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Junk Status

  • South Africa's ailing, booming economy - what's going on?
  • “The South African economy is BOOMING.” “The South African economy is BLEEDING.” Both these statements are true at the same time. South Africa's economy is back at the size it was before the coronavirus pandemic struck, after growing faster-than-expected in the first quarter. Gross domestic product expanded 1.9% in the three months through March, compared with revised growth of... ››› more
  • [09 June 2022]
  • My First prediction for 2021
  • Welcome to the first prediction article for the year. And what better way to start, than to see where our currency is heading. Now if you've been following my rand predictions from last year, you'd know that I expected the rand to strengthen from R16.50 down to R15.00 against the US dollar. If you missed the article, you can catch up here... America is going to hell - And the S... ››› more
  • [13 January 2021]
  • My Structured Product Pick for June 2020
  • It's very hard to make sense of markets right now. On the one hand, it's crystal clear the economy is in a mess. Unemployment is even higher than the worst of the Global Financial Crisis of 2008. The damage done by lockdowns cannot be easily undone. On the other hand, governments have pumped unprecedented amounts of money into the system and the market seems to be on an unstoppable rise. J... ››› more
  • [19 June 2020]
  • Breaking news: This move by government could send the gold price past $2,000
  • Just in: The South African Reserve Bank just lowered interest rates by another 1%, the second time in a month.   This puts the South African repo rate at a historic low!   We can write essays about what the lower interest rate means for business and consumers. But in short - lowering interest rates historically has meant one thing for gold. Its price goes up!   And as you can see in the c... ››› more
  • [15 April 2020]
  • Why the rand will hit R22.44 thanks to this double-whammy
  • March will be known as the worst month of all-time for the South African rand. With the ongoing lockdown, the increasing rate of COVID-19 cases, the crumbling economy, and the downgrading from Moody's - It's just been bad news after bad news for SA. And what happened last week? Well we saw the South African rand hit record lows passing through the R19.00 mark against the US dollar. ... ››› more
  • [14 April 2020]
  • Do this today so you don't lose more as the rand continues to flounder
  • R19.34! It's enough to make you sick. Because that, my friend, is not the price of a loaf of bread these days. Or even the cost of a litre of petrol. It's how much you would have to cough up to buy a single dollar on Monday morning. Shocked? I was too, when three days ago the ZAR touched its worst level ever! And the awful reality is, it's not about to rally back to R14.00... ››› more
  • [09 April 2020]
  • Watch out for the double-dip
  • When is the right time to buy our market for the recovery? That's the question I bet everyone's been asking. We all know how lucrative buying the bottom following the 2008 financial crisis was… And every investor certainly wants a repeat of that performance. ________________________________________     Five penny stocks for crisis profits   • How to pocket u... ››› more
  • [08 April 2020]
  • COVID-19 + Junk Status + Recession fears = another 25% crash on the JSE
  • March 2020, will be known as one of the most brutal months that the JSE and the equity markets have ever seen. On 12 March, the index fell 9.51% and a further 11.98% on 16 March - two of the biggest daily drops since the 2008 Financial Crash. CEO - JSE, Leila Fourie, said in an interview about the value drop and trade volumes: “Over the past few weeks on average we've been processing... ››› more
  • [06 April 2020]
  • Coronavirus + Eskom + Moody's + Chart = Rand disaster
  • It's been a terrible start for the rand. Last week we saw it hit R15.00, dropping it down over 6.07% for the year. According to Bloomberg, the rand was the second-worst performing currency out of the 24 emerging-market currencies world-wide. And it looks like this is only the beginning. In today's article we'll discuss the four reasons why I expect the rand to plunge to R1... ››› more
  • [24 February 2020]
  • Two of my favourite contrarian investment ideas that can make you money in 2020
  • Sometimes taking a contrarian view of a market or investment, can pay off big time… One of my all-time favourite investors, Benjamin Graham, proved this nearly 100 years - during the Great Depression. When stocks crashed nearly 70%, Benjamin Graham didn't give up and avoid the stock market. In fact, he saw this as a perfect opportunity to make money by pinpointing bargain stocks from... ››› more
  • [06 January 2020]
  • What happens if Moody's downgrades South Africa to JUNK?!
