You're listening to Strictly Business Podcast with Lindsay Williams.
The 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 Skullclo, Portfolio Manager at PSG Wealth
Old Oak in Cape Town.
Now, we have to talk about a really big issue and it involves gold.
But before we do, Aspen Discovery and Woolies caught my eye today, notably.
discovery with a trading statement because the share price has gone up four and a
half percent did you have a glance at these numbers yeah i
had a glance i actually looked at a few of these these companies and you can you can
add into the mix uh
discovery as well because they they had a trading statement yeah as well that was
what i was talking about what did i
say i said aspen discovery and woolies and discovery was uh was for discovery four
and a half percent up
Yeah, 4.8 So I think all of them caught my eye.
I'm going to very quickly run through them.
For the listeners out there, Discovery, I think that was most probably the biggest
reaction today.
They actually came out with an operational update stating that the HEPS, or headline
earnings,
is expected to increase between 27% and 32%.
That's a massive, massive, massive jump.
And, yeah, that helped us to share price today, you know, increasing 4.78%.
So.
In general, we'll see when the results, the actual results come out.
They did have a bit of a breakdown of, you know, how the Discovery Bank and Alpha is
very, very,
very low key.
And I think, I presume we'll have a lot more info when the actual results actually
are being released.
But great day for them.
Aspen, we had the trading statement a few weeks ago.
We, you and I had this conversation about it just, just, The It doesn't seem like
they could catch a break.
I mean, they were just, you know, I think a few months ago,
they had this announcement that they're going to be producing this, what is this,
weight loss drug.
And, you know, there was a bit of a positive reaction, but the results just,
yeah, didn't look good.
It didn't look good.
You don't recover.
You remember that day we were chatting and I said, what's the story with asthma?
You said, goodness, I don't really know, because neither of us realized that this
thing had fallen over 30% in one day.
And when you get that sort of sucker punch like that, you don't recover from it.
You don't get up off the canvas using boxing terminology that quickly.
It's a struggle.
30% down, it takes a long time to get that 30% back.
Correct, correct.
Now, they're sitting with higher debt levels.
that they need to know I started off this conversation about Aspen catch-or-break.
They mentioned a few dispute manufacturing disputes and reasons why, you know,
talking about the manufacturing being down 62%.
There was a few reasons why we've seen this drop.
And, yeah, it's not one I'm holding.
But, I mean, even after the most recent uptick.
updates, trading updates, reaction to those trading updates.
We had a further drop of 1.5% drop in the share price today by Aspen.
So it's been one that's been struggling.
And then Woolworths, I mean, it's sort of I feel like a parrot,
just saying all over the same things every six months.
I mean, when are they going to get rid of the Australian businesses?
When are they going to spit the companies into two you know have a food company have
the fashion beauty and home
separate um so we're not going to do that again today now we're not going to do it
again today but the reason that i i've
started looking at wool is more closely is because of
that value investor gentleman i sent you his podcast and we can give him that give
him the miles it's john
bickford it's john bickford from 91 he's based in new york and he said i asked him
at the end of the podcast what is your favorite stock
at the moment.
And he said it was Woolies because he'd finished buying it and it had gone out of
the
MSCI. And he came up with these extraordinary statistics on companies that
have left the MSCI and have
subsequently gone on to greater things.
Now, I haven't looked at all of the companies that have been booted out, the
South African ones,
but it did sound like quite an illustrious list.
So Woolies is interesting.
If he likes it, then it's worth investigation.
yeah no no i mean definitely worth the investigation i mean it's just let's look
at the pros and cons uh
i mean usually when i take any any any investment i do your typical swat your
strength weaknesses opportunities and
threats and when you look at the strengths of of woolies it's it's it's a phenomenal
brand i mean it is
a company that's been been been doing doing really well specifically the food
side the margins always been able the
profit margins always been able to be higher than the counterpart, purely
because it's a bit of a,
one could say a premium brand to some of the other food producers.
But then you look at your weaknesses, fashion, beauty, home,
that's always been a bit of a lull business.
Because it's too fragmented, isn't it?
There's too many brands.
That's what we've always said.
Correct.
And then I think that the biggest weakness, which we'll go over today,
threat, Really,
the threat of the company continuing doing bad is the Australian businesses.
Now, they got rid of David Jones, but they still got the Country Roads Group.
