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 it's a Thursday, it's the doubleheader Dream Team edition of the 5
o'clock shadow with Viv Govender from Rands, Swiss and Johannesburg,
and David Shapiro around the corner at Mirawares Arch at Sassfin Security.
David, can we start with you, please, on South African Reserve Bank?
We don't need to do too much because we know they were going to cut, but what were
the details?
I think the main...
The governor felt comfortable because the RAND had benefited from the weaker dollar
and
was a lot stronger than the last time they met.
I think there was a big fear that the RAND would weaken.
Nobody could read the currencies and no one could read the sell America view.
So I think that gave him encouragement, plus the general trend here in inflation
as well.
So we reduced rates by 25 points.
I think everybody.
had built this in.
I think this was largely expected, but five of the governors, I think, voted in
favor, one against,
who wanted a slightly bigger cut.
So to a large extent, it's in the market.
I think the RAND is $17.80 at the moment, $17.79, but I think that's more from a
weaker dollar,
which is now responding to the GDP number that came out of the US and also now
opening
views that...
or raising views, you know, that the Fed's going to cut as well.
So this just makes it easier for them to cut with inflation coming down or the
trend in inflation down.
The PCE was slightly hit and then the market expected.
So who knows?
To try and actually join the dots can be very difficult sometimes.
Okay, we'll come to the US in a moment.
Well, the economic side of the United States.
Well, let's get to the corporate side.
NVIDIA, please, Viv.
Great set of numbers.
I think a 73% increase in revenue.
A little bit of a problem with China, but I noticed one of the big banks immediately
came out and raised their
share price forecast.
What did you make of the numbers, Viv?
The numbers aren't actually spectacularly good.
For normal companies, they are, but obviously NVIDIA has a lot of built-in
expectations here.
So that wasn't quite that great.
uh you know tools but the thing that really was the thing was i think the story
they were saying around it the fact that demand was so so strong
yes you mentioned china they're losing money on china but i don't know if you saw
uh today with trump's uh tariffs being reversed and
uh
yes it's uh trump always uh chickens out yes yes taco but robert armstrong of the
uh
financial times yeah he coined that taco you know trump always chickens out He
hates it.
He does, he does.
But so I think that indicates that there's a possibility that they're going to
recover some of those things with regards to
China as well.
AI demand is still sky high, and I think that's what's pushing this stuff through.
Like I said, the actual numbers are not great.
Okay, but what would you do?
I mean, people are raising their share forecasts.
You stick with it or do you buy more VIV or do you actually lighten your load a
bit?
Look, I mean, I have NVIDIA.
I always have.
You guys know I have that AI portfolio.
The things that I always have had there is NVIDIA.
I've always had Tesla. I've always had, you know, Meta.
The big companies, I've had Palantir almost since the start as well.
I've recently bought like CloudStrike and that kind of thing.
these companies i mean they are the the effective backbone of the ai that's called
uh you know um revolution and you
can't not have it with you in your portfolio unfortunately uh and yeah i mean
all the other stuff as well i mean asmr was up today i think it's come down
since then but uh you've seen all the other tech companies as well uh all the
chip related
companies basically do quite well as used as well okay david so you're over to you
on the video yeah You're the same, I suppose.
I'm the same.
No, I'm very bullish.
The more you listen to Jensen Wang, I can never pronounce it properly,
but the more you listen to what's happening in the industry, the more you
realize that this rollout,
whatever word you want to use, the infrastructural development is going to go
on for another three, four years.
Yes, this early phase is the hardware side of it.
I'm calling the bricks and mortar, building the data centers, getting the
right kind of…
infrastructure in technical in technology and and after that comes the you know the
next phase as well
so it's like the internet you know you had to build the internet for companies to use
it and i you know the more i hear
analysts the more i hear people like like jensen wang talk the more I'm encouraged.
And I think it's still the biggest driver.
What I like about it is it's taken all the attention away from Trump.
You know, we once again, I'm saying, you know, once again, looking at companies,
looking at industries, you know,
looking at where this is going rather than worrying about and having
Trump at the center of attraction and just making us annoyed.
