During June, the bipartisan infrastructure negotiations in the United States (US) continued. A $1.2 trillion plan initially emerged from the two parties, which set out additional infrastructure spending close to $600 billion.
Read full articleThe global economy is heading towards an evermore uncertain place. Late in 2021, markets anticipated that central banks around the world would start to increase interest rates, and they subsequently did. Now, almost 18 months later, economies are giving mixed signals. Inflation is coming down in key regions, like North America and Europe, but not enough. Some economies, like India, are showing signs of life but others, like China, are really struggling.
Read full articleSince the arrival of the internet, talks about the “information age” and its many benefits have taken place continuously. Benefits such as cheap, or even free, access to large volumes of information. But the discussion rarely progresses to the potential negative impacts that might arise from too much information. We believe that the benefits of access to information are real, clear, and well-documented, however, as with anything in life, too much of a good thing is generally bad.
Read full articleThe strong June jobs report in the United States (US) is likely to leave the Federal Reserve (Fed) on course to raise interest rates to a 22-year high during their next meeting to cool off the economy and to combat inflation. Employers in the US added 209 000 jobs in June, causing the unemployment rate to fall from 3.7% in May to 3.6% in June. This is ever closer to the 53-year low of 3.4%. June’s increase was the smallest since December 2020 and is one of the indicators pointing towards a slowdown in the world’s largest economy.
Read full articleThe active versus passive investment strategies debate has been raging for many years, with both sides trying to make the case for their own strategy at the expense of the other. Without pre-empting our own beliefs on this matter, we will start with the words of John C Maxwell: “A great idea is simply the combination of many good ideas”.
Read full articleOver the past two decades, we have arguably witnessed the greatest era in men’s tennis. We saw a constant tug-of-war between Roger Federer, Rafael Nadal, and Novak Djokovic. Federer, who originally held the most Grand Slam titles, was overtaken by Nadal, who was recently dethroned by Djokovic. It now seems likely that Djokovic will be crowned the Greatest of All Time. Well, at least until the next tennis star comes along.
Read full articleAt their latest Monetary Policy Committee meeting, the United States (US) Federal Reserve (Fed) decided to leave interest rates unchanged at 5% to 5.25%, following 10 consecutive hikes over a 15-month period. But the Fed remains unwavering in its commitment to bringing inflation down to its 2% target. Jerome Powell, the Chairman of the Fed, therefore, made the comment that more hikes may be needed later this year.
Read full articleAs human beings, we always want to be in control of our circumstances. It is, therefore, normal to feel powerless when things outside of our control direct our circumstances. More recently, for some of us who wish to externalise funds, that driving force has been the weakening rand.
Read full articleTo understand why South Africa (SA) will not become a failed state, it is important to understand how we differ from states that have failed. States like Yemen, Somalia, and Syria. According to research conducted by Fund for Peace, countries that we often ascribe failure to, like Zimbabwe and Venezuela, are not extreme cases of failed states. But before we address the question of SA’s failure, it might be worthwhile to distinguish between a state and a government.
Read full articleOver the last couple of years, we were often asked by both local and global investors if South Africa will become the next Zimbabwe or Venezuela. Today, this question seems more relevant than ever but, still, the answer remains an unequivocal no. As bad as things have become, there are five specific forces that work together, like reinforced concrete, to keep us from falling into the abyss. These forces are:
Read full articleA favourite pastime of ours is wandering the weekends away at our local market, where we venture from one booth to the next hoping to find a hidden treasure or a bargain that simply cannot be ignored. As portfolio managers, we are in the privileged position to do the same during our weekdays, except that we spend considerably more time at each company’s booth speaking to the right parties and weighing up all the intricacies before making a decision.
Read full articleWarren Buffett once said that a prudent investor should “be fearful when others are greedy, and greedy when others are fearful”. This sounds rather easy, but it is much more difficult to apply in practice because of the nature of uncertainty. Even though historic analysis gives us a fairly good indication of the potential outcomes, we, as humans, often complicate decision making by adding too many what-ifs.
Read full articleIn 2007, on the eve of the global financial crisis (GFC), Hilton Worldwide announced that it was being bought by the private equity (PE) behemoth Blackstone. After the acquisition, Hilton’s fortunes changed abruptly under its new owner. Almost overnight, Blackstone managed to double the amount of Hilton rooms while tripling its own return on investment. Hilton Worldwide is only one of many PE success stories.
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