You're listening to Strictly Business Podcast with Lindsay Williams. JSC has closed its doors for another day, so it's time for the five o'clock shadow. And I'm speaking to David Shapiro this week from Sasfin Securities. Viv Govender can't make it today. David, it's the day before, not Thanksgiving, Independence Day. It's funny, this big, beautiful bill, which will go through once the Democrat speaker has stopped speaking. He's been speaking for five hours. as we speak, trying to delay the vote.
But when you look at it, you think that most of the American population doesn't like it. The polls say that. And it's supposed to be good for the midterms, which are in early November next year, 2036. If the package doesn't increase growth and wealth in the United States, then it will backfire on Trump, surely. Oh, yeah. I think there are a lot of things that are up for testing. I'm surprised at the market. The market seems to have just brushed it aside. The market is very firm at the moment.
In fact, firmer than I thought it would be. And it continues even now, you know, with the jobs data coming out. But there are a lot of issues. I'm surprised there hasn't been much of an outcry. And, you know, when you go through it, there's so many questions that are being asked. I read a lot of stuff. I'll read the press. I'll read the Atlantic. In other words, not the Economist or FT, which tend to be very conservative, down-the-road reporting. But here you get criticism.
You get a lot of criticism against Trump, very, very well-written articles. And they don't have much weight. No one really cares. Yes, they moan about how many people are going to... lose their cover because of the Medicaid, reduction in Medicaid, which has been, Trump tried in the first term, this is the Obama, you know, this was his signature legislation. And I think Trump, all that he wanted to do in the second term is get rid of this.
You know, and yet, when you think about it, I don't know enough. But when you look at the numbers, they say that, you know, tens of millions of people are now not going to be covered. or have to take care of their own medical aid. Probably they're working, whatever it is. But there'd be no protests in the street. You know, there's been no tearing down buildings or blowing up pylons or whatever. It just seems to be going through okay.
And the other one that captured my attention was, you know, on his complete attack against renewable. Renewable. Yeah, the support that the government has given. They've given subsidies over there. And obviously, he'll undo anything that Obama did, and he'll undo anything that Biden did as well. He is just so petty and so jealous, particularly when it comes to Obama. And we know why, and we've discussed it before. But it's just that he tears it apart.
And we've got low-income earners and rural hospitals. I mean, for goodness sake. What difference do they make? I mean, they provide a fantastic service, and they're getting a lot of their funding taken away because of the big so-called beautiful bill. And people that earn $290,000 a year are getting an extra $13,000 because of tax cuts. And good luck to them, but it doesn't quite seem fair when the poorest of the poor are not getting Medicaid.
Yeah, I agree with you, and that's why I'm saying, you know, I would have thought that there would have been, because this is the base that got Trump in. You know, it was at the lower income, the blue-collar workers that actually voted for him. So I don't know enough about it, you know, to really put up a big protest. But it does seem to be pointed towards the Democrats. And regarded as, their whole point is no one's going to lose out, you know, to so corrupt.
And, you know, there's a lot of attacks around that. But I'm not in a position to really, you know, debate it. I think a lot of people that funded his campaign for his current term, he said to them, he said, if you give me $20, $30 million, I guarantee I will look after you in my first year. And that is what's happened. He doesn't care. He's just said he keeps his promise with the very, very rich. And... there. It's a promise that he's kept, but the rest of the promises he's broken.
He's got everybody in his cabinet, extremely wealthy men, even Besant. He might not be a billionaire, but he's got a few hundred million dollars. And so on. And I think... Very, very wealthy cabinet. So there's no blue-collar workers there. There's no earthy people. So that's what surprises me. And look, it's not getting through that easily. These are marginal votes. Yes. You know, they won the Senate by Vance had to come in and give a deciding vote as vice president. It was 50-50.
So there are people within the Republican Party who are protesting. And it's simply because they're reflecting the people in their constituency. So it's, you know, it's, that's how American politics works. Well, if we win by one vote, I suppose it's like taking penalties in a football game. You know, it's one penalty decides the shootout. So, but this is a lot more far-reaching. Anyway, but the market's just gathering, you know, keep going on.
