Wednesday, 23 September 2015

Investor fatigue

Buy when others are selling and sell when others are buying is, on its own, about as realistic as anticipating a no-claims bonus from your insurer after employing a stop at a green light and drive-on through a red strategy. Sooner rather than later you'll get it wrong, very wrong.

100 monkeys sitting in a tree eating superficially identical fruit; half the fruit poisonous and the other half not. Underneath the tree lie the monkeys poisoned. The last monkey sitting in the tree would have guessed each fruit correctly until he doesn't. Is he smarter? Perhaps. He's just a monkey remember..

I can't recall a time when retail volumes were so thin. That's applicable across the instrument spectrum and true for most markets. Investment fatigue, a concept birthed in what has become a headlines-driven market, is very prevalent. Hedge-fund gurus of yesteryear, usually wholly reliant on their say-so to influence a  market, find little solace in the fact that the average investor just doesn't care anymore.

What Mr. Buffett really means when he says buy when others are selling and sell when others are buying is this: - buy only when you know what you're buying and sell only when you know why you're selling. If, like many others, you suffer from investment fatigue and are frustrated at consistently poor investment performance don't look to the other monkeys in the tree for guidance. The grass is not greener because it's on the other side. It's greener because it's watered. Now, more than ever, do your own homework. Accept that you won't always be right. Understand that a bad investment can stay that way regardless and do something about it.  

Wednesday, 16 September 2015

Europe's world war & a fight for ECONOMIC relevance

Speak to an educated, politically astute European and don't be surprised when he / she tells you that Europe is embroiled in a war so bitter that subsequent social divides will take generations to bridge. 

An influential colleague contends that Europe is in a fight to the death and the enemy is none other than Britain and the United States! 

Why have the Europeans been so slow to respond to the EU crisis?  It’s a function of an outdated institutional structure and cumbersome Legislative, Judicial & Administrative bodies.

These are just a few of the institutional bodies / individuals responsible for the well-being of the European Union:
  1. Ministers and parliamentary secretary generals.
  2. Commissions / Committee of regions, economic and social council-BEI (European Bank of Investments)
  3. FEOGA-(European Agricultural Guidance and Guarantee Funds).
  4. (EMCF) -European Monetary Cooperation Funds.
  5. Secretary General of the Council of Europe
  6. Parliament
  7. W.E.U (Western European Union)
  9. E.C.B (European Central Bank)
  10. O.E.E.C (Organisation for Economic Co-operation and Development)
  11. The Council of Europe
  12. NATO (North Atlantic Treaty Organisation)
  13. CSCE (Commission on Security and Cooperation in Europe)
  14. The legislative council has powers.
  15. The commissions and the legislature and the executive for the E.C.S.C. 
  16. E.I.B (European Investment Bank)
  17. E.B.R.D (European Bank for Reconstruction And Development) 
It’s understandable why Europe has responded so slowly to a deliberate, well-coordinated economic attack and why the consequences have been devastating. Germany has alluded to this fact and is demanding structural reforms.

Britain is the enemy… 

(A simple example) - Britain proposed the purchase of significantly subsidised New Zealand sheep in exchange for British-made vehicles offered cheaply. The sheep are sold to France at excessively inflated prices and the commission shared…It's open to scrutiny and is a tangible and deliberate attempt by Britain to collapse the EAGGF. 

The United States is the enemy… 

(A simple example) - European banks have been driven to the cusp of bankruptcy by a co-ordinated attack by US banks intent on creating problems where there are none in an effort to destroy the Euro. Interbank rates are open to scrutiny and confirm the intent.

Whichever way you look at it it's certainly a refreshing take on the European Crisis and perhaps an opinion we should not dismiss too lightly. 

Wednesday, 9 September 2015

The South African Rand

Somebody suggested that the South African Rand [USDZAR] would strengthen ['significantly'] in the short to medium term and as these things normally pan out I asked why. 'Significant' is subjective at best so I'll assume he mean't 'return to the mean'. His definition of 'short to medium term' was from a few weeks to a month or two. In that context then:

Here's his take -

I'm not going to prattle on about the techs. but within his parameters / definitions / time-constraints / whatever... he's likely to be correct; maybe.. Who knows?

Here's my take -

My idea of short-term is three (3) years and my understanding of 'medium' is 5 years +. Asked if the South African Rand [USDZAR] would strengthen against the cross over the term, by my definition, the answer is clearly NO; almost certainly, probably..

If investments are a balance of risk and return would you risk your return on a maybe or a probably?

Monday, 7 September 2015

Cogito ergo sum

Cogito ergo sum - I think, therefore I am. [Descartes]

Africa has lost her pride. Dehumanized, patronized, colonized, enslaved, stripped of her resources and flayed in the international trade-markets, it's a betrayal of a continent's people; a scar on the collective conscience.

Unless all Africans participate meaningfully in their domestic economies, Africa will remain the pitiful, aid-slaves of international charity.

Only the weak cannot forgive and in South Africa the outlook is no less absurd. Ethnic perversion is pervasive in leadership and manifest in the consciousness of our people. We claim our own ethnicity and turn a blind-eye to the misappropriation of the collective trust.