You know, this is, I'm so glad this is happening.
And, you know, we're back to kind of almost like fundamentals.
Well, yeah, short term we are, David.
But on the other hand, I'm slightly worried that things have gone awry.
I mean, it's great that this international trade court in New York with three judges
have said, what are you talking about?
You can't actually do this.
But on the other hand, what about the businesses?
What about the businesses that one minute are going to pay 50 percent for European
import?
The next day it'll be lower and it'll be later.
And now none of the trade tariffs are going to go through.
after the appeal by the Trump administration.
It's chaos, David.
Sorry, Viv, I'll come to you in a second on this one.
But it's really getting annoying now, isn't it?
I mean, it's always been annoying, but it's more annoying now.
But I think the markets have discounted all of this.
They've just moved ahead, you know, and they say, yeah, we know it's going to
happen.
The effects are not going to be too bad.
Look, Trump can still oppose individual tariffs, like on steel or on something.
He can't do it in a blanket way or just say, we're going to put 20% tariffs on.
you know, the EU.
It's got to be more specific.
I think that's what the ruling is.
So they'll find a way.
He's not a person who's scared by the law.
You know, him and his advisors, you know, that's, I don't think, you know,
they're going to stand down.
They'll find something else to do and so it'll go.
But I mean, it has been a bit of a blow for him, regardless that the courts have,
you know,
he's still going to go to the Supreme Court where I think the bias is towards
him.
But nevertheless, I think I'm glad that the courts are standing up to him and
telling him that if you want to
do anything like this, it's got to go through Congress.
It's got to go through the right kind of procedures.
But we're getting bored of it, Lindsay.
Six months seems like six years with this fellow.
Are you bored with it, Viv, or do you just blot it out in your special way?
I don't know if this is actually in long term against Trump's favor, because...
Remember that dinner you had recently where the guys that bought his meme coin
get to have dinner with Trump?
This is just going to mean that he's going to have more ability to pick and choose
who gets tariffs and who doesn't get tariffs,
which is going to be giving more power and therefore more chance for corruption.
That's all this is going to mean down the line, because now it's going to be every
single industry has to go individually and say,
buys deep yeah buys deep coin the next to his library you know
by a new conference at the Trump Center or whatever it's called here, Trump Towers
and whatnot.
That is what this is about.
You know what I mean?
We mustn't think of it as like, oh, Trump has some philosophy about how the world
should be.
Some of the people under him have a philosophy like that.
I mean, Stephen Muller definitely hates immigrants.
J.D.
Vance has a philosophy about, you know, white working-class workers and stuff
here.
But Trump...
wants to get rich and this is just going to give him more opportunity because now
you can not say europe what's europe going to do you could bribe him directly like a
title but you know siemens might just you know it was uh there may be companies in
europe particularly that might give him
a couple of things here today yeah that's best in the future yeah okay
um let's get back to reality david quickly i mean we we look occasionally at south
african companies listed companies that come out with their numbers
on the trading updates all results spa adcorp lewis adcorp we spoke about the
other day david and it was
up on the trading update up another seven percent today
on the actual numbers lewis's uh retailer obviously but in a specific field up six
percent and spa we all know about spa
what it does down three and three quarters percent any of those that you looked at
and said wait a second there's a flashing lights here good or bad
to be honest i haven't gone into great detail you know spa we know has been under
pressure they're talking now about selling the swiss
operation which I don't know why they were there in the first place.
They really are kind of backtracking on all their overseas expansions.
And at the end of the day, they're going to end up in Nelsprate or in KZN,
wherever they used to be, or Joburg, so on.
It's sad because fundamentally it's a buying organization.
It's a very, very good business, but come under a lot of pressures for many reasons,
including…
uh technology um lewis great little business it's been around this was gus
remember great universal
schools you might know that in the uk and they've always been a very super you know
very good business
they know what they do they had a few issues when they were overcharging on
insurance and other things like that but that's how they make money they
don't sell furniture they sell
It's a financial company where the vehicle is selling a dining room table or a bed.