Also, some of the economic data helping them, as we see with jobs now, more jobs were created than people thought, no matter where they are, you know, whether it's in the hospitality, whether it's government. But the sentiment indicators, you know, it soothes sentiment. And we're at another all-time high on the S&P. NASDAQ keeps going higher as well, driven by AI, which I think is just going on a course of its own. That's a positive statement, you know, saying, OK, whatever happens.
In politics, whoever bombs whoever, it doesn't matter. We are just kind of grinding. Just the one point I meant to put out. I just noted it here. If we look at the S&P today, you know, talking about renewables and talking about the problems, it's funny that the three energy companies that I'm watching, four, Vistress, Quanta, GE, Vinnova, and NextEra, and all of those are up pretty well today. They're up strongly, over 3%, 3%, 4%. I don't know how you can come out. They're power companies.
They provide electricity. You know, all the issues around almost like a utility. But a lot of them are geared up to the grid. So they're taking off, you know, and doing well. I think a lot of it is driven by the need for power for the data center. So I... Those are the ones I thought might take a bit of a knock. They might come down on the bull, but maybe called that wrong, seem to be taking momentum. So, Lindsay, we've got to go through the bull again and say, okay, what happened?
Are there any concessions for power companies, for renewables? Because I think in all of them there is an element of renewables. Yeah, it's interesting. We'll find out, not overnight, because the markets have really discounted that fact. The fact that perhaps it's a growth-friendly bill, but also they're looking at Powell, and Powell has indicated that maybe there's going to be an interest rate cut, and that's already in the market as well, I think, David. Yes, too.
In fact, what happened today is that they discounted July. Because of the stronger employment numbers, there was a hint. that there might be... What were the employment numbers? Of course, they've been brought forward because tomorrow is Friday and that's a public holiday. What were they? 147,000. And I think the view was 106,000, you know, thereabouts. So it's a good number. And it's low-level jobs. You know, it's... Burger flippers, yeah.
Remember this was in the holiday season where people are looking for waiters and they were looking for people to serve in the... Park cars and things like that. Normally students do it, but the students are going home. But still, you know, whoever is there earns money, and it shows you that the job market is steady. And, you know, so that's taken away the possibility of a July rate reduction. So September is now 75%. As you say, that's baked in.
And there could be one, what's it, October, November. hmm okay yeah but the market yeah yeah all right well it's vulnerable to any bad news but at the moment it's just getting good news i did read something and this this is more ideological than it is economic i read something it was on linkedin and how stupid i didn't save it was excellently written it was five points about democracy and how democracy is being denuded in the united states of america and the fifth point was that
when you start to When there's the cult of the leader and you vote for the leader rather than the party and the people, then you've got a problem. And they're making the point that that's exactly what people are doing. They're voting for people that matter. The lawmakers are voting for Trump because they're scared of Trump and they're voting for the cult of Trump and not for the greater population, which is why the big beautiful bill has gone through.
There were five Republicans that weren't going to vote for it. And the Speaker of the House and Trump got on the phone to them this morning, their time, and said, now look here, this is what's happening. This is what's going to happen to you if you don't, etc. And of course, it'll go through. So it's very interesting, David. I don't know if they're making too much of it, but democracy not being the same as it was when the founding fathers wrote it all down. No. Nowhere near there.
I must tell you something. I'm reading about Washington at the moment, and it was by chance. I didn't even consider that. It's 250 years since the formation of the U.S. Army. That was the first battles against the British. And in 1776 was the Declaration of Independence. So it's 250 years next year. But it was just something popped up because when I was in Boston, saw monuments there and started to read.
And he was a remarkable man, had no interest in his own popularity or wanting to run the country. He did his duty. And when it was done, he was done. And I don't think there's been a president subsequent to that. Look, there was a lot of infighting from Madison and from Jefferson and Adams, John Adams and so on, you know, even around those days.
But I think the quality of men, they genuinely... want, you know, they were genuinely for the people and listened to the people and did everything for the people, which is in the Constitution, I think, or certainly in the Declaration of Independence. And I think it's changed so dramatically since then. You know what? It has to change, I suppose, you know, 250, when was it, 1776? A long time ago, 250 years or so. But the destruction of the basic principles is what the Trump.
