To market, to market to buy a fat pig. We closed lower here yesterday, with markets running out of steam through the session. There was a very decent February ADP National Employment Report, which registered nearly 200 thousand jobs, and the January jobs number was raised by 23 thousand, sending the US futures much higher through the afternoon. And in fact those markets closed lower than their early and late session highs, the last hour saw a bit of a sell off. Hey, how am I to know what people with a few hours time frames are thinking. I guess however those are new closing highs for the Dow Jones, and the S&P 500 continues to creep higher.
I am amazed and perhaps it is just the landscape right now where folks are less anxious. Even though the political situation in Italy is still less clear, but that seems like a distant memory now. What is closer to home is the news of AMCU having seemingly wrestled away control of mine workers across much of the platinum mines, the numbers are eye popping. Check out this Miningmx story from yesterday afternoon: Amcu seals place as top dog platinum union. The suggestion is that AMCU might have as many 150 to 200 thousand members. I am presuming that those members used to be NUM members. Imagine what that does to expected revenues. Wow.
On the local front today we have the announcement that Jacko Maree is handing the reins over at Standard Bank to Sim Tshabalala and Ben Kruger. Two? Sim is 45 years old, in fact OLDER than when Jacko took over, whilst Ben is 53. Why? Is the business that complex that the two need to separate their duties? Is running a big and complex outfit like this deserving of the time of two quality guys like this? Surely if someone like Jamie Dimon can run a big and complex bank like JP Morgan, this could and should be easier? Perhaps the board were at loggerheads as to who to appoint? Maybe that is exactly it, and decided that this is the best solution in the short to medium term. Those two know each other well, Sim and Ben. Sim will run the African business and the groups wealth business, with Simon Ridley being his right hand man, whilst Ben will run Personal & business banking and Corporate & Investment Banking. And risk. Peter Wharton-Hood will report to Ben.
Decent enough results, a record in fact, in part due to the realisation of the sale of their Argentinean division to their (Standard Bank groups) biggest shareholder ICBC. ICBC is of course the worlds biggest bank, the Chinese bank that bought a 20 percent stake back late in 2007. Their purchase price has never been breached, ever. An 11.11 percent was bought at a 30 percent premium back then, at 136 Rands from ordinary shareholders. The other amount was issued by the company to ICBC at 104.58 (I think), giving them a total purchase consideration of just above 120 ZAR. The all time high is around that price, 120.30 ZAR. But I suspect that whilst ICBC might have been irritated, they would be mindful that there was a big drawdown which they have come through relatively unscathed in this investment, and I presume that their time horizon is around 20 years, minimum. In the fullness of time it will turn out to be a "good one".
Journalism is alive and kicking. I suspect that the internet meant that many people who were not allowed to be published, as their letters to the editor were filed in "number 13" use the internet rather. And of course if needs be, the commentary part of the major publications. The two examples of online publications having properly monetized their content is the Financial Times of London and the Wall Street Journal. And I guess Bloomberg as well, but their business is a lot more specialized. And of course really profitable for Mayor Bloomberg. But what do you make of Time Warner Spinning Off Time Inc. ? All the magazines alone, would you buy those as an investment? I suppose the fact that we view news as one day old as being way too old has perhaps something to do with this. So magazines are going to have to change their strategies, of course you can still buy many of them via applications on your tablet, so their market is still there. The price on the tablet is discounted however.
Is it that people are lazy, and prefer to find all their content on the TV? And if they are not lazy, they find multiple stories from multiple websites and blog posts, is that it? The numbers for Time Inc. are not great, net income down 25 percent on revenue that was down 7 percent. Yowsers. And they have even increased advertising market share. Sadly we might be seeing the slow motion decline of an industry as speedier and easier to consume information finds its way to the users. But yet, but yet....... I see people starting magazines. The 90th anniversary of the first Time was 4 days ago. How times have changed. Could you really compare the magazine to the horse and buggy 100 plus years ago?
To end, perhaps a tweet, which Paul pointed out, from one of our favourite guys, Josh Brown, who tweets as the @ReformedBroker: "I want to read your 3000-word piece on the Death of Long-Form Journalism, is it available as a tweet?" Yip, exactly. We have changed how we consume media. In short bursts. Not long winded information that is old by the "time" it finds its way to your post box, provided that the folks are not on strike. People used to want to be on the cover. There was the person of the year. Those were the days my friends, I thought that they would never end.
I know that locally people loved that guy, Hugo Chavez. He was seen as a champion of the poor. Ironically though he stoked inflation, the very thing that eats away at the poor's spending power. The poor and lower income groups spend a much bigger percentage of their income on food. Transport, well, that was completely subsidized. But, as I said this morning in a short tweet, referring to this link, failed economic policies led to the man's legacy as a champion of inflation: Hugo Chavez's economic legacy – the two graph version. Forget the underperforming GDP relative to Venezuela's peers, inflation rocketed by 200 fold from 1999. What? Amazing. That did more bad than anything else.
Crow's nest. South African gold miners are on fire this morning, part to do with a small purchase of that Aurora asset by money, mostly from a Chinese investor, Superb Gold Ltd. Superb Gold in turn is "affiliated" to the following crowd: SSC Mandarin Group. Although this is old news essentially, the deal has come good. On their website (SCC Mandarin Group) it lists GoldFields and Kumba Iron Ore as their customers. GoldFields, Harmony, Sibanye, AngloGold Ashanti are all roaring ahead. The Rand is also weak, very weak. Or, is it because the overhang of a silicosis action lawsuit has been directed towards Anglo American, and not the gold miners? Not too sure, these movements are so wild, it is difficult to know what is best. Anglo is going to bear the brunt of that seemingly. Not sure, really.
Sasha Naryshkine and Byron Lotter
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