And, I mean, when you look at the 52 results, which was brought out today,
I mean, sales for Country Roads down 5.4% again, you know, 6.8% like for like.
I mean, it's just when I go through this country road business, I mean, I just
don't.
get warm and fuzzy.
They got rid of it.
Now, Standard Bank had a nice comment today in their research report where they
said, well,
they don't think that the country roads group disposal is imminent, but, and
there's a big but,
they do think that the market will increasingly question how far away is
management from
reducing or further reducing their exposure to this region.
And I think that's a That's a very, very good question.
We know that they went far enough, I don't know if it's earlier this year or last
year, I mean, time is flying,
to physically get rid of David Jones, taking a big, big, big loss on the
original investment.
And I do think that management will get to a point where it would say, well, let's
just call it a day.
I mean, David Jones didn't work.
Country roads clearly is not working.
Let's just focus on what… we we've been doing and we've been doing well and that's
our our woody's brand so
let's see how that goes we you shop there though
right you you shop there don't you i do shop there okay now obviously the food is
is
exceptional compared to the competition although i suppose shop right is catching
up in certain areas but i mean woody's is
stand out but it's the clothes that interest me when it comes to you skulk
because when you get to a certain age as a man
You think to yourself, when you were young, you used to be able to wear this or
that and go to this shop and that shop, you know, cool shops.
Now, if you're going out to buy something, you go straight to Woolies, don't you?
No, I don't.
I actually do not.
Really?
I really do not have a single item in my wallet.
So where do you go?
I've got to, I mean, I'm not going to give these guys free mileage because I love
them to bits.
But, I mean, I'm a very firstly, I mean,
I'm one of those typical men that my wife needs to pull me out of the house kicking
and screaming at least once a year to
now we're going to do some clothing shopping for you.
I've got let's call it two or three very, very, you know, smaller
I don't want to say boutique because then you're going to think I'm oity-toity.
But it's just these three.
little shops that I've been supporting over the past 20 years.
I go in there.
I know the gentleman is going to look at me and he's going to say, well, we're
going to go for a 41 long.
It's going to go this, and it's going to be blue or white.
That's it.
Okay, I got you.
I walk out of there within four minutes and 30 seconds, and I've got a smile.
My wife's got a smile.
And now I'm fine for the next 365 days.
The reason I say that is because if I was in the UK, I would immediately go to Marks
and Spencer's.
I can't be.
bothered it's so complicated in london to find this independent retailer clothing
retailer that one i'll read up
about them in magazines i go straight to m&s and i suppose woollies is the
equivalent of m&s that's all i was saying but i'm glad
you're staying independent okay so we've done discovery aspirin was there anything
else on the jse today that stood
out No, I think
Cash Build had a trading statement as well.
I'm not going to go into them.
That trading statement is already, well, wait a minute.
No, it's a dividend story.
So that's just a 3.3% drop.
No, I mean, besides what is Aspen Discovery, I don't think there's been any
major.
All right, let's talk about the real story.
Now, I was watching my screen.
I use a company that covers the markets excellently, and it doesn't cost me
anything.
I'm looking at my phone, and it's quite late.
It's about half past 11, and markets are closed.
I mean, the official markets in New York and Chicago, et cetera, are closed.
And the gold price is flashing, flashing, flashing.
Every nanosecond, it's going to Newspaper.
On my screen, it was 3,600.
But there are various different screens, and that might have been a futures price.
But I saw this thing, and I thought, goodness me, something is going on.
We know what it's been.
Is this a blow-off that we should be scared of, gold investors, that is?
Or is this telling us something a little bit more sinister?
And then I looked at the bond market.
Now, the 30-year Treasury bond went through 5% in the last 24 hours.
Now, that's quite a big deal.
And that's the long end of the curve.
The short end is still behaving itself.
relative to the long end but i thought it's september is something gonna happen
or am i just looking for it
scalp am i looking for a sell-off tell me be brutal come on you're laughing you know
yeah
we've we've i mean until this is out there lindsay
myself do have you know sometimes we could could uh stock up a a very very nice
uh a nice bit of conspiracy every now and then and think that this will be the top
But the one thing that I think we've been calling not just for the past few months
but for the past, I would say, two,
three years is that little word stagflation.
Yes.
And
I still very much believe that everything is in place to bring us to the point where
we'll actually
see the stagflation.