The Trump agenda seems to be worshipping the dictator, which is what he is. Yeah, well, it is like that. And I always had respect for America in the sense that you would get bipartisan votes that people would meet and would really reflect the wishes or the feelings of the entire population. It's not like that anymore. And it's changed dramatically. I don't know whether it's the demographics that have changed. that are causing it. But I'm saying that when I go there, I feel two sides.
In other words, this is Liverpool versus Man United kind of thing. Two hostile teams facing each other and hostile fans wanting to beat each other up. That kind of story. There's nowhere in the middle. No one meets or no one sits around the table. even if you're a supporter. You don't sit around the table and discuss things in a partisan way. You know, you might, and that's what I find. So, you know, when you go to a dinner party, boy, you've got the people on the left and people on the right.
I never go to dinner parties. It's not the main reason I don't go to dinner parties. The main reason is I don't get invited to dinner parties, but that's another story. I'm talking pathetically. I know. That's how people feel about it, you know. And if you know someone's a Trumpian or something like that, you just shut your mouth. Because you're not going to make any headway. You just carry on and talk. I find it very difficult to do that. But anyway, David, let's have a look at the markets now.
The dollar round is very steady indeed. 1751. The British pound against the round 2390. Euro round 2059. Eurodollar is 1.1760, which is a euro that's fallen a third of a percent. British pound, 1.3650. The gold price, it's down $20 an ounce to 33.27. The platinum price, 13.77, which is down 21 or 1.5%. And palladium has also fallen by 1.3% to 11.48. Other commodities, oil price, I can't make up my mind about the oil price. I must admit, the market's made up its mind today, doesn't like it.
Down three quarters of a percent to $68.60. That's for Brent crude. And West Texas, $66.66. Ooh, dangerous. 1.2% weaker. And other commodities pretty much gyrating ahead of the long weekend. The South African 10-year bond doing so nicely. Look at that, 10 basis points better. 973. U.S. 10-year, 4.33%, which is up 4%.
basis points and S&P 500 futures doing so well on their highs up 51 points the yeah September futures 6,326 or 0.8 percent higher David these are massive numbers and tell me what's happening to tech please AI tech AI shares are very strong so maybe if you go through the market now and I'll just give you some numbers. NVIDIA keeps going, making new highs. Well done. up 1.25%, 159, it did touch 160. Microsoft strong, up 1.6%. Apple up 1%. We haven't seen that.
But right across the board, very strong, very strong semiconductors. There was also talk that, you know, between America and China, they're easing. restrictions there, but, you know, and allowing, I'm trying to think of the right wording that they had just to get it right. Ease restrictions on critical tech, license requirements for chip design, in other words, easing those issues. So we have seen, we saw Samsung up quite a lot.
We've seen all the chip stocks here, Taiwan semiconductors, Broadcom, all better. So it's, Lindsay, it's been solely.
the tech market and we spoil for choice you start to look below the heavyweights you know i'm talking about the trillion dollar companies and you see a lot of those in the supply chain a lot of smaller companies in the supply chain uh there's been very very strong gains there's a lot of activity around it is it is dominating the market the other companies you know the banks and the retailers and and all of those are mixed, but they're coming knowingly on a kind of...
participation that those other big companies have had. Are you selling any, David? Are you one of these people that says to Mr. Johnson, Mr. Johnson, your NVIDIA holding is now above the 5% that was our target. It's now 5.8%, so I'm selling some down to get you down to the 5%. Do you work like that? No, I don't work like that. I don't. You know why? I look at it and say, is there momentum behind it? Hmm. going up, you know, can it continue like this?
And I know that it's high and I know that a day is going to come where something will happen that will knock it back a bit because, you know, it'll be challenged like we've seen with all the other tech companies. Well, it did happen, didn't it? Because it went to a record high which was close to 150 and then went back below 100 at one stage, I think. Remember DeepSeek and also a lot of restrictions on selling of tech. to China. Yes, it goes through that.
