm not going to
exit that
that position anytime soon on
the back of what i just mentioned these guys are are mining gold for run about one
thousand
eight hundred one thousand nine hundred dollars and and they're selling it for way
more so now
I'm only married to my wife, not to the gold position,
but my investment case is still very, very, very strong.
I want to just get back.
I mean, you very quickly mentioned that Naspash and Proces were one of the top
performers today.
And just a thing for the listeners out there, we had 10 cents results today.
I think that's the main reason for that move.
Revenue came out at 180.
just over 180 billion won uh which which average the the the which which surpass
the average
estimates of let's call it just sharp 176 billion won so that's that was quite a
nice beat and uh yeah
mr market reacted very very nice and as i as as you mentioned um and processed up
2.5 percent
and especially a sharp two percent for today skunk thanks so much for your
insight great to have you back skunkler 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,
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