🎯 Tariff Talks: Where Are We Now?

Simon Brown recaps the evolution of Trump-era tariffs, with recent developments around:

• US-China deal: effective 54% tariff on Chinese goods, 10% on US goods

• UK, Mexico, Canada, Vietnam likely settling around 10%

• Expectations for other regions like EU, Saudi Arabia, South Africa

• Conclusion: tariff escalation seems contained, reducing recession risks

Key Insight: Markets are stabilising as the worst-case tariff scenario is dialed back.

Trump targets high drug prices in the US, pushing for:

• 30-day deadline for pharmaceutical companies to lower prices

• Unclear legal basis; possible price controls debated

• Pharma stocks bounce back slightly after initial drop

Simon’s Take: Healthcare is risky for investors due to constant regulatory pressure — he stays away.

Lewis expects a 55–65% EPS increase, sparking:

• A ~16% stock price surge

• Ongoing share buybacks and high dividends (7.8% yield)

• Strategy: loan book expansion, carefully managing bad debts

Verdict: Strong fundamentals, still looks cheap. Simon and analysts are bullish. 📈

First results since Boxer listed:

• Modest headline earnings (new shares diluted results)

• 25 new superstores & 35 liquor stores planned annually

• Operating margins on par with Shoprite* (~5.5%)

• Stock trading at fair valuation (R64.77), analysts' target: R76.66

Insight: Promising growth but priced in. Shoprite still Simon’s preferred pick. 🏪

Highlights from AngloGold’s trading update:

• 7x increase in free cash flow

• New dividend policy: $0.125 quarterly minimum + 50% of FCF

• 26% production increase (aided by Egypt acquisition)

• Concerns: strong rand + weak gold price pressure the stock

Simon’s Position: Holds the stock, likes the dividends — cautious on expansion. 🪙

Property sector comparison:

• Calgro M3*: Sub-R1m homes, shifting from gov’t subsidies to open market

• Balwin: Mid-to-high-end units (R1.1m–R3m+), annuity income from parks & amenities

• Both cautious due to election risks and past invasions

Bottom Line: Simon owns Calgro, likes both for their contributions to housing. 🏡

Simon Brown

* I hold ungeared positions.

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🧓 Warren Buffett Steps Down as CEO of Berkshire Hathaway

• Buffett officially steps aside as CEO at age 94, replaced by Greg Abel.
• Still remains Chairman
• Berkshire A shares up ~44,000% since the 80s
• No dividends ever paid, only share buybacks
• His legacy: simplicity, repeatable process, and long-term vision
• Emphasis on reading years of balance sheets and loving cash flow
• Fun fact: 96% of his net worth came after age 65

• Stick to quality companies at reasonable prices
• Focus on permanent capital and compounding
• Keep your process simple and repeatable
• Don’t chase hype — focus on fundamentals
• South Africa's Chris Seabrooke noted as a local Buffett-like investor

• Simon critiques the old market adage.
• S&P returns from May–October average 0.49%, Nov–Apr average 1.02%
• Transaction costs, taxes, and missed rallies make timing unreliable
• Verdict: It's a nursery rhyme, not an investment strategy

• OPEC+ accelerating production increases
• Brent now ~$60/barrel

• ✅ Good for fuel prices & oil consumers
• ❌ Bad for Sasol (though price hasn’t reacted much)
• 🏚️ Fracking rigs in US may shut down if prices fall further
• Possible geopolitical angle: helping Trump by lowering gas prices

• ZAR at R18.24/USD, nearing a key R18.30 technical level
• Boosted by stronger exports, higher gold prices
• Could trend toward R17 if momentum continues

• Gold bouncing back above $3,000 after recent dip
• Driven by:
  • Central bank buying
  • Rebound in ETF inflows (especially in Europe, Asia, and US)
  • General inflation and recession fears
  • Upcoming FOMC decision adding fuel to the rally

• Fed expected to hold rates
• US inflation stickiness, strong jobs data, and political independence from Trump all in play
• Simon expects no change but criticizes SARB for being too hawkish despite low SA inflation (2.7%)

• Q1 Revenue up 39% YoY to $884M
• Customers up 39%, EPS (non-GAAP) at $0.13
• Price-to-book: 58x ⚠️
• EV-to-sales: 100x ⚠️
• Heavy stock-based comp = shareholder dilution
• Analysts split: mostly neutral or bearish
• You’re investing in Peter Thiel’s vision, not value metrics

Simon Brown

* I hold ungeared positions.

