| Friday 07 January 2022 Good morning Voornaam,
The markets have been quiet on the news front. That doesn't mean we haven't already seen some big moves in 2022 in individual stocks.
Internationally, tech stocks are being given a proper smack to start the year. It's been a long time coming and probably isn't over yet. I've written many times in Ghost Mail about the importance of the yield curve and its impact on companies that are not currently generating positive cash flows.
My weekly publication is the perfect complement to InceConnect, as I focus on discussing investment concepts in Ghost Mail and market news here in InceConnect. Sign up for free to Ghost Mail at this link.
Locally, Rebosis A is alre ady rewarding speculative punters with the kind of payoff profile that they dream of. The JSE-listed property company's share price has approximately doubled since Christmas!
Purple Group also isn't hanging around, up almost 30% since Christmas. This one is always a sensitive topic, as retail investors have a deep emotional connection to Easy Equities. That fact in and of itself is key to the bull case for this stock.
I received reader feedback yesterday that my comments in yesterday's InceConnect on share sales by the CFO were incomplete. Some readers wanted me to note that the sales were a relatively small percentage of his holdings. To clarify, I'm not for a second suggestion that the execs are jumping ship or anything of the sort.
Instead, I was pointing out that the CFO has sold down a portion of his stake at a time when retail investors are piling into the market. It's a clever bit of timing and is simply something to keep an eye on. If it becomes a habit by the execs, then questions should be asked by investors. A small amount of insider selling isn't cause for concern in isolation.
And anyway, in case you haven't noticed from my logo, purple is one of my favourite colours!
Moving on, Glencore has closed the sale of the Ernest Henry Mining copper-gold mine in Australia to Evolution Mining Limited. This puts AUD800 million in Glencore's bank account immediately and adds another AUD200 million in a year's time. Evolution has assumed all rehabilitation obligations and liabilities as part of the deal. Glencore will offtake 100% of the copper concentrate produced at the mine.
The first of today's feature articles is on South32, which is investing further into aluminium. I enjoyed researching this deal and aluminium as a commodity yesterday. Aluminium has certain properties that make it usef ul in a world of energy efficiency. It is unfortunately highly energy-intensive to produce, so South32 has focused on operations that use 100% renewable energy. Read the full article here.
I almost can't believe I'm writing this, but it seems as though the Ascendis narrative is finally improving. It remains highly speculative and all comes down to the eventual terms that the board can negotiate with the consortium that bought the debt from Blantyre. Still, things are at least looking up for a company that has taken multiple body blows. Read the latest here.
New Magic Markets podc asts will return next week. In the meantime, scratch your podcast itch by listening to our show on the winners and losers in our 2021 portfolios. It's a great opportunity to be part of a frank discussion on what did and didn't work. You can listen to the episode here.
Thanks for joining us in this opening week of 2022. By all accounts, it looks like this is going to be a fascinating year in the market where many lessons can be learned.
Have a wonderful Friday!
The Finance Ghost
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