Jsedirect With Simon Brown

Simon Shares 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) upd

Simon Shares 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 We Get Mail 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

Simon Shares 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 Investor or trader? Or both? I got

Simon Shares 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 The market vs. the economy 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 re

Simon Shares 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  Is the fees battle over? 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. No

Simon Shares 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. ETF price wars With the new issue of ETFs from Satrix and Sygnia taking over the DB x-trackers (to be branded Itrax) we're seeing

Simon Shares 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. New listings in hot sectors 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 an

Simon Shares 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   How long is long-term? A recent question asked about

Simon Shares 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. What do you trade? Why? 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

Simon Shares 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 Now for the recession 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. Investi

Simon Shares Famous Brands* (JSE code: FBR) results were decent enough with the UK acquisition only adding a small bit to the bottom line. I have been buying in the low R130's. An article on Moneyweb that strips out the top five expensive and heavy weighted stocks in the Top40 shows a historic PE of around 12.5x. In other words offering value and adding to my bullish thesis.  Spar (JSE code: SPP) results show an operating margin squeeze down from 3% a year ago to 2.5% in these results. In part the offshore acquisitions but not a great sign. Sygnia (JSE code: SYG) results were flat. I expected at least some growth in HEPS but it was spent on new staff (via an acquisition) and marketing. We are still waiting for the details of the rights issue to fund the DB x-trackers purchase. For now I like the company but still think it is expensive. Property ETFs for dividends and the tax on the dividends explained. The JSE Power Hour video on investing while junk. Upcoming events; JSE Power Hour: Ways that management

Unconscious Competence Maslow's theory of how we progress and ultimately become Unconscious Competent traders. Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence 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.

Simon Shares Blitz round of result comments; Richemont* (JSE code: CFR) Calgro M3* (JSE code: CGR) Lonmin (JSE code: LON) Astral (JSE code: ARL) Vodacom (JSE code: VOD) Balwin (JSE code: BWN) * I hold ungeared positions. Upcoming events; CoreShares investment disciplines & transactional website JSE Power Hour: Investing while junk JSE Power Hour: Ways that management can mislead investors CoreShares transactional website and some investing core principles We're running a promo with CoreShares this month including an event in Durban next Wednesday 24 May at the Riverside hotel (email info@coreshares.co.za for info or to book). This week Simon chats to Gareth Stobie about their new website that enables transacting in their ETFs and their three investment disciplines when saving for or already in retirement. 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 J

Simon Shares Shoprite* (JSE code: SHP) announced that former CEO Basson would be exercising a put option to company forcing it to buy back some R1.8billion of Shoprite shares. No problem, except did we know about this put structure? They say it was part of his December 2003 employment contract, but the annual reports of 2003/4/5 make no mention of it? Adcorp (JSE code: ADR), horror update. They are really struggling. Metrofile* (JSE code: MFL). Everybody wants to know if I am selling, why would I be selling? Just because the price is down? Rational Intuitive, what type of investor are you?  * I hold ungeared positions. Upcoming events; JSE Power Hour: Investing while junk JSE Power Hour: Ways that management can mislead investors How to trust your trading system Time and discipline is the best way to trust. My lazy system is now some 12 years old, so I know to trust it. But how do you get to trust a new system? I like the approach suggested by Mark Douglas in his book, Trading in the Zone. Back test (ey

Simon Shares You know Apple results were truly average when even the fan boys say it was just okay. But that pile of cash, over a quarter trillion US$! MTN update looks decent for South Africa and Nigeria. Still tough in both but at least revenue is improving. Locally April vehicle sales and PMI data both fell off a cliff. But with Easter in March last year we're not comparing apples with apples, so May will give us a clearer picture. Upcoming events; JSE Power Hour: Investing while junk JSE Power Hour: Ways that management can mislead investors How much cash do we need to start? Trading or investing requires capital. As an investor one can start very small with just a couple hundred rand, but a trader requires a lot more in order to properly manage risk. So we look at the different options (CFDs, FX, ALSI and ALMI) and how much is required to start. We Get Mail Jing-Woei In a recent Finweek (30th March) magazine issue, I read about your view on the NFEMOM fund. I was wondering if you have also had a