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🎙 Episode Summary: This week, Simon unpacks Alphabet’s surprisingly cheap valuation, troubling US economic data, South African CPI figures, Trump’s trade mess, and the implications of Aspen’s customer fallout. Plus, he previews the Berkshire AGM and upcoming JustOneLap events.

📉 US Economic Data Shock

• Q1 GDP: Expected +0.2%, came in at –0.3% 😬

• Imports surged 40%, skewing GDP down

• Retail inventories and trade balance signal deeper issues

• PCI inflation at 1.8% vs. 1.2% expected

• Recession fears intensify

US GDP Q1 2025

🇺🇸 Trump’s 100-Day Trade Tangle

• Trump promised 90 trade deals in 90 days — none signed yet

• India might come to the table soon

• Tariff chaos continues, shelves may empty by July

• Xi Jinping not engaging — trade uncertainty remains high

📊 Alphabet (GOOGL) is Looking CHEAP

• PE under 20, forward PE ~17 🔥

• YouTube: $9B in rev, larger TV share than Netflix

• Cloud turning profitable; Waymo surging

• Risks: Antitrust cases, weakened core search, AI competition

• Analyst sentiment: 13 Strong Buys, 39 Buys, 12 Holds

• Price targets: Avg $202, High $240

🧠 Search Wars: Google vs. AI

• Google Search = cluttered & ad-heavy

• Simon prefers Perplexity & ChatGPT for clean, accurate info

• Questions around ad revenue in AI-driven search era

💥 Aspen: Trust Broken

• Lost a major take-or-pay client 🧪

• Share down ~33%; questions around facility utilization

• Replacing lost volume could take 12–18 months

• Confidence in management fading

Aspen | Weekly 29 April 2025

📉 SA CPI Drops to 2.7%

• Well below target band midpoint of 4.5%

• Inflation lowest since mid-2020

• Will SARB cut rates? Depends on FOMC outcome on 7 May

📚 Budget 3.0 Incoming

• New budget after VAT hike rejection

• 21 May – Stay tuned for more policy drama

🏛 Berkshire Hathaway AGM

• Saturday @ 14:30 SA time 🧓

• First meeting without Charlie Munger

• Warren Buffett expected to address investment outlooks and succession

Simon Brown

* I hold ungeared positions.

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Gold Pullback in Focus

• Gold surged to $3,500 before a sharp pullback to $3,321.
• Simon breaks down what caused the spike — including comments from Trump about Powell and rate cuts.
• Weekly chart shows potential kangaroo tail reversal — possible zone to watch: $2,800–$3,000.

Gold | Weekly | 23 April 2025

• Trump critiques Powell and Fed policy while possibly setting up a scapegoat.
• IMF cuts global growth forecasts from 3.2% to 2.8%.
• South Africa's expected GDP is now at 1% — far below Treasury’s 1.9% target.

• China's dominance in rare earths: 69% production, 90% processing.
• Simon looks at the VanEck Rare Earth/Strategic Metals ETF (REMX) as a thematic play.
• Pros & cons of investing in rare earths — not fully sold on the ETF himself.

• Remember April 2020? Oil went negative (-$40.32)!
• Breakdown of why it happened (physical settlement, lack of storage).
• One of the wildest moments in market history.

21 April 2020 | WTO goes negative

• Sodium-ion batteries could rival lithium: cheaper, safer, fast-charging.
• CATL is profitable and pays a dividend, but listed in Shenzhen, making access tricky.

• Brief mention of Aspen's contract dispute and loss.
• Lack of transparency continues to damage trust in management.

Simon Brown

* I hold ungeared positions.

