"The most discussed sporting event in the history of Twitter. This is quite a feat, as per the Twitter website, in the Twitter usage stats there are only 255 million active monthly users sending 500 million tweets a day. Roughly two a day per monthly active user. What is also interesting is that 78 percent of all users are on a mobile device and 77 percent of all accounts are outside of the US. Twitter is truly global, supporting over 35 languages. How old is Twitter? 7 years, two months, 20 days. As of today. Or a mere 376 weeks."
To market, to market to buy a fat pig. Whoa. Stand back from that screen. The semi final was too late for me last evening, I am an early riser and need some sleep, I am neither Thatcher nor Smuts, both of whom needed little sleep, three to four hours. In the business world there are folks like Indra Nooyi, Marissa Mayer, Jack Dorsey and even Thomas Edison, Benjamin Franklin as well as Nikola Tesla who needed very little sleep. Those folks fall into an elite crowd that are a low single digit part of the overall population that can function on next to nothing. As far as sleep is concerned.
It does have pitfalls however, Marissa Mayer is known for her having pushed 130 hour work weeks, leaving 38 hours to be spread out over seven days for sleeping and down time. Less than five and a half hours per seven days in a week. Sounds nuts. In my opinion, you can pay those people what you want, because there is no life outside of their jobs. Their jobs are their lives. Perhaps it is catching up with her, the other day there was a WSJ article on How Marissa Mayer Fell Asleep and Kept Ad Executives Waiting For Hours. Well. Perhaps she had fallen asleep.
Quickly back to the poor humiliation of the host nation and the giant success of the German team, Twitter set a new record last evening, check it out, Brazil vs. Germany:
With 35.6 million Tweets, #BRA v #GER is the most-discussed single sports game ever on Twitter. #WorldCup pic.twitter.com/pRjssAZmhg
— Twitter Data (@TwitterData) July 9, 2014
There you go. The most discussed sporting event in the history of Twitter. This is quite a feat, as per the Twitter website, in the Twitter usage stats there are only 255 million active monthly users sending 500 million tweets a day. Roughly two a day per monthly active user. What is also interesting is that 78 percent of all users on a mobile device and 77 percent of all accounts are outside of the US. Twitter is truly global, supporting over 35 languages. How old is Twitter? 7 years, two months, 20 days. As of today. Or a mere 376 weeks. And last evening, one football game of 90 minutes generated that many tweets. This business might be in startup phase, but I agree with < href="https://about.twitter.com/company/leadership#dickc">Dick Costolo, the CEO who said: "Once you get it, it becomes indispensable to you".
Not getting it were equity markets yesterday, the Jozi all share was down just over half a percent yesterday, worse still it was bye-bye 17 thousand for the Dow Jones, falling over 100 points. Of course 100 points either way on the Dow Jones is not what it used to be, 100 points was more when the index was around half of this. The broader market S&P 500 was down nearly 14 points, or 0.7 percent to close at 1963.71.
I liked this post with a whole host of graphs about US household debt, from Scott Grannis on his blog The Calafia Beach Pundit. The piece is titled Good news: risk aversion is declining. It shows a massive fall in US households leverage, it shows mortgage and consumer debt as a percentage payments of disposable income being lower than at any time in the past 35 years, it shows that consumer delinquency rates on credit cards and consumer loans as the lowest point in nearly 25 years. It shows the credit card outstanding balances are at their lowest point in over a decade. It shows that excess bank reserves and adjusted bank reserves are at all time highs.
All I ever hear is how the Fed have inflated their own balance sheet. Meanwhile, as per the WSJ: Currency Reserves Swell in Asia. The graph at the front end is all that you have to look at. Asian central banks foreign currency reserves nearly topped 7.5 trillion Dollars at the end of June 2014. The rest of the world is 4.4 trillion dollars, as at the end of June. The total for all Asian and the rest of the rest of the world back in 2003 was around 3 trillion Dollars.