                  First they came for the Socialists, and I did not speak out
                  Because I was not a Socialist.
                 Then they came for the Trade Unionists, and I did not speak out
                 Because I was not a Trade Unionist.
                 Then they came for the Jews, and I did not speak out
                 Because I was not a Jew.
                 Then they came for me .... and there was no one left to speak for me. 

[Pastor Martin Niemöller on national complacency when the Nazis came to power]

Ours is a country sickened by public-incompetence. The systemic abuse of political power is premised on personal enrichment. We're a nation hijacked and held ransom by a sponsored tenderpreneur-cartel. In these conditions it's difficult to hope. Under this pall of corruption we, the South African people, all her people irrespective of tribe or ethnic-claim, remain enslaved to our exclusionary past. We say what we don't believe.

For to be free is not merely to cast off one’s chains, 
but to live in a way that respects and enhances the freedom of others.” - [Nelson Mandela]

Yes we live in sad times. In backyards some pay homage to yesterday's flag; a fluttering symbol of false-entitlement and a moral abomination. Children, born a blank canvas of hope, are khaki-trained, an armed perversion - morally flawed and a false economy premised on mistrust. Others, our young ones, flee this land, some locked-out of the formal markets, a legal penance for the sins of their fathers. More render themselves useless, mercilessly beating themselves on the cross of guilt. Those who will not bend to this whip of self-loathing are declared false-prophets; harbingers of insincerity.

We live in sad times. On gilded podiums some bask in false victory; a perverted shout for freedom 20 years past. It's a rendered, context-poor homily designed to mould the economically-disenfranchised; an army dehumanized still, made desperate in chains of poverty and a green branch, compliant against the agenda of the very few. Children, born a blank canvas of hope, are denied their rights, gather in the pock-marked streets and are forced to the begging bowl and out of the classrooms as their mentors idle under trees of despair. In the dark of night behind high walls of neighboring wealth lies a false illegal financial freedom; a theft of the collective moral conscience of a people forgotten.

These are sad times. In the backstreets of sub-urban hell some suffer a despair-dependent narcotics-induced coma. Gun-toting gangs press children, born a blank canvas of hope, into acts of violent confrontation. Fathers mourn sons dead, in cold blood and mothers become mothers, children themselves.

'When a hyena wants to eat some of its children, it first accuses them of smelling like goats' - an African proverb.

Industry is a shadow of failed planning, state-interference and poor skills' development. Parastatal jobs are an exercise of executive cronyism. Our mineral wealth is a low-skilled, low-paying extraction; an international export, at cost, and for the benefit of multinational stakeholders domiciled elsewhere. Up-skilled, value-add, commodity-processing is an international monopoly from which Africa is politely excused. Trade-deficit is an unintended import and priced at the currency-gap; rated arbitrarily by the free-market controlled for 'political risk'; an economic boon for Asian and Western surplus.

Education is mostly a logistics conundrum for the administratively incompetent. Public schools wait two-to-a-desk for books destined ultimately for the black market. Teachers, qualified at the University of No Name, claim salaries from schools they've never seen. Nurses and doctors queue at emigration for a working wage.

Law enforcement is a toy of public office where the rule of law is a yellow card of restraint rather than grounds for immediate dismissal. Yes it's true. Corruption flows richly in our veins.

Cheap labour underpins a process of exploitation. The boardroom's Eton-acolytes sign-off a 200 x [20000%] wage-gap ratio; paid in sterling, at the executive-suite, but paid in South African rand at the face; substantively absurd in productivity alone. High-fenced lands lie agriculturally dormant; home to aberrant game for the trophy-pleasure of foreign dignitaries, owned and hosted by absentee lords of the manor.

Here 1:3 people persist on - $1.25 pppd; 40000 days equivalent to hunt a cage-bred lion.

In our streets indebted graduates beg a meal; engineers, mostly; denied their place by transitory Asian construction-gangs, hired on a secret handshake or at the logging-table. Elsewhere Asian-dumped steel, forged from African ore, risks 30000 jobs at the local smelter. Downstream energy-costs treble on 'generators' down'; a catch-all for 'unscheduled  maintenance'.

Our economic prognosis is terminal. It's a lethal cocktail of complacency, incompetence and corruption. Unemployment is rising at rates unprecedented in any other comparable, middle-income, developing economy. Labour-market restrictions are tightening. Inefficiencies and falling productivity is pervasive throughout the manufacturing, mining and agricultural sectors. Labour Unions, the current voting base, are more militant, less approachable. In the public sector salaries rise at levels 10 x the inflation-rate whilst 1:3 live below the international poverty-line. Trade & budget deficits are unsustainable. Domestic / foreign capital flight is real; without restraint.

An inherited infrastructure belies a political indifference to the needs of the unemployed. Political priorities / agendas are largely premised on accumulation rather than selfless service. Social grants are predicated on growth rates currently / inevitably unattainable. The debt-trap is unavoidable. These are dangerous times.

Africa stands cap-in-hand, pliant and open for renewed, unprecedented levels of exploitation; a co-authored misery and an inevitable harvesting of resources from which we can never return. It's a future bereft of dignity. The incumbent leadership-structure pays homage to the self-styled African Emperor, an Eastern phoenix. It's a morally-defunct empire of intimidation - by design; and predicated on the silence of the voiceless and perpetuated by state-corruption, national complacency and our tolerance for incompetence.