Because when you buy that on HP or whatever they call it on Terms today, you
have to take out insurance.
You have to cover yourself in case you don't make those payments.
And that's where the margins are.
But it's a good business.
So you go in and buy a sofa and at the side there's a kiosk where you say, right,
you like that sofa?
Sign here.
Yeah.
And, you know, people who buy on HP say, how much can I afford?
200 rand a month.
What fridge can I get for 200 rand a month?
We'll take it.
You know, and the margins are astronomical when you actually break down what these
people pay, you know,
in terms of the interest rate.
It's massive.
But, you know, that's capitalism.
But Lewis is a good business.
Got a lot of good stores and been around for a long time.
Okay, good.
Some good news.
Right, let's have a look at the markets now.
You mentioned the rand, David.
1778 is the dollar rand, which is a 1.3% fall for the US dollar.
British pound against the rand is 2398.
And the euro rand is, where is that euro rand?
2619 now.
Look at that, 2619.
So what am I talking about?
No, I'm looking at the 2019.
Excuse me.
These pharmacies' reading glasses really are quite poor.
20.19 the euro round, in case anyone just fell off their chair.
Euro-dollar won 13.60.
That's a 1.05% rally for the euro against the dollar because of what David said,
economic data coming out of the US GDP.
What was the exact number, David?
Do you remember?
For the GDP.
Oh, um...
Where are you?
Yes.
Minus 0.2.
Okay.
There you go.
That explains it.
British pound, 134.90.
Commodities now.
The gold price is up $20 on that weaker dollar, 33.17.
The platinum price is barely changed at $10.84 an ounce.
And palladium is up 8 to 9.91.
Now, other commodities.
The oil price has, yeah, it's been quite an influence.
OPEC meeting in Vienna, of course.
and um Oil price now 1.2% weaker for Brent crude, $64.13.
Had a little bit of a flurry this morning after the tariff story and then came back
down again.
And West Texas crude, $60.93, down 1.5%.
Natural gas prices down 3.2% as well.
All this having a negative effect on the overall index, the CRB that is.
S&P 500 futures were over a percent high.
A knee-jerk reaction again to the tariff story.
now only up about a third of a percent.
5,924.
U.S.
10-year treasury.
Yeah, 4.44% expectations of a Fed rate cut.
And the Fed minutes are being read out at the moment, actually.
People going through it line by line.
But anyway, 4.44% for the U.S.
10-year.
South African 10-year has been firm, obviously, with the good inflation data.
And very firm today after the interest rate cut.
10.17% for the South African 10-year.
And Bitcoin, which has been in the news, I'm going to ask Viv about this in a
moment.
So get ready, Viv.
$107,538.10 for one Bitcoin.
And the other day, two days ago, they said that Trump was going to raise $2 billion
via Truth Social in order to buy Bitcoin.
It's not as if they're being very subtle about telling you what they're going to
do, are they?
And I think that's the reason why over the weekend it went to $112,000.
Viv, what do you make of it?
I mean, the Bitcoin thing is crazy because I...
Look, I mean, the biggest competitor to the Bitcoin in the world is the U.S.
dollar.
You know, it's the alternative reserve currency in the world.
The idea that the U.S.
government, you know, if you look at it from clearly a U.S.
point of view, you don't want Bitcoin to succeed in any kind of way.
You don't want it to be the reserve currency of the world or something that's,
you know, competitive to the U.S.
dollar.
And, you know, for a country like the U.S., what does Bitcoin do for you except
be competitive currency and allow for people
to do transactions that are away from your financial services, you know,
infrastructure?
So, yeah, it is a thing that you would not expect the U.S.
president to want to be supporting.
No, exactly.
They were the people who put him in power.
You know, they made large donations.
He's got his payback time.
His family are making an absolute fortune.
Did you see those two boys?
His son, Eric Trunk.
Did you see them in Las Vegas sitting there laughing their heads off?
I mean, so smug.
