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

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The JSC has closed its doors for another
day, so it's time for the five o'clock

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shadow.

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And as it's a Wednesday, I speak to Skulk
Lowe.

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Skulk Lowe is a portfolio manager at PSG
Wealth Old Oak in Cape Town.

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There was something that happened
yesterday which interested me and it said

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across the news wires that the Nasdaq is
down

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because of people saying that the AI boom
is overdone.

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That was the sort of inference.

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They didn't say it in those words, but
they said they're questioning the

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development of AI.

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Had to happen, didn't it, Skalk?

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Yeah, it had.

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And firstly, you know, hello, Lindsay.

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How are you doing?

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I'm all right.

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Yeah, it's interesting.

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I mean, David Shapiro and myself, we had a
conversation today.

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See, I'm doing a bit of name dropping
there.

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We were joined in an interview,

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and they asked him on a company.

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Let me quickly see what's the company
again called.

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It was Palantir. Oh, Palantir, yeah.

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They got well in yesterday, 7%, I think,
and today again down two or three, I also

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think.

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Correct.

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It's correct.

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I mean, I don't know the company really.

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It made me went and look because naturally
this is much more.

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a David Tuff company.

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He loves these tech companies, these AI
companies.

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Yes.

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And now, firstly, this drop that you just
mentioned, I mean,

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this wiped out $75 billion in pretty much
five days.

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Now it had me interested.

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I had to go and look.

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So this company, I mean, do you know the
companies, by the way?

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I know it.

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I know it's high profile.

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I know people sort of revere it.

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There's somebody on LinkedIn.

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I work for Palantir and, you know, very,
very glossy.

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The way I can sort of describe it is a
glossy company.

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It is.

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But the moment I start reading this, what
is that, Marty,

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back to the future?

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It felt going back to 2000.

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And, you know, I had this exact
conversation exactly a week ago.

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where we talked about i mean i get this
2000 bubble feeling i mean i just get this

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feeling as i read this this

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company is a it builds software uh for for
big analytics and most specifically

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it builds it for ai um and

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it's integrating all these data sets but
it's a it's a high profile software

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company specifically for

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ai now this company um is trading at wait
for it

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A PE ratio of 250 times.

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There we go.

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The clock has automatically gone back in
my head.

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Exactly, exactly.

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Because, I mean, and for the listeners
that don't want to, you know, now go pull

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up last week's interview.

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I mean, Lindsay and myself, all that I
said is I feel 2000 because why 2000?

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2000, we went into 2000.

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there was a thing called The internet and
analysts and economists and every person,

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even the secretaries,

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mentioned that the internet is going to
take over the world.

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Which it has.

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Yeah.

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You're not going to go stand in a banking
queue anymore.

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You're not going to book a flight ticket
going to the flight center.

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You can actually do it on the internet.

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This disruptor is going to see these
companies,

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the likes of the Microsofts and the
Ciscos, because the Ciscos are 2000 to

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2002,

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and not just 2002, and way beyond we know
what the effect was of the internet.

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But the share prices, Microsoft, on that
stage the largest company in the world,

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dropped by 51%.

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General Electric, or actually Cisco
Systems, the second largest company in the

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world, connecting these, it dropped 76%.

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And General Electric, which built the
electric boxes for computers for us to use

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the thing called

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the internet, dropped 56%.

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The three largest companies in the S&P 500
at that stage dropped way more than 15%.

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And that's...

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When I read this Palantir article, Citroën
Research is a research company.

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They just said, they came out, I think it
was something that was, I can't remember

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which,

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it wasn't Bloomberg, but it came out,

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brought out an article or research report
reporting that Palantir can't be trailing

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at 250

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times P.E.

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I mean, it just can't.

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they feel that the share price has got
to...

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got a fair value of 40 Rand a share.

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Now, just after yesterday's drop, it's
still trading around about the $158 level.

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So, I mean, and so there goes the...

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Yeah, you see, it's very sad that I can
only name drop the name that you've

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already name dropped,

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namely one David Shapiro.