But when it no longer makes the best chips in the world and challenges come, yeah, then we'll get out. But what's happened though, and why I say that, you know, if it's a winner, if I was going to buy stock for other clients, which I will still do, why must I sell, you know, why must I sell yours if I'm going to buy them for some new clients? Why must I sell? Diversification, David. That's what people will say. We'll say, we said 5%. You can't go above 5%.
We're above 5%, so we're selling it down. That's what traditional fund managers do. Yeah. Now, that is traditional because it's set in the guidelines that they get. They all set guidelines, and they stick to it. But, I mean, it's been a phenomenal it's really been a phenomenal stock. And I can't yeah, it staggered me. I think in some of our portfolios, it's as much as 20%, but we keep knocking it back to 15% and then it goes up to 20% again. So, look, you know, I'm open-minded about this.
I'm not dogmatic. I'm not a Bitcoin person, you know, so this is going to a million, you know, and never sell those cards. When it's time to sell. Lindsay, you know, you have to watch this market carefully. Even though you don't take, you know, even though you don't trade on a day-to-day basis, and I might not trade for a year, two years, three years, you have to watch very, very carefully every day. That's the discipline that I kind of impose upon myself. Just read.
Yeah, but you don't sell and you don't buy. So, I mean, watching is one thing, acting is another, David. You don't often act. I mean, you're not an actor.
active portfolio manager are you there's not much churn in your accounts we're not at all absolutely not at all but i mean that that's what i'm saying so it's not as though we just you know we're negligent or reckless or donkey no watch every day the news headlines go through them you know is there anything today that you know that should make me change my mind and or change the portfolio is there anything and you go through it what what
what i do is also keep a very narrow range of companies in the universe. So it's no more than 30 businesses, 15 to 30-odd, maybe a little bit more. You're watching the others. I'm watching. It doesn't mean I don't watch what else is happening. But that allows you to keep control of clients' portfolios. Tell me another thing. Talking about clients, and don't think I'm probing here. It's of great interest to me. You've got a great reputation. You put your name out there. You enjoy chatting.
You're an enthusiastic chatterbox. You wouldn't do it otherwise. But you do have a very high profile. And from what I understand, although I've never asked what you've earned compound over the years, but I think you've done very well for your clients. Do you get new clients, Dave? Do you accept new clients? We do. It's not easy because there's not a lot of wealth being created. And so we're picking them up.
The other thing is you've got to be very careful about who you pick up because they've got to share your philosophy. Lindsay, it takes five years to give them the return, five to ten years before your skills come through. For me, it's daunting. to get into the market now. I mean, oh boy, you get a new client who says, here's 5, 10, 15 million, you know. Put it into portfolio. You say, oh, okay. You know. Yeah, you're buying NVIDIA at $160 a share.
Yeah. You think to yourself, oh, gosh, difficult. Very difficult. That's why I'm saying you've got to give us time. and People are, you know, you get good clients, but people can be impatient. They do watch their wealth on a day-to-day basis, simply because most of the people who've got money are elderly, you know, coming to the end of their working life. And that's a tricky thing. So, you know, we pay a lot of attention to clients.
If I was running a mutual fund, you know, you buy and sell your shares, you do what you're doing, but you never come face-to-face with a client. But that's the discipline. That's a discipline they lack because when you've done something wrong, that client reminds you all the time. When you run a mutual fund or a unit trust or an ETF, you don't give a damn.
You do something wrong, well, you're off the hook because no one's going to get you because you never see the clients whose money you have played with. And I say played with or been frivolous with, but when you've got a private client in front of you sitting across the desk. That's a massive discipline for a portfolio manager. If you've got to explain to that client exactly why you bought Nova Nordisk or something, which is down 30% or 40%, as you know, well, blah, blah, blah, you know.
Yes, and they're entitled to know. Of course they are. Okay, David, let's have a look at some of the moves on the JSC today because this is the 5 o'clock shadow. I have got Remgrove. up 4.25%. Trueworths up 3.75%. You don't see those names at the top very much. Pan-African Resources up 3.3%. Life Healthcare has gained by 3.2%. And TFG, the old Fashini Group, up 3.1%. So is this an interest rate story, the fact that we've got two major retailers in the top five, David?