He wanted to slap them.
Yeah, horrible.
I don't know where your dad's a president of the United States.
Take a low key.
You know, go back in the office, do the books of account, balance the cash book,
you know, that kind of thing.
And they're taking full advantage of their name.
And obviously people are going to suck up to them simply because this might create a
connection.
You know, it's not that they don't talk to their dad.
You know, I'm absolutely sure that they're private conversations about what's
happening.
I just cannot believe that USA 2025 is in this kind of situation.
You know, maybe in the early days, in fact, quite the opposite.
But I mean, in the early days, you know, you might have got away with this or early
development of a company.
But that, you know,
that this happens in this kind of day where there's so much emphasis on
corporate governance and doing the right thing.
This is just flouts.
It just breaks every rule.
No one cares.
No one even talks up.
They're too scared to, you see.
It's very interesting with Trump, because in 2018,
I went back through his Bitcoin utterances, and he said it's a scam.
He says he doesn't really understand.
He admitted that he didn't.
And he said, but it seems to me, he says, like, this is one big scam.
And that was 2018.
Now, suddenly, of course, it's exactly the opposite.
But it is.
a very, very strange situation that we're faced with.
And the other thing is the two weeks with Putin as well.
Two weeks with Putin.
I looked that up, Viv, the two-week quote, and he's, I think on about 32 occasions,
he said,
well, you better watch this because we're going to do this in two weeks.
Not referencing Putin, but any other thing.
That's his thing, he says, in two weeks, in two to three weeks, in two weeks, in a
fortnight, in a couple of weeks' time, he goes on.
And on CBS, yes, it was 32 times he said it since his various presidencies.
It's extraordinary what this man is up to.
OK, David, what have you got on the upside?
What have you got on the upside share-wise, both here and rather in South
Africa and in the United States or Europe?
Well, obviously, the reduction in interest rates here kicked up some of the property
trusts.
They were up quite strongly now.
and also some of the retailers, so ShopRite, Redefine.
I don't know why Life Health Care and NetCare were up today, but all mutual as
well,
all benefiting from perhaps the trend in interest rates here.
On the other hand, SPAR was down on those awful trading updates, just problems still
there.
And some of the golds came down as well.
But, Lindsay, Stronger Air also took a bit of an edge off our market, but still it
ended up just under 1%.
percent point nine one percent at nine four seven two six with gains generally
across the board nothing nothing
huge but uh still steady gains in a uh widely across the board yeah i've got my
top five on
the jse shop right up nearly four percent redefine up 3.6 percent kumba
iron or up three and a half percent life health care 3.4 percent better and net
care up
3.4 percent as well on the downside spa SPAR down 3.9%,
PHPROP down 3.4%, and rats and mice elsewhere.
So, yeah, generally an okay day, particularly the retailers looking quite
good, apart from SPAR,
that is.
What are we looking forward to?
Viv, you've still got two days to sell in May.
Will you be selling in May, or will you be loading up?
I'm still pretty optimistic about the US market.
I mean, But crazily enough, we were just chatting about it.
We had a prediction kind of thing at the start of the year, like we normally do.
And we predicted two things.
I predicted the market would fall 20% by the time we get the prediction and the
market would end up positive for the year.
And right now, both seem to be coming true.
It's remarkable just how things have been.
And any kind of pattern you've seen in the past, I expect you to continue going
forward.
I mean, had you basically been out of this market this month,
uh you know the sb 500 you would have lost six and a half percent this was not a
study may month yeah okay so
we share the business as usual despite um the um extraordinary eccentricities of
people in charge okay
gentlemen david you want to say something no
i'm just happy with where the market is i'm looking at nvidia now at 142 or just
under now
and uh having been almost i don't know Viv, how much was it down for after
Liberation Day?
But it's up 5.5%, 6% now on the year, having recovered the full loss.
I think it was down at 96% at one stage.
That, for me, is a story.
And I think all across the tech board.
You know, Viv and Lindsay, I'm moving towards a view saying, you know,
this whole diversification story.