Simon Shares Purple (JSE code: PPE) who own Easy Equities had a very rough set results and as they comment in the commentary they need a capital injection. What does tihs mean for the business and clients? @csavagegt247 @Richards_Karin @Caro1Graham @gary_dyk @EasyEquities Some more comforting news regarding EE's nominee First World Trader Nominees (FTW). Taken from their T&C's. pic.twitter.com/oXSELq2QDZ — Johann Biermann (@JohannBiermann1) April 25, 2017 Listed property or buy-to-let Power Hour was great, packed wth tons of details and the spreadsheet so you can crunch your own numbers. Kering results showed very strong growth for their luxury brands in Asia Pacific and this has spurred Richemont* (JSE code: CFR) higher. Details; Gucci +48% vs consensus +21%, Bottega Veneta +2% vs consensus -4%, Saint Laurent +33% vs consensus +19%. Steinhoff (JSE code: SNH) is loving the French election first round results. Upcoming events JSE Power Hour: Investing while junk * I hold ungeared positions. Tradi

Simon Shares UK snap election for 8 June and French first round presidential elections this Sunday. Pick n Pay (JSE code: PIK) results looking decent but stock remains expensive. Combined Motor Holdings (JSE code: CMH), amazing results in a tough space. Top management and solid balance sheet. World Bank cuts our 2017 growth target from their original 1.1% to 0.6%, after cabinet reshuffle and subsequent downgrades. How we hurt our trading Message from a trading friend; "I think the true art of trading is learning to be completely satisfied with your own objectives. Rather than constantly worrying about what could have been if ..." Trading is simple. Buy when the chart says buy, sell when it says sell and sit on your hands in-between. But we over think it, we believe in complexity and this hurts us. I did not go short over the long weekend because, well politicians. I decide that I needed a new rule about 4 day weekends, do not hold over them? In truth I have been trading my ALSI systems all through recent

Simon Shares Our banks are now being downgraded by S&P and Fitch, this is to be expected. Tongaat*, I have been buying and now have full allocation. Still my preferred second tier portfolio pick. Taste selling jewelry and doubling down on international food brands with another rights issue coming. Japan, worth investing in? Upcoming events JSE Power Hour: Listed property instead or buy-to-let * I hold ungeared positions. Capitec* - should we worry? Lots of concern abut rising bad debts and how this will impact Capitec. They identify three risks; market, credit & business. Rescheduling is a risk that concerns many but Capitec defends it in being better business and they have over 200% provisions on arrears and they are well ahead of Basel 3 2019 requirements. Further when they reschedule a loan they increase provisions against non payment. They have been declining more loans and have been tightening credit granting criteria since April 2015 and now 92% of the value of a loan is provided for when

Down we go Standard and Poors downgraded our offshore foreign debt, not ZAR debt. This is about 10% of total SA debt. Technically we're not junk as that requires two agencies to rate us junk. But all said this is bad and expected and our portfolios should have been ready and waiting. It took countries like Uruguay, Croatia, Ireland etc. on average 7 years to regain their investment grade status after falling to junk! Columbia took 12 years and over the last 19 years, S&P has downgraded 23 countries to junk status, of those only 6 recovered, shortest recovery time was 5 years. How does it hurt? Debt costs for the country go up, so higher taxes and less government spending. Interest rates higher and rand weaker putting pressure on the middle class. Poor will be hurt with real damage is done to the middle class. 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 Lim

Simon Shares Capitec* (JSE code: CPI) through results got everybody talking about the "arrears coverage ratio" dropping to 208% vs. 223% previously and vs. 196% in 2015. This got all the attention last time as well, I not concerned and my 'aggressive' buy price is now around R719. I have some USD expenses due in the next week or so and have taken a hedge using NEWUSD* just in case. Anchor Capital results showed a serious slowing of growth but still a stock with a great looking future and at around 600c very attractive. I have bene trying to add to my very very small Sea Harvest* holding but I don't want to chase the stock as I think we may see some weakness in the weeks ahead. 1275c would be my ideal entry. It traded 1270c last week, but I wasn't paying attention and missed them. UK has triggered Brexit and now Scotland wants out of the UK. A really excellent post by Kristia on bond ETFs. Upcoming events JSE Power Hour: Listed property instead or buy-to-let * I hold ungeared positions. Protecting yourse