• Curro (JSE code: COH) were mixed but mostly good. The lower priced schools struggled and the tertiary are still getting off the ground and will be unbundled in September. But for a stock on a PE of some 100x HEPS growth of just 22% is way to low.
• Anchor Group (JSE code: ACG) results were as expected from their trading update - a massive disappointment. Last March I was expecting HEPS of 100c for this financial year and they just did 22c (down 39%) and will be hard pressed to do 50c HEPS for the year. That said, 50c HEPS puts them on a forward PE of around 10x, not bad but frankly Coronation (JSE code: CML) with a dividend yield of some 6.5% looking much more attractive.
• PPC (JSE code: PPC) woes continue as the share trades at 1999 levels. Yip zero price profit this century if you've been holding the stock. This after a high of 5300c in 2007. So now everybody wants to buy, but there's no rush (if at all). Wait for a doubling of price before considering an entry.
• Famous Brands* (JSE code: FBR) update shows very modest like for like growth but this statement worries me "To date, certain of the new UK stores opened since acquisition have not met sales projections.".
• Up coming events;
  • JSE Power Hour: Getting trading right with Trader Petri
  • The Traders Life: The process with IG and Simon Brown
  • JSE Power Hour: Disruptions or Innovation

* I hold ungeared positions.

I did a Bitcoin (code: BTC) podcast in March and nobody cared . Another in June and interest was still modest. Now it booming and everybody wants in?

• Is it too late? No idea.
• Is it going to crash? No idea.
• How high will it go? No idea.

What is Bitcoin? It is not a currency, it is if anything a commodity. It pays no dividends and can buy things but remember sea shells have been used to buy things in the past.

For those wanting to buy Bitcoin, Magda Wierzycka )CEO of Sygnia) recommends using Luno locally (albeit it internal so only market within SA and hence price not always reflective of other exchange prices). Or use an offshore exchange (using your annual R10million offshore allowance) via Kraken or Xapo.

Here's a trick, there is no central exchange for Bitcoin, so what's the price? Also no regulator and we have seen exchanges crash, be hacked and go bust. So this is fairly wild west out there.

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JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• New all time highs locally for the All Share Index, Indi25, Top40 and ALSI futures as latter traded one contract at 50,000 for first time ever. I love all time highs.
• Upcoming events;
  • JSE Power Hour: Getting trading right with Trader Petri
  • JSE Power Hour: Disruptions or Innovation

• Johan
  • If everyone is making money from trading, who are they making the money off? The answer is of course that everyone can’t be winners and there has to be losers. The ones that lose more than they win, give up and stop trading. Therefore you need a constant flow of newbies that will fail so that the winners can keep winning. Does this not seem like some sort of great pyramid-type scheme? Or is the general justification “survival of the fittest”? Your take on this?
• Wouter
  • One question from a new investor. Would you stick to your current ETFs you have in your tax-free savings account or add new ones as markets change. Regards from China.
• Eric
  • I have R50 000 that I want to passively invest in Satrix for 3-5yrs and I was thinking about taking 7 Satrix products and divide the money equally.
• Tim
  • Could we not just be another Japan, everyone says the market may go up but Japan is the elephant in the room? Or am I mistaken?

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JSE – The JSE is a registered trademark of the JSE Limited.

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• British American Tobacco (JSE code: BTI) is in trouble on two fronts. Firstly the US is looking at requiring nicotine be reduce to non-addictive levels. Then the UK is investigating the company bribing African governments to get favourable smoking legislation. I suspect many had though the legal issues for these companies were behind them.
• Bank results are showing surprisingly low dab debt levels. Barclays Africa (JSE code: BGA) at 0.96% and Nedbank (JSE code: NED) at 0.47%. Good news, but cost-to-income levels remain high with Nedbank blowing it out at 59.3% and Barclays 56.4%. These high cost bases are a problem and are not coming down.
• MTN (JSE code: MTN) update was bleak. It finally gave us real numbers and shows it is down by about two thirds compared to 2015, which is pre-Nigeria.
• Local markets toying with all-time highs but unable to break higher.
• Understanding ETF TER ratios.
• Upcoming events;
  • JSE Power Hour: Getting trading right with Trader Petri

I got an email about how a long-term investor had a 15% trailing stop loss on their share and asked it this was the right stop loss level. The question was moot as the writer seems confused as to whether they were a trader or an investor.

The easiest measure is how long you plan to hold a position. If less than three years than you are a trader as SARS says holding less than three years is income and hence taxed at your marginal rate. So derivative or not short-term under three years is trading.

But there is another issue which is technical vs. fundamental. Traders generally use charts as price action trumps all else and plays out in the short term regardless of valuations. Long-term investors use fundamentals as they will play out over the long term. So a long-term investor would have a stop loss but it would be fundamental based, not price based.

Lastly, you can be both. Certainly I am both short-term trader and a long-term investor. Importantly use separate accounts, even if with the same broker.

