"Robots work around the clock, stopping only to recharge their batteries, and I don't mean that figuratively. Of course robots do not have as much fun as humans, we enjoy the finer things in life, good food, good drink, nice "things". Keep them away from those, OK? Mind you, your Kenwood blender tastes your delicious smoothie every morning and it still has not figured out a way to get off the machine underneath."
To market, to market to buy a fat pig. It was a tough old day for equities and in particular the resource stocks. Once again as Bill Murray would say in Groundhog day. Had we stuck to levels seen at the open however, it could have been a whole lot worse, we came back during the course of the day, comfortably off the worst levels, you would however have not thought that looking at the scoreboard. A three percent draw down in resources as a collective (now down 16 percent for the year) was worse than the broader market, which registered a 2.11 percent fall, now comfortably below the 50 thousand mark. As bad as it was, the closing level (down over 1000 points on the day) was nearly 800 points off the worst. The gold and oil prices started to recover in the afternoon, divergent views, some "seeing" an oil price at around 35 Dollars a barrel, some "seeing" a quicker than anticipated recovery to 80 Dollars a barrel. The truth is, as I read somewhere, nobody really knows.
The demand side might have weakened somewhat, it is the supply side that has led to this current rout. Amidst this global oil price rout and general commodities bashing, the police in Hong Kong have taken it upon themselves to clear the areas of the protestors. The chief executive of Hong Kong (the reason for the folks protesting in the first place) suggested that the students need not return. See this NYT article about the police having the upper hand now, it is not clear if there is any winner in all of this: Police Break Siege of Government Offices in Hong Kong.
Across the oceans and far away, stocks fell on what looked like average Black Friday sales, Cyber Monday sales were not in yet of course. Amazon.com had extended their Cyber Monday deals from the Saturday after black Friday for a week. I did see one of the chaps that I follow on Twitter suggest that nothing was sacred after this. Of course, like much of Twitter, people were trying to make folks laugh. Talking of Black Friday sales, much of my Twitter stream suggested that those were not the real Black Friday sales, the ones that were being reported. Why bother then, or are people just in the mood to extend their purchases over the next week or so and to look for the best possible deals.
For the scoreboard checkers, the Dow closed off just over one quarter of a percent, the S&P 500 lost just over two-thirds of a percent, whilst Apple dragged the nerds of NASDAQ lower, down one and a third percent, Apple off three and one third. It wasn't just Apple, loads of tech stocks sold off, Alibaba sold off five percent, Amazon.com fell nearly four percent as their paper was downgraded, or was it sales looking average. It was intriguing to see again the extent of the power of the robots in the Amazon warehouses, there were cameras from both of the big networks on the floor.
We had seen them a while ago on YouTube, the new warehouse that is, I found an old Amazon YouTube channel piece. There were these robots wandering around (as robots do) carrying (as robots do) your goods from one place to another. Read this and prepare to be blown away, a business that Amazon bought is at the heart of their warehouses, or as they like to call them (as per the article) fulfilment centres: Amazon Reveals the Robots at the Heart of Its Epic Cyber Monday Operation. Robots work around the clock, stopping only to recharge their batteries, and I don't mean that figuratively. Of course robots do not have as much fun as humans, we enjoy the finer things in life, good food, good drink, nice "things". Keep them away from those, OK? Mind you, your Kenwood blender tastes your delicious smoothie every morning and it still has not figured out a way to get off the machine underneath.
Check out the nice graphics and pieces from Cisco, to get a better idea of what the Internet of Everything entails. Cisco suggests that this is a 19 trillion Dollar market, each and every manmade item connecting to the internet, thereby increasing productivity, saving serious costs as well as unfortunately heightened automation. Which means less jobs that require little thinking. Germany and Japan are at the forefront of the Internet of Things, according to Cisco, it makes sense that engineers from those countries would adopt newer technologies quicker than their peers globally. Financial services and high tech & telecommunications are the leading industries. Still confused as to what is going on?
Here is a short description: "Internet of Everything (IoE): The Internet of Everything is the networked connection of people, data, process and things. The IoE is made up of many technology transitions, including the Internet of Things." Ha ha, it still takes some thinking! Don't worry: "Internet of Things (IoT): The Internet of Things (IoT) is the networked connection of physical objects. IoT is one of many technology transitions that enable the IoE." The internet that links all the physical objects to one another, imagine for a second turning your heater or zircon on at home over the internet, before you got home, it should not be that hard.
Company corner snippets
Always an opportunity for someone, this time it is Assmang not meeting certain conditions by a certain date with regards to an announcement made by African Rainbow Minerals and Assore at the end of April this year. The original announcement was for those two, ARM and Assore to take a 19.9 percent stake in a soon to be listed AIM business, IronRidge. IronRidge is an Aussie company, to be listed on the London Alternative Exchange (small caps mostly) with three iron ore prospecting licences in Gabon. Yes. ARM must have been spooked by the lower iron ore prices (I don't blame them), but Assore have decided to inject 6.98 million Pounds in return for a holding of between 26.7 to 30.3 percent stake in IronRidge. Phew, that is certainly taking a risk, the SENS continues: "The board of directors of Assore, however, believes in the long-term potential of IronRidge. Assore's interest in the company offers it exposure to some of West Africa's most promising iron ore opportunities and could facilitate Assore's long-term access to high grade iron ore with competitive capital and operating costs." 6.98 million Pounds = 121 million Rand = 0.5 percent of their market cap. Small.
Curro stands still for nobody. The independently listed schools business have acquired St Dominic's in Newcastle for an undisclosed sum, the school is all of 123 years old. The company is now half way to their 80 school target by 2020, currently they are at 41, so less than 7 schools a year from here. Curro are going to inject some money into the school, raising the pupil numbers by 340 to 900 eventually. They will build a heated pool, have an Astro Turf and other sports facilities. Going like gangbusters. Michael attended a Free Market Foundation speech by Loane Sharpe the other day and Loane had said that the cheaper private school enrolments last year had increased 27 odd percent (somewhere around there) and government enrolment down 6 percent. Parents are voting with their feet. Remembering that in 2013 (from a Curro results presentation) that only 4 percent of overall pupils attend private institutions. And of those folks attending those schools, around 5 percent of them attend private schools owned by Curro, there is certainly HUGE room for growth.
Things we are reading and we think you should be too
Each country has its own competitive advantage and competes with other countries for investment - Cheap energy is the new cheap labour. The lower energy prices have changed the dynamics again, at least for the short term. It is interesting to see the impact that "interfering" by the EU is having on their economies.
India looks like the new big battle ground for the e-commerce industry - Alibaba chief Jack Ma ready for bigger play in India's e-commerce industry
Following on from the top of the blog - Amazon's new robot army is ready to ship. The new robots allow Amazon to deliver faster and to have more stock in their warehouses.
An update from one of our favourite tech company's - Google Glass will return in 2015 with Intel inside, says WSJ. The Google Glass has not been a major hit yet but I think as they become smaller and more powerful adoption will pick up.
Reflecting the suns light may not be very practical and cost effective at the moment - A cool idea. Making our buildings smarter and greener is where things are heading and it is very likely that a derivative of this technology will form part of future buildings.
Home again, home again, jiggety-jog. There is a significant bounce here this morning, from the same stocks that have been crushed lately, the resources stocks. We are up over a percent to start with!
Sasha Naryshkine, Byron Lotter and Michael Treherne
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