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• Goldman Sachs suggests gold could plausibly hit $4,500/oz by year-end.
• Gold is currently around $3,200/oz, but volatility and uncertainty are driving prices higher.
• Gold miners are benefiting from the price surge, with big leverage showing up in earnings.
  • Example: Pan African Resources made $900/oz at $2,250; could make $2,900 at $3,250.
• Big upside still possible if gold just holds or drifts higher.
• SA gold stocks (YTD performance):
  • Pan African Resources +106%
  • Harmony +76%
  • AngloGold Ashanti* +72%
  • Gold Fields +30% (with mine-related issues)

Gold | Weekly chart |15 April 2025

• Larry Fink (BlackRock) & Jamie Dimon (JPMorgan): “US may already be in a recession.”
• Trump’s constant tariff changes add more uncertainty.
• Growth is slowing, and inflation is stubbornly high (risk of stagflation).
• Treasury buyers are hesitant—money is going into gold, not US 10-year bonds.
• China's potential bond moves could rattle the entire global system.

• The Rand recovered from nearly R20/USD to around R18.75/USD.
• Driven by dollar weakness, global uncertainty, and DXY dipping below 100.
• Local support for ZAR remains tentative but improving.

• Satrix RESI ETF* now ~50% gold miners, up ~44% YTD.
• Resource-driven tax windfalls (like in 2021/22) show how profitable miners benefit the broader economy.

• Purple Group* (EasyEquities) finally breaks out:
• Strong results: HEPS up 204%.
• Thrive initiative charging inactive accounts adds meaningful revenue.
• Stock rallied from 92c to 118c in just over a week.
• Possible end to aggressive selling pressure—more upside ahead?

Simon Brown

* I hold ungeared positions.

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• Budget framework passed (barely) – VAT increase to 15.5% effective 1 May.
• GNU under pressure as ANC signals reformulation talks with partners.
• Rand volatility: Touched nearly R19.90/USD before recovering to ~R18.70.

• S&P 500 down 18.25%, Nasdaq down 22.5%.
• Massive selloff: One of the steepest 4-day drops since 1950.
• But historically, markets rebound over 1, 3, and 5 years post similar dips.

S&P500 | Weekly | 08 April 2025

• 104% tariffs on Chinese goods kick in; highest in 100+ years.
• Aimed at reshaping global trade, raising revenue (~$600B–$1T est).
• Massive uncertainty over whether Trump reverses course.
• Impacts already visible: Nintendo delays Switch 2 US preorders.

• Supply chain shocks, rising costs, and job losses in producing countries (Vietnam, China).
• Major US banks now see a >55% chance of global recession.
• Countries shifting alliances; US being carved out.

• Wild 10-year yield swings overnight – unusual volume raises eyebrows.
• Could China be retaliating by offloading US debt?

• Avoid panic. Focus on quality and defensive stocks.
• Opportunities:
  • SA: Capitec, Shoprite*, BIDCorp, RSA Retail Savings Bonds
  • Global: Ferrari (Race), Johnson & Johnson, ASML, Europe
  • Sectors: Healthcare (STXHLT), Tobacco, Alcohol, Staples

Simon Brown

* I hold ungeared positions.

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Chapters 00:00 Market Overview and Budget Implications 02:59 Global Economic Concerns and Market Reactions 05:54 Trade Wars and Tariff Impacts 09:10 Investment Strategies in Uncertain Times 12:04 Sector Analysis: Opportunities and Risks 14:58 Future Market Predictions and Closing Thoughts

Simon Brown chats with Glynn Allen from Shyft Global on the history of the app and the recent introduction of JSE shares and a look ahead to new features.

• After a rough start, Monday’s trading saw a small recovery. But with Trump’s "Liberation Day" tariff announcements looming, markets could be in for more volatility.

• The ANC lacks votes to pass the postponed budget, with opposition parties like MK and EFF holding out. Political and economic uncertainty remains high.

• Gold (+19.5%), Copper (+26.5%), and Rhodium (+24.5%) lead the way, while oil and aluminium lag. The CRB Index is up 5.4% year-to-date.

• Q1 GDP estimate revised to -0.5% from -2.8%. Adjustments for gold trade data make the outlook slightly less dire.

• Stock down 20% from its highs, with a historically low P/E ratio of 34. Analysts see upside potential.

Amazon | Weekly Chat | 31 March 2025

• Trading near $165, with a potential drop to $150 making its 3% yield even more attractive.

Johnson & Johnson | Weekly Chat | 31 March 2025

• Nvidia, Palantir, Novo Nordisk, and more available via FNB, offering exposure to top global stocks with local accessibility.