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But I had a conversation with him and I
said, David, you can,

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I'll show you a graph of the S&P 500 over
the last 50 years.

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or since inception, since the thing
started, which was, I think, in the 1950s,

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so 75 years, something like that.

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And I will show you these big drops.

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See these drops?

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See these peaks?

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That was because of this, and that was
because of that.

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Overblown markets, I said.

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We've seen it all before.

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David is 78 years old.

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He's seen it all before, and yet he won't
get out of his NVIDIA.

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And I'm not being nasty about David.

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He's saying, until otherwise advised, I'm
going with it.

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And that's it.

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And then one day, like the musical chairs
analogy that you made last week,

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the music stops and someone gets someone
gets messed up.

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And it's usually the private investor
because the market will fall dramatically.

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And the problem is that there are far too
many things that are pointing towards, as

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somebody said,

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a reappraisal of the stock market.

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And we can go through it.

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We can go through tariffs, potential
stagflation, geopolitics, etc., etc.

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It goes on.

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And the market doesn't care.

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Extraordinary.

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We'll look back and say, why didn't we
short that thing?

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Why didn't we buy puts when they were so
cheap?

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It's a question of timing.

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That's all.

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It's always hindsight is an absolute
perfect, perfect science.

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And there's listeners out there that are
saying that we are now, let's not throw

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you under the bus here.

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Scott, you are actually up a negative.

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I mean, these companies are still quality
companies.

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I totally agree.

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I mean, here we're sitting today, and
NVIDIA is the largest company in the

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world, but I think the second largest,
yeah,

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second largest is still Microsoft.

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So, I mean, if David Shapiro, and again, I
hate bringing in David because he's not

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here.

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We should actually bring him in.

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No, it's much better talking behind his
back.

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Go on.

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David, if you listen to this, and I know
you will, I love you, man.

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But no, I mean, David's argument is also
100% true.

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He had, hypothetically, had Microsoft back
in 2000.

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And here we sit in 2025.

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It's still the second largest company,

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and it's still going to provide a super
return over a 25-year period.

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Yes, it struggled for the following two
years.

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And yes, it took about, well, I think
eight nights.

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eight to ten years to actually just break
even again but that said it's still super

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and it's quality companies and

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in most cases will still be in existence
when we sit here 25 years from now but yes

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microsoft will yeah it is a

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stalwart it'll always be there it'll go
down with with the rest of them uh but the

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ones that won't bounce back are the

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ones that you should be looking at now and
say to yourself is palantir going to be

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there is it going to be able to recover
after such a big

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smash I mean, look at, for example, A
dimension data in the old days when it

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listed,

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there was an off-market print of something
like R110 a share.

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Where did it end up, Scott?

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Where did that end up?

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I recall R2 and R15.

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It went all the way to R115. I think it
was on one stage.

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It was well within the top 10, very close
to one of the largest shares on the JSE.

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And eventually when it delisted, it was R2
a share.

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Yeah.

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And that can happen to other companies.

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That was an extreme example.

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But yeah, the market does look as though
it's a little bit complacent and it's

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vulnerable to a shock.

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And the shock could be stagflation.

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We exchanged a couple of messages today
via WhatsApp.

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And it's an interesting story because
that's the greatest enemy of the investor

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is stagflation.

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And that's after a depression or a really
deep recession.

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stagflation horrible in other words you've
got prices going up and growth going down

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so yeah

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there's signs of it that's all i'm saying
exactly but i mean i think back to today's

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news i mean

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stagflation is still i mean this is a
conversation you and i've had for for

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three years and it

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feels like we we on this on this train i
mean and just going clackety clack

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clackety clack all the way way to stack

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flash.

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Nothing has convinced me that...

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that we're not going to see it.

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Nothing, nothing.

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I mean, if you look at the gold price, and
that is one of the largest reasons why I'm

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such a gold bull.

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I haven't been a gold bull all my life.

