| Good morning Voornaam, Karooooo is such a lovely example of why retaining exposure to a company with decent prospects is a good idea, even if you sometimes reduce your position in response to heightened risks. This is exactly how the journey went for me with this company.
In the aftermath of the pandemic, Karooooo's expansion to Southeast Asia quickly became a headache. They had staffed up and invested in capacity, only to sit on their hands with an environment of restrictions that made it impossible to grow the business. As the quarters ticked over and there was little sign of improvement, investors got nervous and the valuation started to unwind.
At that point, in the interests of prudence, I reduced my exposure. Note: reducing and selling completely aren't the same thing. If Southeast Asia was allowed to actually do business, I figured that they would claw their way back and then hopefully grow beyond expectations. Thankfully, this is what has happened and the latest results only add to that story.
Everyone has their own style in the market. Mine is to try and remember that things are rarely as good or as bad as they look. There are nuances and those nuances create both risk and opportunity, so I position myself accordingly.
In addition to the Karooooo earnings news, Afrimat announced the completion of the integration of Lafarge and Stor-Age is expanding their Parklands facility. There are also the usual Nibbles, including director dealings that are always important to consider.
Get insights into these stories in Ghost Bites>>>
There's a brand new Magic Markets episode for you, in which we talk about something in the markets that tends to capture the imagination of investors: retail turnarounds. Pick n Pay is just one example on the local market, with many more examples internationally (like Walgreens which we covered in Magic Markets Premium this week for our subscribers). In this show, we spoke through some of the key macroeconomic indicators that help in assessing the likelihood of success of turnarounds, before diving into the typical milestones of a turnaround and when the risk-reward balance seems to be at its most appealing. Enjoy it here>>>
Make sure you read the international update section further down in the mailer for the latest from US banking earnings. It should show you exactly why I spend a lot of time on offshore opportunities and why my efforts with Mohammed Nalla in Magic Markets are focused on that market.
And remember, for the qualifying entrepreneurs among you, MIC Khulisani Ventures is looking to provide capital to businesses that are ready to aggressively grow. Applications need to be in by the end of January, with capital expected to flow by March. To fully understand the opportunity, be sure to listen to this podcast>>>
Have a great day! |
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| SATRIX: Low-risk high-reward - the low-volatility anomaly |
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| | | Does taking higher risk always lead to higher returns? Or is there something to be said for seeking out lower volatility equity exposure, especially if it can generate similar overall returns?
Nico Katzke of Satrix digs into the numbers to bring you this insightful piece on portfolio and risk strategy.
Enjoy it here>>> |
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| Ghost Wrap - five insights from December |
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| Ghost Wrap: There were some great stories in December that are well worth keeping in mind in January. Italtile's share price needs a careful watch. Prosus is making major acquisitions again. Renergen is still dealing with teething issues - and a legal dispute as well. Metair is getting very little out of its Turkish business. Finally, will Bell Equipment shareholders kick themselves? I cover these topics in Ghost Wrap, brought to you by Forvis Mazars and available here>>> |
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| GHOST BITES - Making sense of SENS on the local market |
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| | | Karooooo released another strong set of numbers. Afrimat has completed the Lafarge acquisition and needs the economy to play ball. Stor-Age is expanding the Parklands facility. Get the details in Ghost Bites. |
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| DOMINIQUE OLIVIER - DeLorean: Who's driving this thing? |
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| Gullwing doors, fairy curses, cocaine busts and sneaky accounts in Panama. As it turns out, being the world’s most recognisable time machine isn’t even the most interesting part of the DeLorean story. Buckle up, dear reader, because Dominique Olivier is taking a little drive down memory lane – and where we’re going, we don’t need roads. |
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| Unlock the Stock - KAL Group |
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| | | Unlock the Stock: KAL Group joined the platform for the first time to talk about the performance and strategic focus areas in the broader agriculture industry. Enjoy the presentation and Q&A here>>> |
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| MAGAnomics: Trump and the global economy |
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| International Business Snippet: |
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| Banking sector earnings are coming in thick and fast. JPMorgan Chase delivered record profits and beat estimates for the fourth quarter, so my core banking position continues to deliver. Revenue increased 10% and profit was up a spectacular 50%, boosted by strong Wall Street activity and investment banking fee growth of 49%.
Goldman Sachs is the other US banking position in my portfolio, as I like the tilt towards investment banking and related revenues. Profit doubled year-on-year, so that's worked out rather well.
Even Citigroup delivered the goods, with that banking group having been through some difficult times. They beat estimates and enjoyed strong investment banking growth as well, although not to the extent of my favourite Wall Street names.
My view is simple: the US is the home of capitalism, so that's where I want my banking exposure. We've discussed this before in Magic Markets Premium and I have no doubt we will cover the banks again soon for our subscribers. At R99/month, can you really afford to miss out on that?
Plus, you get our latest research on Walgreens, a US pharmacy retailer that finds itself at a very appealing point in its turnaround.
If you're ready to give your US market knowledge a proper boost, then subscribe today with no minimum monthly commitment. It's worth it. |
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| Magic Markets: The year ahead - buckle up! |
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| | | Magic Markets: To kick off the year, we couldn’t resist talking about the major themes that have carried over from 2024 into a new calendar year. US – China relations, interest rates, frothiness in equity valuations – it’s all in here, along with a sobering discussion that gives context to the JSE performance last year vs. global alternatives. Find out more here>>> |
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| Better than expected Core Inflation data out of the US has seen risk appetite returning to markets. In turn, we have seen the dollar falling along with US Treasury Yields, while equity markets have gained.
The JSE All-Share Index followed global benchmarks higher into the close last night and is expected to open slightly firmer this morning. The rand, while having strengthened against a weakening dollar and British pound yesterday, is marginally softer in early trade today.
Oil prices have gained as supply worries from US-imposed sanctions on Russia meet lower than expected inventory levels by US commercial firms, along with an optimistic demand outlook for the commodity released by OPEC+ yesterday.
Gold is trading firmer, aided by a softer dollar.
Traders will be on the watch for Retail and Core Retail Sales data out of the US this afternoon.
Key Indicators: USD/ZAR R18.80/$ | US 10yr 4.65% | Gold $2,697/oz | Platinum $943/oz | Brent Crude $81.35
As often as practically possible, insights from the IG Markets morning macro update by Shaun Murison will be featured here. Where this isn't possible, only indicators will be provided. If you want to learn more about trading, refer back to The Trader's Handbook, a podcast series that takes you through many of the important principles in trading. |
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