It's odd because retailers have come under a lot of pressure recently, as have the banks. And that's why it's interesting to see. I'm not quite sure what the motivation, whether it was the RAND that is picking up strength at $17.50 that's given people the enthusiasm to get into that market or whether it appears cheap. I think it's cheap. When I say I think it's cheap, I think it's because there's a perception that these shares are cheap that you're starting to find people buying it.
Lindsay, this is... We're in a very speculative market. We have been and always are. And there's a huge amount of money that pushes money, that pushes shares up and down each day. And so it's very hard to read it on a day-to-day basis. But I think the retailers here have been under pressure. Trueworths, Mr. Price, all of them. Even ShopRite, I think, is negative on the year, if you looked at ShopRite. Certainly two of them, Mr. Price, and there might be others.
Our big miners, our diversified miners, are kind of flack to down on the year. And banks also know where to be seen. You know, if they're up, I think Capitec might be the best performer. You know, there's a story I have to tell you if I progress. It's quite interesting because if you understand the history of Capitec, I do, but mainly through your wisdom. Well, Happy Tech was formed when APSA was formed. Well, when APSA, which was Trust Bank and Volkskasse, the big Afrikaans banks, formed APSA.
And people don't realize that APSA means the Amalgamated Banks of Southern Africa. That's right. So they were amalgamated banks. I'm trying to think who else was there. Trust Bank, Volkskasse, yeah. Who else? Anyway. Which was the one that went bang? Which was the one that went bang? Oh. Oh. I'm trying to think. You got me. But Bull and Bank. was kind of discarded. You know, Burland Bank was not included and the shell became, was up for grabs and that became Capitec. Okay. And Capitec, yeah.
So Capitec had no, you know, it had the best computers because it could start from zero. It had no legacy issues at all. You know, there was nothing holding it back. It didn't have the structures that the other banks had, you know. In every Dorpy, there was a... On the corner, one was a Volkskasse and the other was a trust bank and so on. And, you know, they started at a very low level. Bank of Borland. Today, you look at the market cap. Market cap of APSA, what's it, 150 billion?
Yeah. The market cap of Capitec. Oh, what is it? 400. 400 billion. It's… Just below first-rand in terms of market cap. So, I mean, you know, not being dragged down by history. It's been a remarkable, remarkable history. It's been a remarkable run and success story. But, I mean, no one believes that this was the old Bank of Burland. It was so funny because we were just chatting about this morning and looked at some of the Bank of Burland adverts from the
1980s. It was... remarkable how the dynamics have changed. It's interesting you say it's a speculative market as well. I suppose when it comes to retailers, and just to finish this conversation, you say they're cheap. They're going to have to be very cheap to entice you in, David. No, I'm not going in. You know why? They're well run, which means they're not making any kind of first of all, there's no demand for credit. Secondly, they're not creating crypto. So it's just their capital.
They make a decent return on their capital. So from that point of view, you get a very high dividend yield. But I don't think I could exist on dividend yield. I'm not a dividend yield person. So I think in a global economy where you have such dynamic growth opportunities and you pick out those growth, I'm not enticed by dividend yields. Just on the bank collapse, in February 2002, Sambo Bank, then South Africa's seventh largest bank, collapsed.
It all started with an announcement by ABSA on the 15th of significant losses in its micro-lending subsidiary Unifor. Remember that? And then Sambo had a similar clientele to Unifor, and a run on Sambo started and wiped out 20% of Sambo's deposits within five weeks. It's a building society. Yeah, you know, and the building societies, which is their weakness, was that they lent long and borrowed short.
Yes. And that was it because by borrowing short, you know, you always had this pool and they lent that long. But when there was a run, that was a somber, of course. Yeah. I was at 702 at the time. Yeah, I remember distinctly. Okay, I've got my indices here. I've got the resources index down nearly a percent on the close. Industrials up 0.4%, financials up 1.1%. The top 40 index, 89,165, which is up a quarter. And the all-share itself, not the top 40, just below 97,000, up a third of a percent.