And I think that's the main reason why we've seen these latest movements.
Now, to your first question, and I always say…
always always my crystal ball is the murkiest of murk on the best of days so to
to to tell you that
something will be happening um is is definitely i mean i'll i'll be guessing
all that i can
tell you is the gold price do not will
not have these type of movement if the market is not expecting something major to
happen quite right it will not it's been going you can go back
It's double.
Did you see that?
I put a chart on Twitter on X.
I couldn't believe it.
I mean, it's gone up in a straight line, which is always very dangerous.
But on the other hand, the fundamentals support it.
And again, our friend John Bickard came out with a very cogent argument on why you
should hold gold.
And he spoke about the equities as well.
What has happened to the equities behind this gold price, please, Skunk?
So, I mean, I sent you that graph.
I think yesterday or two days ago, I'm going to try and find it on X.
It was a tweet by Chris Scott.
And I think that will most probably be the one that's one of the biggest.
I don't think there's enough focus on this graph.
And this graph, they look at U.S. treasuries as a percentage.
of foreign reserve.
That's right.
I've got it if you want me to send it back to you.
But yes, go on.
I've got the graph.
The foreign reserves and also the gold holdings as percentage of the foreign
reserves within the central
banks, global central banks.
Now, we know that the fall of gold was there in the late 90s.
And back then, let's call it run about 95.
That's where for the first time ever where gold reserves dropped below the U.S.
Treasury reserves.
And since then,
it's just been most of the foreign reserves
by central banks was held in U.S.
treasuries.
For the first time since 1995,
gold holdings as percentage of foreign reserves now surpassed the U.S.
treasury holdings.
I think that's massive.
And we know that the Russians and the Chinese.
you know every single quarter you get the data from from uh you know different
different sources stating that they they were
they were buying some more more gold so um Now,
I think it's always been one of your best hedges and protectors against a
stagflationary environment.
And I think the market is telling us this time is going to be no different if that
should happen.
September, Skunk, September.
Maybe the cracks start to widen in September.
The markets, the equities markets and other risk assets are overpriced.
Someone's a...
big, big seller of Bitcoin.
It's OK.
It's stabilizing now, but it was down close to 106,000 versus its high of
124,000.
So someone's been getting out of that.
And they say that this whale wallet has been going into Ethereum,
but Ethereum hasn't exactly done well relative to Bitcoin. But anyway, that's
been going on.
The Treasury market at the long end breaking upwards in terms of yield and the
gold price through 3600.
I mean, come on now.
You've got to say that, and September, the month of September, which is statistically
the worst for stock markets.
Not October, it's September you've got to be scared of.
I think you'd better cancel your holiday to Tuscany.
And then you've got big companies, probably the biggest research company in
the world, namely J.P.
Morgan.
They brought out a research report, brought out by J.P.
Morgan Commodities Research.
They updated...
they outlook on gold saying that they expect gold now to breach
$4,000 per ounce in quarter two, 2026.
They actually put a date.
I mean, this is crazy.
This is crazy.
I mean, so, am I invested in gold?
For the listeners that have not been listening to this podcast, or the Five
O'Clock Shadow, at least,
on a Wednesday, day I'll been invested in gold for for for for many years now and
i'm i've made it clear i
think you asked me i think a few months ago am i considering you know taking
profit no i think that the investment case
for gold is still very much intact and
while that investment case for gold why i'm invested in gold in the first place is
still in place
i i i do think it still justifies I am holding in a poor way.
And the fundamentals are getting better since you first started buying it.
They've got better and better since you bought it.
So congratulations for buying it in the first place and holding on secondly.
But you didn't answer my question.
How are the equities doing compared to the actual gold price?
Oh, no, no.
So that's also a lovely question.
I mean, you actually we had this
I can't recall when we had this conversation.
But I think that this was most probably about eight months, nine months ago,
beginning of the year,
where the actual gold miners still lagged the gold price
in gold.
And back then, I mean, the gold price was high, but we said, well,
there's still opportunity.
If you haven't bought the gold miners, you can still get in.
They were still lagging, seriously lagging.
the couch I'm actually looking at the graph this was this was uh yeah beginning
of January they
were lagging massively lagging there now they did catch
up so I said make no mistake there's the the dripping roast is gone I mean you
getting into
the gold miners to say well of this
year the gold miser has has done way way way better than the actual gold price but
as you
just mentioned The fundamentals, the fundamentals.
of gold is still there.