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But I mean, this recent data, or let's
call it the data of the past three years,

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just showing I feel that we're going
towards this.

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Back to where we're sitting today.

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I mean, we're seeing quite a big drop in
international markets.

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We'll touch on them individually today,
but we've seen...

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specifically from the US tech stocks, a
major drop.

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So two reasons for that.

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Yeah, I think you're right.

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There's sort of a nervousness suddenly
about these AI stocks.

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But also, I mean, we had this conversation
exactly a week ago and then a week before

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that.

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So that conversation is interest rates.

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Interest rates, which actually came out, I
think, Just after the Fed kept...

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interest rate unchanged, the Fed CME tool,
the CME Fed tool,

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went from a probability around about 60%
that we'll see a rate cut at the

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17th September, which is the next Fed
meeting, and then gradually moved to about

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80%

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beginning of last week.

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Wednesday, exactly a week ago, just before
the PPI numbers came out,

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it went up to 99.9%.

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And you and I still have the conversation.

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Are we going to see a 25 basis points or
what?

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Or 50.

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Yeah, the 50.

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Here we're sitting a week later and
suddenly the market is getting seriously

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nervous if we're going to see any great
cut.

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That is now only at 85%.

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I'm going to say only,

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I'm saying a tongue in the cheek because
most statisticians and mathematicians will

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wink at me now and say, well, 85%, come
on, Scott, don't be a half empty glass.

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That's still pretty much done and dusted.

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Yes, I still believe we're going to see a
done and dusted.

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But suddenly my conversation on maybe a
0.5 would be better than a 0.25

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with the probabilities dropping.

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I don't know.

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We'll see the Fed minutes later.

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We'll also see the Jackson Hole minutes
next time that we speak because all the

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central bankers are

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converging on Jackson Hole as they do
annually.

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And we'll hear from J-PAL and see what
he's got to say.

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And I think after that, there'll be much
more clarity.

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Let's look at some markets now, Scott,
because they're starting to become

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interesting.

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Dollar Rand, fairly much unmoved on the
South African inflation jump today.

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We saw CPI going from 3% to 3.5% annually,

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and that's quite a big move.

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But Dollar Rand waiting for Jackson Hole,
1770.

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00:12:47.834 --> 00:12:54.200
The Euro-Rand is 2064, and the British
pound against the Rand, 2383,

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with the Euro-Dollar 116.60.

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00:12:56.278 --> 00:12:58.083
That's the Euro up 0.3%.

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00:12:58.084 --> 00:13:01.747
British pound against the US dollar is
134.65.

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00:13:01.748 --> 00:13:04.544
The pound up 0.4% commodities.

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00:13:05.013 --> 00:13:06.778
Gold price doing nicely, thank you very
much.

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00:13:06.794 --> 00:13:11.278
33.44, up 0.9%, we'll call it.

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00:13:11.622 --> 00:13:16.466
The platinum price, 1.75% higher, at
$13.36 an ounce.

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00:13:16.818 --> 00:13:19.539
Palladium flat at 11.12.

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00:13:19.658 --> 00:13:22.597
Now, if we have a look at the oil price,
it's had a bit of a jump today.

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It's messing around the 65 to 67 area for
a while now.

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00:13:28.621 --> 00:13:32.441
Brent crude oil, $66.48, up just over 1%.

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00:13:32.816 --> 00:13:38.504
And West Texas crude, $62.40, also just
about a percent higher.

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00:13:39.285 --> 00:13:41.707
Okay, other things of interest.

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The South African 10-year bond yield.

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00:13:43.894 --> 00:13:49.501
It has gone up a little bit, but not much,
9.655%.

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00:13:49.502 --> 00:13:55.243
The US 10-year was in the 4.30s yesterday,
4.28% now.

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00:13:55.743 --> 00:13:58.727
S&P 500, down a percent now,

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00:13:59.188 --> 00:14:03.930
63.70 on the September futures.

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00:14:04.321 --> 00:14:07.977
Let's have a look at the Bitcoin price, a
two-month low at the moment.

