To market to market to buy a fat pig. Ladies and gentlemen, the date has finally arrived. I'm talking about Apple's new product launch conference, which has been scheduled for two weeks from today on the 12 September. As an Apple shareholder, it will be a rather big day, part of the reason the stock is up 40% this year is due to the expectations around the iPhone 8. As a consumer, it is exciting to see what new features and products their engineers have come up with. The rumour mill has it that Apple will unveil the third generation of Apple Watch, which will have space for a sim card so that the phone and watch are not as dependent on each other. There will probably also be operating system upgrades, making your current Apple products feel like new products again.
New York, New York was very quiet yesterday which was unexpected given that large parts of Texas are under water due to hurricane Harvey. At last count 10 oil refineries have stopped refining and around a quarter of the oil production in the Gulf of Mexico has been suspended. Your first instinct is that oil prices would climb on these developments, not so, WTI crude was down 2.4% yesterday. It seems that due to refinancers not producing, there is a lower demand for oil but at the other end of the production process, "gas"/petrol prices in the US are at two-year highs due to the lower petrol production. Then there are all the insurance claims and insurers needing to raise the money to cover those claims. One of the ways insurers raise funds is through sales of equity holdings Here is the scorecard, the Dow was down 0.02%, the S&P 500 was up 0.05% and the Nasdaq was up 0.28%.
Locally our market mostly bobbed between red and green yesterday, at closing bell we were down 0.18%. Woolies had another red day, down another 3%, bringing the total drop since results to a loss of slightly more than 8%. On the positive front though, Aspen has strung a couple green days together to be up 7% over the last 5 trading days, eyeing that R300 a share mark.
How much is a CEO worth? Well Uber look set to pay around $200 million to their new CEO, Dara Khosrowshahi, just to compensate him for the stock options he will lose at Expedia when he leaves, Uber's New CEO May Get at Least $200 Million to Exit Expedia. That amount is before they have even spoken about salary. Remember that Uber is a private company, so the current shareholders are very involved in who the next CEO is and what to pay him. I suppose, if the right CEO gets the company from burning $600 million every three months to cash flow break even quicker than expected, $200 million is well worth it?
Expedia stock was down 4.5% yesterday on the news, showing how highly rated Dara Khosrowshahi is. Quickly picture things from Expedia's point of view. Dara was the main driving force in creating Expedia, so the board and shareholders wanted to keep him around for the foreseeable future. To do that they gave him long dated stock options worth $190 million (a cool R2.5 billion). I wonder if the board is now thinking they should have given him even more options, to make Dara unaffordable for Uber? The mind boggles that R2.5 billion golden handcuffs weren't 'golden enough'.
Linkfest, lap it up
One thing, from Paul
Here at Vestact we like to remind clients that the stockmarket is a very efficient form of investing compared to fixed property (like houses and small commercial buildings). Trades on major bourses like the Johannesburg Stock Exchange (JSE) and New York Stock Exchange (NYSE) are effected immediately, guaranteed and settle after a few days.
Compare that to the ludicrous run around when doing a property sale. After estate agents' fees, bank homeloan dramas, deeds office mess ups, conveyancing attorneys mistakes and the massive transfer duties payable, property transactions take months! A significant number of sales simply fall through.
So I was pleased to see that the New York market settlement time (from trade to cash payout on a sale) will shortly move from three days down to two - SEC Adopts T+2 Settlement Cycle for Securities Transactions
That's referred to as T+2 in settlement terminology. Here in Johannesburg we are on T+3.
Michael's Musings
Amazon haven't wasted any time stamping their style onto Whole Foods, not even a day passed from purchase to changes! - Amazon just made shopping at Whole Foods cheaper - here's exactly how much you'll save on each item. Some of these price cuts are significant.
Barry Ritholz has some good advice for the new lottery winner. Even though you didn't just win over $700 million, his advice is applicable to wealth management in general - How to Deal With a $759 Million Lottery Jackpot. "The odds of winning were long; so are the odds of keeping those winnings."
If bribery is a 'normal' part of daily life, is it still wrong? Imagine doing business where you need to bribe someone to get your electricity connected on time and then bribe someone else to get a drivers license - Nigeria's first ever corruption survey is as bad as most people imagined
Byron's Beats
Many businesses are worried about Amazon eating their lunch. They even have a word for it, the Amazonification of things. As a brick and mortar retailer you are right in the firing line but now it seems even the banks are under threat. As this article titled Amazon is a threat to banks suggests, it's not just the obvious avenues such as credit card processing and trade financing. It is the fact that youngsters identify with brands such as Amazon a lot more than they do the banks. I am very interested to see how Discovery roll out their banking operations in light of all the new technologies available.
Home again, home again, jiggety-jog. Asian markets are all in the red this morning, thanks to North Korea firing a missile over Japan. For Gold bugs, this increased risk of war means that gold broke the $1300 mark for the first time this year. Thanks to a higher gold price, gold miners are flying this morning. Key data out later today is a consumer confidence read out of the US.
Sent to you by Team Vestact.
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