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• PPC (JSE code: PPC) announced departure of CEO and share tanks. This company in serious board room trouble.
• Kumba (JSE code: KIO) results were decent, dividend was wild (ahead of actual HEPS) as they compensated shareholders for missed dividends! This is odd and asks the question about dividends going forward. Concern is average cash break-even price of US$43/tonne was up from US$29/tonne in the previous period.
• Long4Life (JSE code: L4L) runs to 838c then announces confirmed deal for Holdsport (JSE code: HSP) at slightly higher ratio (was 10.44 L4L for every HSP, now 12.1) and share down to 600c. Starts to get interesting another 50c lower.
• Upcoming events
  • Moneyweb Expo – Structure your pay cheque

On Tuesday the Top40 was trading at the high for 2017 (and again on Wednesday) and when I tweeted the fact the replies were mostly about how the market is wrong. Look at unemployment, Guptas, recession, down grades etc. they all shouted. None of the is wrong, but is it relevant?

Firstly we've had a three year +/-30% correction in time. But as importantly the market is not the local economy with listed companies earning a lot beyond our boarders and mostly the better stocks in the index as loser are tossed out. Lastly and perhaps most importantly the market looks head 12-18 months. With rates coming down, Zuma out in the new year and his preferred choice struggling 2018 looks way better for South Africa than many a recent year.

So if we're looking to the seed half of 2018 then the future s brighter, and sure this may be relative, but brighter surely means higher for the market?

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JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• Finally, 5 weeks after moving my FTTH has been installed so I am going to Periscope each recording as it happens which is typically Wednesday afternoon. https://www.pscp.tv/SimonPB/
• Retail trading updates coming in and as expected they are mostly bleak, but we are seeing the impact of the rains mostly returning.
• Netflix is a monster, over 100million customers world wide.
• Long4Life is buying; Holdsport and Sorbet.
• Steinhoff (JSE code: SNH) raises R12bn (Euro800million) in Europe with a 7.5 year bond at 1.875%.
• Upcoming events
  • JSE Power Hour: Recession proof stocks
  • Moneyweb Expo - Structure your pay cheque 

Last week I spoke about the price war in ETFs. But do fees still matter?

For the passive market fees are surely at point where they almost don't matter. Sure they can go lower but we're talking most local ETFs now nicely below a 0.5% TER ratio while the offshore are slightly above 0.5%. Don't get me wrong, every 0.1% makes a difference, but on R100k that's R100. Not nothing but not the difference between retiring or not.

I still look at VOO with a TER of 0.04%, but we're never going to get that low (they're a mutual company and owned by the fund holders and have massive scale we'll never see in South Africa).

Admin fees, once a silent killer have also disappeared at some brokers where a simple ETF or tax-free account has zero admin fees.

Transaction fees are still a bug bear at some places with minimums that mean you need to trade some R18k-R30k per hit to get the effective rate.

• Georges
  • I would like to find out how/when do ETFs collect their TER? Is this set off against distributions quarterly or “baked” into the price?
• Helen
  • What will happen to my preference shares with Basil III? Will I loose them?

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• Finally, 5 weeks after moving my FTTH has been installed so I am going to Periscope each recording as it happens which is typically Wednesday afternoon. 
• Calgro M3* (JSE code: CGR) update on their missing SENS. Feeling is that the impact is marginal and will hardly hurt earnings? Time will tell, I still don't like asymmetrical information.
• Oakbay (JSE code: ORL) is delisting from the JSE as they can't find a sponsor. No surprises but real bad for any shareholders.
• Sygnia (JSE code: SYG) announced the details of the rights offer and it is at 900c but only for R160million as apposed to the expected R320million. So much less dilution, albeit also much lower price.
• Pubic Protector not fighting the SARB objection of her attempt to change its mandate.
• New emerging market ETF from Satrix
• Upcoming events
  • JSE Power Hour: Recession proof stocks

* I hold ungeared positions.

With the new issue of ETFs from Satrix and Sygnia taking over the DB x-trackers (to be branded Itrax) we're seeing some price wars forming. Very good news for consumers, but some buts.

• Read the small print.
• Don't rush. Much of this is targeted TERs and the incumbents may also adjust their TERs downwards.
• Switching into a same but cheaper ETF may not be economical
• Tax, costs and spread adds up.

My strategy will be where I buy an ETF that now has a cheaper alternative I will start buying the cheaper immediately. Switching will take longer.

• Everybody is asking
  • Are you buying the new emerging market ETF from Satrix?

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• New Satrix ETFs; S&P500, MSCI World Index and MSCI Emerging Markets Investable Markets and at low 'target' TERs. A price war in the local ETF offerings?
• Wednesday was exactly ten years since the UK had an interest rate increase from the BoE?
• Calgro M3* (JSE code: CGR) issued a press release stating that they're cutting back on 'wet work' in the Western Cape due to drought. But no SENS?
• ANC policy conference has proposed that the SA Reserve Bank be nationalised. Aside from my (so far failed) attempt to buy shares in it, so what? Shareholders have no say in the running of the bank and almost every other central bank is state owned.
• What percentage ETFs in a portfolio?
• Upcoming events
  • JSE Power Hour: Recession proof stocks

* I hold ungeared positions.

