WorldWide Markets with Simon Brown

The Year So Far 📈

• Market returns in 2025 tell a story of extreme volatility rather than predictable trends.

• The US 10-year yield spiked above 4.5%, shaking confidence before Trump walked back tariffs.

Trump's Second Term 🏛️

• Tariffs on Mexico, Canada, China, and NATO tensions triggered waves of uncertainty.

• A 90-day tariff pause ends soon—more volatility ahead.

Currency Moves 💱

• The rand hit R19.90/$ in April but has strengthened nearly 7% year to date.

• Dollar weakness is driving big shifts—its worst start to a year in 50 years!

Commodities on Fire 🔥

• Platinum: +52%, hitting 10-year highs

• Gold: +27%, buoyed by central banks diversifying away from dollars

• Copper, rhodium, uranium also strong, while coal and Brent oil are lagging

Equities: Winners & Losers 📊 Top Performers:

• Sibanye Stillwater* +115% 🚀

• Northam, Impala, Harmony riding the PGM boom

• Surprise: MTN +58%, defying telco sceptics

• British American Tobacco at record rand highs

Strugglers:

• Aspen -27% 🩺

• Spar, Mr Price* correcting after big runs

• Sasol, despite the headlines, down just 5%

Global Markets Snapshot 🌐

• European indices are up double digits (Germany +20%, Spain +21%)

• Canada bounced +8.5% from April lows

• Hong Kong +20% as Asia joins the rally

• SA market in ZAR: +30% YTD, outpacing gold and the Nasdaq

Key Lessons 🎓

• Volatility is a feature, not a bug.

• When markets "go on sale," don't panic—buy like you would discounted chuckles.

• Politicians worldwide are unpredictable—stay focused on your long-term plan.

The Dollar Story 💵

• Dollar Index fell from 110 to 96 in six months.

• Capital is rotating to Europe and emerging markets.

• The tariff-driven isolationism in the US is reshaping global flows.

🗓️ Upcoming Event

Power Hour – 21 July (Monday) Topic: Three Decades of Investment & Trading Lessons with Simon Brown 🔗 Register at JustOneLap.com/events

📈 More Resources

• Full ETF performance update dropping Thursday: justonelap.com/ETFs

• Read Simon's market insights anytime on JustOneLap

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order

💸 Know Your Fees: Effective Annual Cost (EAC)

• Not all fees are created equal — EAC is the real number to watch.

• Applies to retirement products, LISPs, and unit trusts — not to stockbrokers.

• 📊 Understand the difference:

  • TER (Total Expense Ratio)

  • TIC (Total Investment Cost)

  • EAC (includes platform + advisor + product fees)

• 🍏🍏 Apples-to-apples: Compare funds using EAC.

• 🎯 Target an EAC between 1.1%–1.5%.

• 💬 Negotiate! Advisor and platform fees are often flexible.

• 🔍 Beware: Some brokers refuse to give the number — that's a red flag.

• ❗ Platform fees: Flat > Percentage. Otherwise, your 1% could become R100,000 in fees!

🛢️ Oil Wipeout & Geopolitics

• Weekend U.S. strike on Iranian nuclear sites 🔥 led to… a shrug from the oil market.

• 📈 Oil hit $81.40 early Monday, then crashed to $67.70 by Wednesday.

• That's a $14 drop, nearly 20% down — massive.

• 🌍 Global market awash with oil:

  • 🇻🇪 Venezuela, 🇮🇷 Iran, 🇷🇺 Russia all pumping through sanctions

  • ⛽ OPEC+ supply increases kicking in soon

• ⛴️ Straits of Hormuz risk overstated — markets unconvinced

• 📉 Oil heading to $60? Possibly.

⚙️ Sasol: Much Ouch

• ❌ Not a fan of Sasol — never been on that bus

• 📉 Sasol collapsed this week: down 14–15% Tuesday

• Currently hovering at R96, with support around R77

• 🧪 Chemicals weak, oil down, Rand strong = triple whammy

• ⚠️ Not going bust, but it's in real pain

💱 Rand Rollercoaster

• 💵 USD/ZAR down from 18.15 to 17.76

• 🔻 Dollar weakness a key driver

• 🎯 R17 still very much in play

• 😬 Strong Rand not helping exporters like Sassol

🏦 Fed Watch: FOMC & Powell

• 🕊️ No rate change last week, as expected

• 📣 Powell grilled by Congress — MAGA heat incoming

• 📉 Fed still guiding for two cuts in 2025

• Data outlook softening:

  • 🏭 GDP ↓

  • 📈 Inflation ↑

  • 👷 Unemployment ↑

• 🧠 Powell's just doing his job — not playing politics

• SA's MPC, on the other hand… maybe a bit behind the curve

⚗️ PGMs: Shiny Again?

• 💬 Chat with Old Mutual: rotating out of gold, into PGMs

• 🔼 Platinum at 10-year highs, last seen in Oct 2014

• 🇿🇼 🇿🇦 Platinum from Southern Africa; 🇨🇦 🇷🇺 Palladium elsewhere

• 📦 Stockpiles, especially palladium, still working through

• 🚗 EVs: Now only expected to be 40% of sales by 2035

  • Existential crisis for PGMs? Delayed… for now

• 🧊 Recycling paused — not worth it at these prices

• 🥇 Pick your poison: Impala, Northam, Sibanye Stillwater*…

  • 📦 Sibanye with PGMs, palladium & gold exposure

🪙 Gold: Still Glowing

• 🧲 Pullback to support around R3,330/g

• Could go as low as R3,200 — but not rolling over

• 💡 Structural shift in how investors (especially in developed markets) view gold

• 🛡️ Post-2022 shift: Central banks hedging against future sanctions with more gold

Simon Brown

* I hold ungeared positions.