We have to talk about Diogo Jota, the Liverpool footballer, a really, really good player. Portugal international, killed in the early hours of the morning in Spain, driving his Lamborghini with his brother. the story is He took over, overtook a car rather, and a tyre burst could be possible with the incredible heat they have in Spain. It could have been something to do with that. But anyway, the car was completely burnt out. I don't know if you've seen the pictures.
It must have been full of petrol for this to happen. This thing was incinerated. Horrible. They must have burnt to death in the car, both the boys, the brother as well. But, David, I do think you should sit and reflect about the sort of money that these kids are paid when they join a club. And the first thing they do, because everyone else does it, is buy a silly supercar. And they've been driving for maybe five years, some of them, maybe less.
And I think the agents in the club should put something in their contract to say, tell us if you're going to buy this car. It's your right. It's your choice. It's up to you. But you are required to go on a series of interviews. intensive advanced driving lessons. Something like that, even a little thing like that can help. Same thing happened to Antonio from West Ham last year. He wrapped his Ferrari around a tree and he's lucky to have survived, but it's ruined his career.
He won't play again for West Ham. I'm so sad about the, you know, what happened to him because he was a lovely chap. He was liked by everybody. You know, he never, there was nothing, even when he was sent off, you always wondered why. It was the odd occasion. which wasn't anyway, but it's very sad. But you bring up such an important point. I mean, if you go and see, go to any game, go to any ground, and you see the players arriving where they're not arriving in the coach.
It's just crazy the amount of and it's I suppose having come from humble circumstances, many of these players, it's a way of Just saying that they're there and that. But these are incredibly powerful machines, you know, that should be driven by people with the right kind of license. Yes. You know, I must tell you something. I had a Mini Cooper S. Yes, I remember that. I promise you, when I used to hit that accelerator button, this thing took off. Yeah. And it's scary.
I mean, I'm talking about a Mini. I'm not talking about any major sports car. And you get speed there. which is frightening. And if you don't know how to drive, something should happen like a burst of fire or who knows, anything runs across the road. It's crazy. I'm just so sad that this happens to people like that under these circumstances. I didn't know the circumstances. And I know that he'd been killed in a car crash, but not that it wasn't handled. Yeah, it was horrible.
If you can come and have a look at the pictures. I hope people listen to this and say this is ridiculous. If you looked at the parking lots, and they don't buy one car. These types go by five, six. Were they earning how many? 300,000 pounds or 400,000 pounds a week? This is easy within their purse. Talking about that, Ronaldo, who's 40 years old and in Saudi Arabia, he has sold his soul to the Saudi dollar. at the expense of football.
They get crowds of between 10,000 and 25,000 in Saudi Arabia to watch these games. His daily, not weekly or monthly or yearly, his daily salary, basic salary, £488,000 a day for the next two years. He's got an entourage of 16 people that look after him, two chefs. I don't know why he needs two chefs. All he eats is steamed fish and vegetables, the odd juice here and there.
and some vitamin supplements who needs two chefs to do that i can do that for him i'll put my hand up he's got the use of a private jet for two years and everything else that is your dick david yeah i suppose he's a crowd drawer they only get they only get 25 000 people at a man and how much are they paying they know it's silly yeah there's something about me i Rinaldo is very clean, as you say, steamed fish, doesn't drink Coca-Cola or anything like that, pushes away any water and everything.
Funny enough, Messi is, I find, more of an ambassador. Yes. He's just got that smile, and he's done an enormous amount for Miami, for them. And I think he plays for the enjoyment. I don't know. I'm sure he gets paid a lot. He does, but not as much as Ronaldo. But, you know, give it away. What are you doing with it? Messi was a god with a small B in Barcelona. I mean, I went to see him so many times.
When he gets the ball, David, playing for Barcelona in that giant stadium, I'm sitting with 80,000 people. Everyone goes silent. It's almost like they've got this intake of breath. What are you going to do next, Messi? And it's a remarkable thing. Boston. Okay. Okay, phone him back now because we're finished. David Shapiro is from Sasson Securities and that was the five o'clock shadow.
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