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00:14:08.243 --> 00:14:08.993
It was anyway.

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00:14:09.446 --> 00:14:10.227
It's rallied a bit.

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00:14:10.514 --> 00:14:17.219
It's up slightly to just below 114,000,
113,941.

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00:14:17.559 --> 00:14:19.247
Where's the NASDAQ, please, Skulk?

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00:14:20.442 --> 00:14:23.387
As we sit here, as I mentioned, the NASDAQ
is currently down 1.5%.

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00:14:23.450 --> 00:14:27.684
So it's fighting with that 21,000 mark.

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00:14:27.731 --> 00:14:28.934
So interesting.

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00:14:29.450 --> 00:14:30.150
Sharp pullback.

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00:14:30.150 --> 00:14:33.934
I mean, it's really, really a recent sharp
pullback in the NASDAQ.

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00:14:33.950 --> 00:14:35.778
So just, yeah, watch this space.

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00:14:35.903 --> 00:14:37.137
Yeah, and watch the VIX as well.

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00:14:37.153 --> 00:14:38.325
Have you been watching the VIX?

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00:14:39.151 --> 00:14:42.256
It's starting to tick up, isn't it?

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00:14:43.819 --> 00:14:44.519
Correct.

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00:14:44.519 --> 00:14:46.385
That's usually a great indicator as well.

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00:14:47.408 --> 00:14:48.108
Okay, good.

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What else have we got?

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00:14:48.909 --> 00:14:51.593
Let's have a look at the JSC and the
movers on the JSC.

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00:14:52.933 --> 00:14:57.296
Just quickly before we look at today's
stuff, we've had results out from the

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00:14:57.296 --> 00:14:59.296
banking sector.

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00:14:59.296 --> 00:15:03.007
And when you look at them, you take the
traditional banks and you shunt them

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00:15:03.007 --> 00:15:05.007
aside.

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00:15:05.007 --> 00:15:05.663
And then on the other side, you've got
Capitec.

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00:15:06.632 --> 00:15:08.351
It's a no-brainer, isn't it?

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00:15:08.366 --> 00:15:09.066
Or has been.

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00:15:10.038 --> 00:15:15.601
Yeah, it's one of those things where you
also pull up a graph over the past.

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00:15:16.293 --> 00:15:21.338
20 years and keep on convincing yourself
it was a no-brainer all the time.

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00:15:23.120 --> 00:15:24.717
But it's just a phenomenal story.

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00:15:24.718 --> 00:15:26.342
It's a phenomenal South African story.

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00:15:26.343 --> 00:15:27.043
It really is.

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00:15:27.043 --> 00:15:28.944
It's been phenomenal.

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00:15:29.163 --> 00:15:35.850
Hopefully their forays overseas don't
scupper that great story, as it has done

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00:15:35.850 --> 00:15:37.850
for certain other companies, which we
won't mention.

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00:15:37.850 --> 00:15:42.225
But I'm sure that there won't be any
hiccups with Capitec. They're so well

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00:15:42.225 --> 00:15:42.238
managed.

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00:15:43.163 --> 00:15:44.022
I've got Tungela.

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00:15:44.372 --> 00:15:45.072
Up 4%.

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00:15:45.133 --> 00:15:49.158
Had a horrible time when its results came
out, but now a little bit better.

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00:15:49.838 --> 00:15:50.580
Up nearly 4%.

300
00:15:50.799 --> 00:15:52.838
British American Tobacco up 2.2%.

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00:15:53.377 --> 00:15:55.400
Investec up just over 2.5%.

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00:15:55.401 --> 00:15:56.604
Northern up 2.4%.

303
00:15:56.963 --> 00:15:59.229
Investec Limited up just over 2%.

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00:15:59.650 --> 00:16:04.346
On the downside, the property company
Mass, M-A-S, down 6%.

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00:16:04.830 --> 00:16:06.768
Kumba Iron ore down nearly 5%.

