Worldwide Markets - Episode 666 📊

18 February 2025 🇿🇦 South African Economic Indicators

• Unemployment hits 5-year low - but still a tragic 31.4%
• The Achilles heel: Need GDP growth to break below 20%
• 10-year bond yields at decade lows - 7.97% (down from 11% during load shedding)
• Government saving on new bond issuances, though impact is modest
• Potential budget windfall from precious metals next week

ZA 10-year yield | weekly

🤖 AI Valuations: Testing Anthropic's Opus 4.6

• Can AI do DCF valuations? Testing on Dell (NYSE: DELL)
• Opus 4.6 created detailed discounted cash flow model in ~10 minutes
• 148 formulas, zero errors (after self-correction)
• Fair value estimate: $172 vs current ~$115 (significant upside potential)
• ⚠️ Important caveats: Sensitivity assumptions critical (WACC, terminal growth, risk-free rate)
• DCF is just ONE valuation methodology
• Rate limiting kicks in with heavy usage ($20/month tier)
• US stocks work better than local stocks currently

💼 US Economy Update

• Strong fundamentals emerging:
  • $600B+ capex spend by hyperscalers (Alphabet, Meta, Microsoft)
  • Better-than-expected January CPI
  • Unemployment at 4.3% (jobs report revised down 1M though)
  • GDP tracking closer to 3% than 1-1.5%
• Two rate cuts still on the table for 2025
• Tech infrastructure spending providing economic underpin

🚚 The Karaoke Company Logistics Disruption (?)

• Algorhythm stock chaos: Up 222% Friday, another 15% pre-market Tuesday
• From karaoke company to AI logistics software ("SemiCab") in 6 months
• Entire logistics sector sold off on the news
• Reality check needed: Santova and others already doing this with Oscar software
• Market overreaction? Small operators still use fax machines
• Don't panic-short established players like Santova

📅 Upcoming Events

• Power Hour Thursday 5:30pm - Tax efficiency & ETF revolution (Standard Bank Rosebank or webcast)
• ETF database updated with FNB, 10X, 1nnvest, Satrix funds
• Budget next Wednesday - Simon will be in Cape Town

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"Look after yourself. If you can look after somebody else as well." 💚

Simon Brown

* I hold ungeared positions.

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