We've seen two small stock listing recently that were trying to attach themselves onto the hype of a hot sector. Gold Brands in the quick service restaurant (QSR) space and Pembury in education. Both have failed and both teach us an important lesson in the new stars that are worth investing in.

It is about quality, it always is. Sure a raging bull market will lift all stocks as we saw way back in 2005-8 listing boom. But in a more subdued market, a more skeptical market, quality matters. Cash matters, brands matter, management matters. It all really matters. It is not enough to just be in the right space.

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JSE – The JSE is a registered trademark of the JSE Limited.

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• Taste (JSE code: TAS) couldn't get the public to take up all of the 120million new shares, but a new shareholder of note did and it good news for the company.
• Naspers (JSE code: NPN) results talk of core HEPS. Now sure they tell us what 'core' means but as always I very skeptical of anything that is not IFRS.
• Wescoal (JSE code: WSL) results in part really hit it out the park with production up 82% while IFRS HEPS was 11.3c vs. 27.1c (company HEPS excluding BEE deal costs).
• Lafferty Group’s 2017 Global Bank Quality Benchmarking study is out, it ranks 100 major quoted banks across 32 countries and Capitec* (JSE code: CPI) comes out tops as the only bank to get five stars.
• Upcoming eents
  • JSE Power Hour: Recession proof stocks

* I hold ungeared positions.

The problem with buy and hold is not the math, which proves it works. The problem is with the evidence, which proves investors can't do it.

— Bob Brinker (@BobBrinker) June 27, 2017

A recent question asked about some investing ideas and concluded with the comment that "I'm looking at long-term say 5 years.". Wow. For me five years is short term while long-term is decades (yes with a 's' at the end).

I am not falling into the trap of saying things are faster these days with always on smart phones with taxis at our beck an call and online derivative trading. But the tweet below highlights that while we know long-term buy and hold works excellently, especially with ETFs, the average investor finds it hard. Stats continually show that average holding periods for stocks has been rapidly reducing. On the NYSE it is now months whereas it used to be years and years.

I'm not sure if it's fear, impatience, indecision or just a greed to be rich quickly. But wealth creation takes time and sure it is no fun when over the last three years most local portfolios have returned nothing, only beating money under the bed.

What I do know is that thinking of a few years as long-term is bad.

• Dale
  • I understand the logic behind an equally weighted ETF, and why it *should* be a good thing, but I can’t help wonder if it’s not a case of “in theory, but not in practise". If I compare the performance of the CSEW40 to the plain Satrix 40, without exception over an almost 10 years period, the Satrix 40 outperforms the equally weighted 40 – sometimes really significantly (thanks etfSA for the data).

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• Woolies* (JSE code: WHL) share price is under pressure hitting 12 month lows on Monday. Recession is hurting them as high LSM consumers shop down and even Australia is struggling economically. The winner here will be Shoprite* (JSE code: SHP) as they cater for mid/low LSM consumers and will pick up Woolies shoppers.
• Index changes effective Monday 19th. Only changes from the main four indices is Capitec* (JSE code: CPI) into the Top40 and Implats (JSE code: IMP) exits.

* I hold ungeared positions.

When I ask people this question I generally get a surprised look as if it is a stupid question and the answer is generally CFDs. The follow up question is always - why do you trade them? Here the answers get garbled because there is seldom a good reason.

We need to be strategic about what we trade. There are differences between; shares, indices and FX. Different funding, risks, costs, spreads and more. We need to understand what they are and trade those that best suits trading in general and our trading specifically.

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

• Finally moving so at the pointy end of going small. Move date is next Wednesday which is also my recording day, so frankly not sure what the plan is re JSE Direct for next week. Will try make a plan, maybe a rebroadcast.
• PPC (JSE code: PPC), HEPS down 93% at 7c but this is all about the rest of Africa and a possible merger with AfriSam.
• Steinhoff (JSE code: SNH) results not bad, but so many moving parts it's hard to keep up.
• Bond and pref share ETFs for income.
• Upcoming events;
  • JSE Power Hour: Ways that management can mislead investors
  • JSE Power Hour: Trading for a living

It was a surprise to most economists but thats moot as the economy and consumer is under severe pressure recession or not. Importantly this was for Q1 2017, so before the shuffle and downgrade. I think this is not going to be short and sharp, it's going to hurt as we have little to counter it.

• Government; cut interest rates, cut tax and increase spending.
• Personal; cut debt and spending.
• Investing; quality offshore bias, be careful of mid & small caps.
• We now really are Brazil.

• Ryno
  • I think Buffett is actually a income investor.

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.