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00:16:07.174 --> 00:16:09.033
South 32 down 2.75%.

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00:16:09.174 --> 00:16:10.955
Life Healthcare 2.75%.

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00:16:11.002 --> 00:16:12.205
Weaker after their numbers.

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00:16:12.346 --> 00:16:13.046
And Woolies.

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00:16:13.468 --> 00:16:14.649
Down 2.5%.

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00:16:14.650 --> 00:16:16.071
Any ex-divs there, Skalk?

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00:16:17.032 --> 00:16:18.595
No, no, not that I can see.

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00:16:19.813 --> 00:16:22.056
So this is all market movements.

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00:16:22.681 --> 00:16:23.381
Okay.

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00:16:23.381 --> 00:16:26.282
In that case, just give me the closing
indices on the JSC, if you would.

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00:16:27.360 --> 00:16:31.899
So the JSC today closed at 101,056 points.

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00:16:32.806 --> 00:16:35.134
It's fighting to keep itself above the
100,000.

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00:16:35.368 --> 00:16:36.665
Luckily, not a big drop in the market.

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00:16:36.727 --> 00:16:42.571
It's only 0.14%, but as we see the U.S.
trading lower and lower.

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00:16:43.004 --> 00:16:49.830
this could be interesting day for tomorrow
the resource index was down 27 basis

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00:16:49.830 --> 00:16:51.830
points industrial index 15 basis points

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00:16:51.830 --> 00:16:57.138
and the financial index that was down only
one basis point so remain pretty much

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00:16:57.138 --> 00:16:59.138
unturned you mentioned the sa property or

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00:16:59.138 --> 00:17:01.685
property some of the property stocks uh
which was um

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00:17:01.841 --> 00:17:08.232
i want to mention something something
clicked when you said property stuff when

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00:17:08.232 --> 00:17:10.232
you talked about companies that's
struggling abroad but

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00:17:10.232 --> 00:17:13.952
because my property index That had a
phenomenal day today, 0.76 up today.

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00:17:13.953 --> 00:17:18.618
When you look at the value traded in the
market, market was traded at 21 billion,

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00:17:18.672 --> 00:17:21.001
so still not a bad day.

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00:17:21.016 --> 00:17:26.797
We haven't seen a, let's call it, below 20
billion day for any day the past week.

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00:17:26.860 --> 00:17:28.219
So solid, solid trading.

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00:17:28.485 --> 00:17:34.313
Okay, and next week, if we have the time,
I want you to remind me to talk about why

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00:17:34.891 --> 00:17:40.109
Trump's policies are leaning more towards
China than you might think.

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00:17:40.128 --> 00:17:45.414
I mean, not towards China, embracing
China, but actually embracing some of

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00:17:45.414 --> 00:17:47.414
China's policies.

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00:17:47.414 --> 00:17:48.007
And I'll tell you why next Wednesday,
Skulk.

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00:17:48.351 --> 00:17:50.187
But thank you very much for your time, as
always.

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00:17:50.250 --> 00:17:54.648
Skulk Lowe is a portfolio manager at PSG
Wealth, Old Oak in Cape Town.

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00:17:54.679 --> 00:17:56.039
And that was the 5 o'clock shadow.

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00:17:56.711 --> 00:18:03.679
The views and opinions expressed in these
podcasts are those of Lindsay Williams and

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00:18:03.679 --> 00:18:05.679
various contributors and do not reflect
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00:18:05.679 --> 00:18:08.195
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00:18:08.536 --> 00:18:12.378
or company associated with
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00:18:12.843 --> 00:18:19.827
Assumptions made on the analyses are not
reflective of the position of any other

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00:18:19.827 --> 00:18:21.827
entity other than the speaker or the
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00:18:21.827 --> 00:18:25.991
And since we are critically thinking human
beings, these views are always subject to

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00:18:25.991 --> 00:18:27.991
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00:18:27.991 --> 00:18:28.132
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00:18:28.460 --> 00:18:30.851
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