It's a year since 2020's hard lockdown ended.
We're back in level 4 today.
But life has changed a lot. We've adapted to the pandemic and its effects on our lives and businesses.
So, what's the state of the South African economy today, and how does it affect your investments?
How to Grow a Multi-Million Rand Retirement
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Q. “Timon you were right about the delay in the voting in the USA, due to the counting of hand mail.
But now the big question is.
What can we expect with the US stock markets, with Joe Biden becoming the next American President?”
A. I did some research on the weekend. When I went to back-test the US stock markets over the last 23 election years, what I found might surprise ... ››› more
Have you heard of SaaS?
Well, SaaS forms part of the growing Cloud Computing industry. And over the past two decades, it's grown exponentially!
Just consider in the 2000's, just 12% of businesses were making use of it.
But thanks to the growth of the internet, the SaaS market has exploded with more than 73% of all businesses using it today!
And it's thanks to this rapid adoption, t... ››› more
It was quite a week for airline stocks.
It started with the announcement from Warren Buffett that Berkshire Hathaway had sold stakes in four major US airlines: United, Delta, Southwest and American Airlines.
This is an exceptionally uncharacteristic move from the legendary value investor.
Firstly, Buffett is all about “buy and hold”. He rarely sells investments unless, the prospect... ››› more
I never thought I'd say this…
While President Cyril Ramaphosa may be less corrupt than Zuma, his economic theories are almost as bad.
I am too.
Like the rest of the market, I celebrated when Ramaphosa replaced Zuma. Aided by heroes of the anti-Zuma movement like Pravin Gordon, I truly hoped we'd see a “New Dawn” for South Africa and a turnaround for our economy.
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It's all over the news…
“Why SA is on the verge of an IMF bailout” - Business Live
“Is an IMF bailout for SA imminent” - News 24
“Does SA need help from the IMF?” - eNCA
Prominent billionaire and business man, Johann Rupert has even suggested this. According to a Business Live report Rupert said an IMF bailout is “a serious possibility”, while Paul Harris, one of ... ››› more
If you're in your 50's you might have heard of ‘prescribed assets' before - for millennials this term might be ‘foreign'.
But it is very actual - in fact it's from the 1980's and it was part of the Apartheid government playbook.
In short - the government back then forced pension funds through legislation to invest up to 77.5% of their funds into parastatals and government bonds.
No... ››› more
The International Monetary Fund has increased its global growth forecast to 3.9% for 2018 on the back of US Tax cuts that will most likely stimulate growth.
Typically, global growth above 3.5% is a strong catalyst for commodity price growth and emerging markets.
SA is still in a honeymoon phase after Ramaphosa's election. The Rand strength and other positive economic results have raised th... ››› more
Many homeowners can't afford to keep up with their bond payments thanks to the latest interest rate hike... And economists expect even more hikes over the next two years. That means there'll be an oversupply of properties on the market which means one thing - Bargain properties on the market!
You see, properties sold on auctions are about 30% cheaper than ones sold on the open market!
To fin... ››› more
In previous essays, I've shown how most South African state-owned institutions are crumbling…
The SABC management and finances are in constant disarray, so is Eskom, Sanral, SAA, the postal service and the education system…
Just look at this quote from Robert McNamara, ex-president of the World Bank, during visit to South Africa in 1982.
"I have seen very few countries in the world... ››› more
Since his appointment in mid-2014 Nhlanhla Nene emphasised the fact that government spending needed to be reined in. He suggested a cap on government spending and a limit to government employee wage increases.
These are certainly not popular things to say when you are in the ANC.
But it was tolerated.
Until now, that is.
You see, Mr Nene dared criticize Dudu Myeni, the current chairpers... ››› more
Tomorrow afternoon, the South African Reserve Bank's monetary policy committee meeting will conclude.
Will the committee decide to hike rates or will it keep then unchanged?
Let's take a look…
Interest rates may rise in November
Thanks to the US Federal Reserve keeping its interest rates unchanged last Thursday, it looks likely that the Reserve Bank will follow its lead, reports F... ››› more
On August 31 President Jacob Zuma told the Business Day Newspaper that: “The economy is sick.” and that only “government tightened its belt.”
(After handing around above CPI wage increases to all manner of public workers - and bailing out SAA, the SABC and any number of other state-funded white elephant money-pits. Not to even mention Nkandla...)
Then our dear president said “Sho... ››› more
The Bank of America Merrill Lynch recently published new data that ranks countries according to how risky they are.
The ranking comes from how likely it is that a country will default on its sovereign debt.
South Africa ranks just outside the top ten.
Let's take a closer look at what this means for SA…
The risk of defaulting on sovereign debt
Bank of America Merrill Lynch’s ... ››› more
This morning, Taste Holdings announced that it's entered an agreement with Starbucks that will see the coffee stores opening in South Africa.
Shares in Taste soared on the back of the news, rising over 19%.
Let's take a closer look at the deal…
Starbucks stores will open from next year
Taste [JSE:TAS] has “signed an exclusive agreement to develop Starbucks outlets” across Sout... ››› more
Yesterday, the governor of the South African Reserve Bank announced that the monetary policy committee decided not to hike interest rates.
But the central bank revealed that it was likely to be just a matter of time before rates would have to rise to keep inflation under control.
The rand responded well to the news.
Let's take a closer look at what's going on…
The rand benefits fr... ››› more
It just seems like all government run institutions are doomed to wasting money.
Eskom's latest wastage is R1.5 billion a year on hot meals for its employees. That's while it can't even get the R4 billion owed to it by 20 municipalities and the R8 billion it's owed by Soweto residents…
But today I'm not here to talk about Eskom. I'm sure you've heard enough about it in the news recently.
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Yesterday, the South African Reserve Bank announced the outcome of its monetary policy committee (MPC) meeting.
The central bank opted to leave its repo rate unchanged. This led major banks to leave their interest rates unchanged too.
Let's take a look at the reasons behind the Reserve Bank's decision…
The repo rate remains at 5.75%
The Reserve Bank announced that it was keeping t... ››› more
Earlier today, South African power utility Eskom revealed that the country's facing a high risk of load shedding. This is down to the failure of two of its power generators.
For several years, issues with power supplies have plagued SA.
This comes as Eskom missed another deadline for opening a new power plant unit. It was due to come online in December.
Let's take a closer look at what's ... ››› more
A friend of mine, Isaac, decided that in addition to investing in individual shares he also wanted to save a monthly amount into an ETF. It's a hassle free way to save for the long run with lower risk than a share picking portfolio.
So Isaac contacted his bank and asked his financial advisor which ETFs would be suitable to invest a monthly sum into. His advisor actually gave him a sensible comb... ››› more
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