I've never seen them this good, which also scares me.
It also scares me a little bit, because if everybody, if someone like me knows that
they're really, really good,
then maybe it is all over.
I don't know, but I just can't see it.
And when I see Harmony today up 9%, DRD Gold up 7%,
Pan-African Resources up 5.6%, etc., I think to myself, yeah.
These aren't just Johnny-come-lately, so I'm going to hold on to the coattails of
Skunk Low.
This is proper investing.
Yeah, because remember what Lindsay was saying when he talks about fundamentals.
We're not talking about the physical fundamentals only on the commodity gold.
We're talking about the miners.
Most of these companies have reported over the past, let's call it, four weeks.
And you mentioned some of them, Durban, Redipur, Deep.
Pan African, which is smaller ones.
And then we've got the larger one, Angler Gold, Goldfields and Armony, all of them
reported.
And all of them.
All of them stated that they pretty much got no debt anymore.
I mean, even Harmony that bought all of these Agno Gold South African mines a few
years ago,
their debt levels are suddenly looking great.
Their free cash flow is going through the roof.
And if these miners don't find any new mines to buy, new opportunities to invest
in,
we're going to start seeing them being pretty crazy dividend payers pretty soon
because they're going to sit for so much cash.
i mean debon riddiputiva i don't have it in front of me but they they reported two
weeks ago and they were sitting with 1.3 or
1.4 billion rand in cash on the balance sheet i mean this is a smaller mine that
was sitting with massive massive debt levels and just again i
i i time now to just go uh you know when i talk about the miners and i talk about the
gold usually we i like looking at the
etf the the largest etf for gold It's the one that they call the GLD,
and that's the gold ETF.
Yes.
That has done, since the beginning of this year up to yesterday's close, 24% in
dollar terms.
So that's a pretty great return.
That's just showing you that the gold price has done pretty phenomenal since the
beginning of the year.
And when you compare that to the gold miners, I like using the VanEck gold
miners ETF.
that's taking the biggest more...
let's call it established mines because they do have the the van eck junior miners
that's the upcoming gold mines but
when you look at the the van eck gold miners that has done exactly 60 percent up
to to the close of
yesterday over the same period so just comparatively the gold miners has done
better not a dripping roast anymore but
looking forward if we do see a jp morgan a squad forecast being spot on
gold surpassing $4,000.
Hell, don't be surprised if you see another 60 odd percent in gold miners.
I'm not calling that.
I'm just saying that these guys are geared to the gold price.
If the gold price move up with those amounts, these gold miners are going to do
a flipping well.
On the markets today, the dollar round is 1767.
Everyone's waiting for the US jobs numbers on Friday.
The British pound against the round 2374.
Euro round 2062.
Euro dollar.
116.75 that euro 0.4 percent higher against the greenback which is why
commodities are
being boosted on that note what have you got for the gold price i've got two
different screens what have you got please go spot gold uh i've currently got gold
price as a three thousand five hundred and sixty two dollars i've got i've got this
35.63 okay up thirty dollars
an ounce on on the day.
The Platon price up $50 to $14.62.
Hence, Valterra's good move.
We'll come to that in a moment.
And Palladium up $35 or 3% to $11.88.
Did I give the platinum price?
$1461 per ounce, 3.5% up.
Okay, what else have we got?
Why have I got the copper price up there?
I think it was because I was looking at it because Harmony bought into a copper mine,
didn't they, Skarp?
Was it Harmony or Goldfields?
Harmony, wasn't it?
No, it wasn't Goldfields, but why do I think it was?
Was it Harmony?
I thought it was Harmony, yeah.
You were talking about all the money they had.
I think they used some of it, but buying copper, which I think is a fantastic buy
long term.
The oil price, West Texas, 63.93, down 2.5%.
The Brent crude oil price, 67.57, down 2.25%.
But these are still just range bound.
I have got the South African 10-year bond yield closing at 9.645%.
That is up about two basis points.
The US 10-year is 4.222.
That's a 5.5 basis point fall in yield.
So the bond price itself is up.
The S&P 500 futures doing OK.
They're up 0.6%, getting back yesterday's losses.
6,462 for the September futures.
And what else have I got?
Bitcoin.
Bitcoin is 112,154, which is up.
1.2%.