I'm not buying it.
I just want to buy 10 steps of wealth.
That's it.
Really?
Because all the compliance people and everybody pressure on you, oh,
you can't have too much of this or you can't have this.
You've got to spread your portfolio.
It's got to be balanced, blah, blah.
I say, what the hell?
If I look at where I've made money or where my clients have made money, it comes
down to about a half a dozen stocks.
The rest are nonsense.
But it's not just the stocks, Dave.
It's not so much you've got six or eight or 12, whatever it is.
It's the sectors they're in.
That's the point.
I mean, I speak to financial advisors and wealth managers and portfolio managers all
the time, as you know,
and they'll be horrified to hear what you just said about diversification.
I know.
That's what I'm saying.
The more I look at it, you know, in fact, I think it was Charlie Munger who actually
admitted, he said, you know,
if you look at Berkshire Hathaway, it's only a handful of shares that are made
there.
made their profits.
Most of the other stuff has done nothing.
And he's quite honest about it.
I'm going to find the quote and write something around it.
You find it, and we'll get Viv on this one as well, because Viv, you're also not the
first of the case.
I mean, Viv likes to...
No, you can't.
No, I don't.
It's in our portfolio.
No, please.
I think there's two kinds of periods in history.
One is when there's normal markets, and one is when there's a technological shift
or a paradigm shift happening.
The tech, the internet revolution was one of those.
This AI revolution is another one.
Computers were back in the day, another one.
When this happens, what you do is you buy a selection of the stuff that you think is
going to be going up and then you'd never ever sell them.
That's the thing.
You can't rebalance.
Like I'm, I have guys thinking about my AI portfolio that I'm approaching 20% on some
stocks here,
which I bought at high interest.
I mean, the whole portfolio is high as well.
The reason that we're holding on to them is that if you go back and look at, for
instance, what would you have done to make the most money when the internet
revolution happened?
You bought some Google, some Amazon, and some price.com.
The price.com went to zero.
You'd be damned to sell your Amazon and Google to buy more price.com.
You would rather just buy and hold.
And as Amazon goes up a thousand times, as Google goes up like hundreds of times,
that's the way you do it.
And when these markets mature, who knows when the AI things mature.
Then you diversify out of it.
But while it's going up, you never, ever diversify out of a rising.
It's the biggest mistake.
I shout and scream at people all the time.
You know, oh, we got 4.36% in NVIDIA.
Let's take it down to 2.98%.
It's ridiculous.
Anyway.
It might be quite fun to get a traditional old school fund manager because you two
obviously embraced.
embrace modern portfolio construction versus the old way.
And just a little bit of a discussion.
The thing is that they've got a Bible, and they start to read the Bible from the
first page of that.
We stuffed them.
You know, they've got everything written down, and this is it.
So I'm saying, okay, I'm a bit agnostic on that.
You know, what's the word?
No, you're quite right.
Okay, that's really interesting.
You're giving me some ideas.
I have to write something about it.
I mean, I have to get my arguments clear.
I can't just go up on that.
But I'm going to find Charlie Munger as my base.
Just look at history.
When you had a technological revolution like this happening, and this is the
biggest one in our lifetimes, bigger than the internet.
When the internet revolution happened, and you would have bought a selection of
companies, just choose a random 20 internet companies.
The most profitable way to basically...
that trade is buy those 20 and never ever sell your winners even if you win like
half a portfolio exactly,
I mean that's what Nasmus made his fortune on until recently never ever sell because
the Ted
Sitter just basically hold it on for 20 years and you did the best job you could
have done yeah
that's a good theory and it must be put to the test in an open forum,
thank you very much for your time and again thank you for giving me food for
thought David Shapiro is from SESC and Securities, if they're not listening, that
is.
I'm going to go and speak to the
committee at SESC.
How can you say that?
That's what I'm saying.
I'll back you up, David.
And Viv Govendit is from Ranswiss, and that was the 5 o'clock shadow.
The views and opinions expressed in these podcasts are those of Lindsay Williams and
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