  • Q. “Hi Timon, I read the weekly article where you expect the JSE ALSI40 to rally. My question is, if Moody's does eventually decide to downgrade South Africa to junk what would happen and when is the next grading?” A. The next possible downgrading for South Africa would happen as soon as March, if South Africa fails to come up with a plan with “Credible debt-stabilisation”.  ... ››› more
  • [13 November 2019]
  • Don't get caught in South Africa's debt death-spiral
  • Last Friday, ratings agency Moodys dropped their outlook for SA debt from stable to negative. This means within the next 6 to 24 months it's likely we'll see the last of the three major ratings agencies cut our government debt rating to junk. As an economist, I am now all but certain the downgrade will happen. SA will become a junk status borrower. ________________________________________... ››› more
  • [08 November 2019]
  • Is it now time to bail on JSE listed stocks for good?
  • The JSE is down 3.95% for the past three months, 5.13% in the past six and we're only up 8% over the past three years. With politics the way they are and the performance of the South African economy many investors are asking whether they should bail on SA listed stocks for good. I'll give you my take on the situation now, let's first have a look at the facts: SA’s economy is already... ››› more
  • [16 October 2019]
  • Investors rank SA Junk status
  • Last week I wrote about never letting a good crisis go to waste. It's one of the most difficult things for investors to do while you're in the thick of it. You don't want to deploy capital when things look like they are going to get worse, much worse. But that is the precise time to “slowly drip” capital into the market. It's an investors primary focus to look past the noise to see opportunity... ››› more
  • [13 August 2019]
  • This is a bitter pill to swallow
  • Q. “I have some Rebosis shares. The price has recently crashed from over R10 a share to around R1.62 at today's price. In your opinion is it worth buying at this level to try and average down, or is it better to sell and take the loss.”   A. This is a bitter pill to swallow but it must be said with your trading.    I personally exit any trades that are moving in the wrong dir... ››› more
  • [03 April 2019]
  • Three top risks for the rand in 2019 and how to profit
  • South Africans are at the edge of their seats, with what's going on this year. From the ongoing US-China trade war, never ending Brexit decision, South Africa going back into the dark ages, the spreading rumours that the US is about to enter a recession this year - and this is just the tip of the iceberg for 2019. The worst is yet to come. And it all starts, and ends, with the rand. To... ››› more
  • [02 April 2019]
  • Market survives “Risk Event Storm”
  • Last week was a busy week with the market sailing through a gauntlet of central bank meetings, escalating trade tensions and a historic meeting between the US and North Korea. Surprisingly the JSE held up relatively well buoyed by a weaker Rand. We've also seen volatility (measured by the VIX) drop back towards 12, a level that signals the market might not be pricing in the risk of a “Trump ... ››› more
  • [19 June 2018]
  • Nine years upside: Time to lock in some of those gains?
  • As we head to the end of 2017, we are approaching the nine year anniversary of the current bull market. If nine years seems like a long time, you are correct: It is. This is the second longest bull market in history and counting. Most stock indices are at all-time highs and many investors are currently sitting on massive gains in their portfolios. At the same time risks are rising. We have... ››› more
  • [07 December 2017]
  • South Africa gets downgraded and the Rand strengthens - what's going on?
  • On Friday 24 November S&P downgraded South Africa's long term local government bonds to junk rating. The problem according to S&P is that government in recent years have focused merely on the distribution of income, instead of trying to grow our income… “As a consequence, South Africa’s economy has stagnated and external competitiveness has eroded. We expect that offsetting fiscal m... ››› more
  • [29 November 2017]
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