So that's quite a decent rally in the last few days.
What about the stocks that have done well and done badly on the JSC today?
I've got Harmony up 9.1%, Valterra up nearly 9%, DRD, another digger, up nearly
7%.
Another digger, Pan African Resources, 5.7% in the green.
And just to complete the digger five, Sibania Stillwater chips in with a near 5%
gain.
On the downside, I don't know what ASPI is.
What's ASPI?
A scalp down 17.25%.
Nine rand, 10.
I don't know that on my screen.
So that, yeah.
Okay.
I think it's some property thing.
Anyway, NEDCOR down five and three quarters.
Is that ex-div?
Yeah.
They've got a 10-odd rand dividend.
Okay.
Resilient down four and a third.
Hammerson down 2.9%.
Nixaro down 2.8%.
you can chip in with any ones on the upside or downside that you so wish.
I think you covered them all.
I did see that CashPool did, in fact, a report.
Yes.
And, yeah, I think market just expect a little bit more because CashPool was down
3.3% for today.
That's the only one I could most probably add to the risk group.
But, jeez, man, what a day.
I mean,
I just finished my report two days ago on the uptrend of markets usually for August
where I look at, you know,
what the what resources have done.
We had resources doing phenomenal in August, starting the month off on Monday,
another two odd percent.
And here we go.
I mean, you read all those, you know, the Volterras up, you know, like 9%,
Armenia up 8.6%, Durban really put deep.
This is good.
Lindsay, I mean, the listeners out there, you know, from an African point of view,
and I did a tweet today.
I'm so glad it was taken with such a positive frame of mind from South
Africans.
Because we often so harden ourselves as South Africans, being such a proud nation.
When we do well, we're so proud.
But when the Portillas lose a game or two, they often do refer to us as the jokers.
I mean, last year, last month, we were playing against Australia.
just let me get my handkerchief first before you carry on I've got a real tear
in my eye see
you such a lovely story no no no wait for it,
if you didn't watch the match I promise you I'll have you in tears now because I
mean losing a game
38-22 after leading the game 22 I watched the match don't worry and I have to say it
was the most
extraordinary collapse I've ever seen particularly from the best team in the
world, in my opinion.
Correct.
I mean, we're not used to losing coming from the spin box.
But the next day, it was as if we lost a family member.
I mean, it was so sad.
That's not what's got me reaching for the handkerchief.
It's the whole South African thing.
We're such a proud nation.
And, you know, if this happens, that happens.
But I'm so happy.
But you know it.
You know it.
Five years ago.
I mean, some of these commentators, I mean, they were still talking.
People say, get your money out of the South African market.
Get it out of JSE.
Just go invest in offshore.
And usually that offshore is not just offshore.
It's S&P 500, which is just the U.S.
Now, I know it's 60% of the MSCI all-country world or 70% of the MSCI
world.
But as we sit here today, as we sit here today, the JSE.
In a five-year period where the S&P 500 has done over 113% in RAND terms,
the JSC did more.
We're not celebrating that enough.
In US dollar terms, you're quite right.
And I saw your tweet and I've seen you on LinkedIn as well.
So, yeah, congratulations.
It is a reason to celebrate.
Just be careful, everybody,
not to get too carried away and be ready to take protection should the market start
to crack.
Give us the closing JSC indices, please, Scalp.
We've run out of time.
Off you go.
Oh, there we go.
I can see.
JSE today closed at 101,515 points.
That is up 34 basis points.
Resources led by a country mile, 3.44% up for today,
while the rest of the indices were down.
I mean, we had the industrials down 16 basis points, financials down 1.3 basis
points, and the property index,
the property sector, that was down a whopping 1.7%.
When we look at the value traded through the market, not a bad day at all.
We've seen just over $33 billion traded through the JSC.
Very similar to yesterday, so that's always a good sign.
So now let's see.
Let's wait and see and see how the U.S.
goes.
I know they upbeat after Google.
It seemed to like they don't need to go and sell Chrome.
That's up over 7%, so that's, I would say, keeping the S&P 500.
in positive territory.
But I feel nervousness coming from that side, definite nervousness.
So do I.
And we will talk about that nervousness to see if it's manifested itself on the
market screen next Wednesday.
Scott Lowe is a portfolio manager at PSG Wealth Old Oak in Cape Town.
And that was the five o'clock shadow.
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