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This week, Simon Brown unpacks the numbers behind a recovering South African consumer, an attractive new renewable energy listing, and the latest moves in platinum group metals (PGMs). Plus, CrowdStrike's results, Omnia's cash pile (and SARS headache), and what falling bond yields mean for SA.

In this episode:

• 📈 Retail recovery? Results from Mr Price* and TFG* show H2 improvement — are SA consumers finally catching a break?

• 🌱 Greencoat Renewables (JSE: GRP) lands on the JSE with a juicy ±9% dividend yield. Should you be bidding?

• 💰 Omnia shines with strong mining & agri numbers, plus another special dividend — but SARS looms.

• 🪙 PGMs on the move: Platinum breaks out, rhodium recovers — which miner is best placed to benefit?

• 🔐 CrowdStrike* delivers solid results, but share dilution raises eyebrows. Is it still a long-term cybersecurity winner?

• 💸 Currency & bonds: Rand firms as US dollar weakens and SA bond yields drop. What does it mean for investors?

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order

Simon has been doing a key note address over the last week and in this weeks podcast he takes a slightly different tack to what he usually presents. This time he is delivery his key note.

He looks back over almost forty years of market crises that he's invested through.

He shares the lessons he learnt, what caused the crisis and what the response was.

This includes; 1987, EM Tigers of 1998, the DotCom bust in 2000, Global Financial Crisis of 2008/9, the 2020 pandemic and finally the 2025 Trump tariff crisis.

• SARB inflation target 🎯 Inflation remains well below target at 2.8%, raising expectations of a rate cut at Thursday's MPC meeting. New long-term target could shift to 3%. ⏳ Rate cut coming? Market's betting on 25bps; Simon wants 50bps. 💡 Lower target = anchored expectations = tamer wage negotiations.

• Peloton (PTON) 🚴‍♂️ The pandemic darling may be turning a corner with solid free cash flow returning. 💵 Q3 FY25: $94.6m FCF (vs $10.7m in Q1) 📉 Stock at $7.50 (down from $170). Risky turnaround, but improving numbers. 📊 Subscriptions reviving; de-risked but needs deeper digging.

• Gold Power Hour coming 19 June 🪙 Event: "Know when to hold it, know when to fold it." 📆 19 June with Standard Bank 📈 Gold had its highest ever weekly close – bullish candles and all.

• Rand strength 💪🇿🇦 ZAR gaining momentum: from 19.90 to 17.88. 🌍 Dollar index weakening, Trump tariff noise not shaking markets – yet. 🔮 Simon sees 16.80 as possible ahead.

• USDZAR 27 May 2025 | weekly chart

  Trump tariffs whiplash 🇺🇸🌀 🗓 Flip-flops on 50% EU tariffs: delay to June? Or back to July 9? 🎭 Oval Office ambush with Ramaphosa. No real surprises. 📉 Market's still waiting for an actual deal – not just handshakes.

• Renegen* (REN) & ASP Isotopes (ASPI) 🧪 🚨 Renegen deal: 1 share of ASP gets ~0.09 of REN. 🛑 Simon holding Renegen for Phase 2 helium – not keen on ASP. 💰 Nasdaq listing delays = funding delays.

• Sasol (SOL) ⚖️ 💸 Transnet drops appeal, SOL gets R4bn court award. 📈 Stock rally confirmed – chart looking better, Brent still a drag. 🛢 Oil remains the key driver.

• Pick n Pay (PIK) 🛒 📉 Still losing money, but less than before. 👷 Sean Summers' contract extended to 2028. Break-even delayed. 💰 Boxer + R4bn cash > market cap = value if turnaround succeeds. 🚧 Market says: "We don't believe it. Yet."

• Nampak (NPK) 📦 ✅ Another slow but steady turnaround. 📊 Results not amazing but consumer headwinds easing.

• Altron (AEL) 🚗📡 📈 Strong Netstar performance. Solid accounting tailwinds coming. 💬 Simon: "One of the few real turnaround wins." 🧠 Potential still there – analyst upbeat.

• Harmony (HAR) + Copper 🇦🇺🔧 💰 Buying Aussie copper mine for $1bn – diversifying away from gold. ⚖️ Adds immediate copper cash flow = de-risked future. 🔌 Copper demand = chips, EVs, energy. Chart still flat for now.

• PGMs: Platinum & Palladium 💿 🔁 Trading in long-term ranges (R830–R1100). 📉 Not breaking out yet; charts uninspiring. 📦 Stockpiles still working through post-Russia invasion. 📉 EV transition and reduced supply in focus.

Simon Brown

* I hold ungeared positions.

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🎯 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 vs. Big Pharma

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 Group: Surprise Trading Update

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. 📈

🛒 Boxer's Debut Results

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. 🏪

🏅 AngloGold Ashanti*: Cash Flow Soars

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. 🪙

🏘️ Calgro M3 vs. Balwin

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.

All charts by KoyFin | Get 10% off your order

🧓 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

🏦 Investing Lessons from Buffett

• 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

🌸 "Sell in May and Go Away" – Myth Busted

• 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

🛢️ Oil Falling as OPEC Hikes Production

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

Impacts:

• ✅ 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

💵 Rand Strengthens

• 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 Surging Again

• 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

🏛️ FOMC Decision This Week

• 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%)

🧠 Palantir Results – Big Numbers, Big Risks

• 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.

All charts by KoyFin | Get 10% off your order

🎙 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.

All charts by KoyFin | Get 10% off your order