On 24 February 2020, I sent out an article:
Coronavirus + Eskom + Moody's + Chart = Rand disaster
At the time the South African rand was trading at R14.20.
I predicted that the USD/ZAR would move to the first target at R16.00 within a couple of weeks…
This was due to the following factors at the time…
• The Coronavirus was declared by the WHO as a global health emergency. ... ››› more
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
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
Q. “I have a strange question and I don't know if you can help me…
On the one side I have your MATI Trader System which I follow and take trades around twice a week.
On the other side, I have this incredible desire where I would also like to take a few trades based on different market events that present themselves in a day…
Do you have any suggestions on how I can compromise bet... ››› more
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
The Rand has strengthened against the majors over the past few weeks, but it has lost momentum and can't break below a key support level.
We have our third quarter GDP numbers out at 11h30.
With trade war uncertainty that hasn't abated and the VIX (aka the fear gauge) climbing from below 12 to above 14, we should see the Rand weaken against the majors over the next week or two.
When the ... ››› more
While it may have been just another ordinary Thursday afternoon to you and me, for eight South Africans sitting around a table in a small boardroom in Pretoria, things looked very different.
These eight people held the fate of the country in their hands.
Call things right, and they may just put SA's ailing economy back on track. Call things wrong, and they could decimate the rand, stifle g... ››› more
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
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
It's finals time!
The 2019 Rugby World Cup is almost at an end but there are still two opportunities for us to profit!
Third and fourth place will be decided on Friday between the defending champions and Wales.
While South Africa look to take on England on Saturday, in what will be considered the most important game of the tournament.
Will South Africa stun the world and li... ››› more
The Rand has made a strong recovery against the major currency pairs over the past month.
And faces several headwinds this week with the Mid-Term Budget Speech due tomorrow.
There's also the Moody's decision and a slew of important data points from the US, Europe and the UK.
These events have the potential to see the Rand lose 50c or more in the coming weeks against the USD.
Look at t... ››› more
The latest release from StatsSA showed that South Africa's economy grew 3.1% for the second quarter of 2019.
This was better than the 2.5% expected by most economists, and it's a good sign for South African's who were worried about recession hitting.
Unfortunately, this growth doesn't necessarily mean our economy is growing again…
With first quarter GDP shrinking 3.2%, 3.1% growth do... ››› more
The rand has collapsed over the last two weeks. It moved from below R13,90/$ to worse than R15,30/$. That's more than 10% weaker in a fortnight. Obviously, many of you are worried you've lost your chance to get money out of SA at a reasonable exchange rate.
The question on everyone's mind: Should you get out now or wait for a better level?
The only way to answer this question is to look f... ››› more
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
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
Early on Tuesday last week, Finance Minister Tito Mboweni announced that Eskom will be receiving an additional R59 billion over the next two years, to help Eskom service its debt.
There are mixed reviews about the bill and how it will help South Africa.
Some people say this could be the light at the end of the tunnel and others say it's just another wait for an oncoming train…
As ... ››› more
The G20 summit in Osaka, Japan has just finished.
Who would have thought this two-day conference could have such an impact on our stocks, economy and even our currency.
And even the bullish sentiment towards the world markets and the US dollar, has left South Africa in a troubled state for the rand for rest of 2019.
Today I'm going to discuss two reasons why I expect the rand to we... ››› more
2019 has arrived and we are already five months into the year!
We need to start preparing for this year's two biggest sporting events.
The Cricket World Cup & the Rugby World Cup.
In order for us to get a head start on the competition, I'll be breaking down the first of these major sporting events starting on the 30th of May.
The Cricket World Cup!
So let's get started.
... ››› more
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
If you have a JSE portfolio, you know the markets have been bad for the last few years.
From the start of January 2015 until the end of February 2019, the JSE top 40 is up less than 15%, which is less than 5% per year. This is much less than the “normal” return of about 15% per year.
The recent underperformance of the JSE is a key reason many retirees are now experiencing a shortfall i... ››› more
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