Simon Brown

* I hold ungeared positions.

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00:00 Market Overview and Economic Indicators 03:09 US Tariff Implications and Market Reactions 05:45 Commodities Performance and Economic Impact 09:03 Stock Analysis: Amazon's Market Position 12:00 Stock Analysis: Johnson & Johnson's Stability 14:38 Investment Strategies and Innovations

• Stadio: Strong performance with double-digit growth and 50,000+ learners. Benefiting from a shortage of university spaces and the struggles at UNISA. Potential for further growth through distance learning and university status.
• ADvTech*: Long-term holding with solid but not as aggressive growth. Strong presence in tertiary education and schools. Expansion into East Africa showing promise.
• Curro: Disappointing results with flat learner numbers and write-downs on buildings. Struggles may be due to internal issues or broader economic pressures on lower-income consumers.

• Copper: Near all-time highs due to demand from EVs, data centers, and energy transition. Companies like BHP*, Anglo, and Rio ramping up production. Simon is playing the copper trade through BHP Group.

Copper | Weekly | 25 March 2025

• Rhodium: Seeing a price recovery after a prolonged downturn. Benefiting PGM miners, though still far from peak levels.
• Platinum & Palladium: Relatively stable within established price ranges.

• BYD claims a five-minute charge for 400 km range, setting a new benchmark for EVs.
• Outpacing Tesla and other competitors in rapid-charging efficiency.
• Dominating the affordable EV space with sub-$10,000 models.
• Tesla’s Market Share Decline in Europe
• Tesla’s share of the European BEV market dropped from 21% to 9.6%.
• Competitive pricing from BYD and lack of Tesla model updates.
• CEO Elon Musk’s political involvement potentially affecting brand perception.

• Reported net asset value (NAV) of R276.89, but share price only R155.
• The discount to NAV is reaching extreme levels.
• Historically, Remgro traded at a much smaller discount, raising questions about potential revaluation.

Simon Brown

* I hold ungeared positions.

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00:00 Market Overview and Education Stocks 06:51 Commodities: Copper and Rhodium Insights 13:34 Electric Vehicle Market Dynamics 18:02 Remgro's Financial Performance and Valuation Insights

• Top 40 Index: Hit an all-time high of 82,378, currently at 81,800. SA markets remain strong despite a US market selloff.

• Top40 | Weekly | 18 March 2025
• Gold: Broke $3,000 for the first time last week, currently around $3,030. Continues to rise amid geopolitical uncertainties.

• Gold | Weekly | 19 March 2025
• Rand: Trading at 18.07, briefly touching 18.0088 earlier. Dollar weakness driving strength, with a target level of 17.80.

• Gold as a Portfolio Hedge:
  • Maintains a 6-7% weighting in portfolio.
  • Recent purchase at $2,865 via GLD ETF in New York.
  • Potential buy zones: $2,800 and $2,850.
• Dollar Index Trends:
  • Initially targeted 104, broke through to 101.
  • Could drive the Rand towards 17.80.

• European tariffs and Ukraine war concerns.
• Trump-Putin meeting adds to geopolitical tensions.
• Elevated US market valuations suggest exploring Europe ETFs.

• AI Participation Note by Standard Bank:
• Tracks the S&P Kensho AI Index.
• Two options:
  • 100% Capital Protection - Minimum investment of R25,000, capital secured, potential upside.
  • Capital at Risk with 140% Participation Rate - Higher returns if index rises, but losses if it drops more than 40%.
• Open for investment until March 28, 2025.

• Finally delivered helium after years of delays.
• Stock surged from R3 to R9.30, but challenges remain.
• Phase 2 expansion and NASDAQ listing pending.
• Retail investors remain cautious due to past delays.

• Atlanta Fed GDP Now Forecast:
• Predicts Q1 GDP contraction of -2.1%.
• Economic slowdown concerns intensifying.

• US Fed (FOMC): Unlikely to cut rates.
• SA Reserve Bank (MPC): Potential space for a rate cut.

Simon Brown

* I hold ungeared positions.

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00:00 Market Overview and Key Movements 05:47 Gold and Rand Dynamics 12:08 Investment Opportunities in AI 17:43 Renigen's Helium Production and Challenges 20:06 Budget Insights and Economic Outlook