Of course none of these will be pointed out. It is much more easier and more explosive to talk about the absolute debt levels (even though to GDP it is less of a problem), possible debt defaults from Greece, credit ratings downgrades for the US, or France or the Eurozone falling apart. Keep calm, asset prices (the ones that we are interested in, equities) fall and rise as a function of earnings, sometimes they are cheaper, sometimes they are more expensive. What you cannot replicate easily (much like natural beauty) is quality. Quality of the business you own, the quality of the earnings from those businesses and knowing that your investment is being run well. A safe pair of hands.
Just quickly then, Alcoa, which used to be more important and more anticipated as a business releasing their quarterly numbers as a Dow Jones component, delivered to the market last evening. Why were they more important back then and not now? Well, I guess with Alcoa having been a former Dow Jones Industrial Average constituent, it was supposed to be a reflection of industrial USA. Now whilst they might be the third largest aluminium producer on the planet, perhaps the produced products are not as important to the US as Visa or Nike is today. Remaining relevant is part of being in the Dow Jones Industrial, even though through the 53 changes (in nearly 130 years) there are 84 former components, that is not really bad.
If I remember right, Benjamin Graham said that this company would never be one that you could own. Too cyclical. Too reliant on factors completely beyond your control. As a business so very necessary. They are wanting to position themselves as a leading provider of lightweight metals to the aerospace and automotive industry. Making those more fuel efficient. Which is important for airline companies and automobile manufacturing. Both of which I do not think are very good investments either. So whilst we need all these products and they are essential to every day life, that does not quite mean they make for good investments!
All that I can say about Alcoa is that I am thrilled that they have released their results. Not because I care at all about their business, I know that sounds mean. BUT!! This is my favourite season, four times a year we get to hear how corporates are doing, what their short terms prospects are and very short term earnings outlook.
Michael's musings
My blog piece this morning comes from two themes that have been going around the media in one form or another.
Starting with a fairly negative theme is the dual economy that South Africa has. There are those who have up skilled themselves and those who haven't; by their own fault or not. The world is moving toward a more skilled labour force, meaning if you are unskilled the number of jobs that you can do are getting less, lower demand for unskilled people also means that the wages that go along with them won't be very high.
This morning I read a news article where NUMSA have told the car manufacturing companies that they can "Go ahead and leave" because they will not have that gun held to their heads during negotiations. The car manufacturers are saying there are too many disruptions to manufacturing to justify having plants here, being global players they have the means to manufacture anywhere in the world. According to GM they directly employ 30 000 people and indirectly 20 000 people, jobs that our country desperately need.
I have my own views on what needs to be done, and the reason why we are in this situation, but where we are now is fact and it is not going to be easy to fix the problem, it won't happen overnight and sacrifices will have to be made now so that future generations live in a better South Africa.
My next observation is a drum that Sasha beats many times a week, "Stay calm and keep investing".
An article that I read on Bloomberg put things nicely into perspective. A Correction Is Coming
"Corrections are a normal part of any market cycle: Every market has regular pullbacks and consolidations. Since the market made its lows in March 2009, it has had nine corrections from more than 6 percent to almost 22 percent, beginning with a 9.1 percent decline five years to the day from tomorrow."
The point is that even if you had invested at the top of the 22% correction you are still up today. Painful to watch the short term price of your stock fall but with a long term view on stocks it gets easier. Adding money regularly to an investment account also allows you to take advantage of lower asset prices. We cannot forecast what will happen tomorrow, but history has shown that owning and adding to quality stocks give solid long term returns.
"Stay calm and keep investing".
Home again, home again, jiggety-jog. Markets are lower here again, I think it is three or four days in a row. What a disaster. But not really. As I said, earnings season is upon us, this is the real reason markets move ultimately, as a result of earnings.
Sasha Naryshkine, Byron Lotter and Michael Treherne
Follow Sasha, Byron and Michael on Twitter
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