PDSNET ARTICLES
Year-end Overview
The Rand 2025 has been a year of solid progress for South Africa. The government of national unity (GNU) has held together despite dire predictions and the country has implemented a number of notable economic reforms. At the same time, international investment sentiment has shifted firmly towards “risk-on” and the US dollar has lost significant ground against other first-world currencies. The effect of these develo...
The Demise of Bitcoin
Why is the Bitcoin price falling when the price of gold is rising?Cryptocurrency doyens always claim that Cryptos are somehow a hedge against the impending weakness of paper assets – and especially the US dollar. But our observation is that Bitcoin is more of a risk-on asset than a risk-off asset. When risk-averse investors run for cover, they don’t switch to Bitcoin. Rather they switch out of Bitcoin and into gold...
The Collapse of the Dollar
The currency of a country is like the shares of a company. If a company is expected to do well and make profits, then its shares will rise and vice versa. The same is true of a currency. If the country’s economy is expected to do well and create strong growth, then its currency will appreciate against the currencies of other countries – and vice versa. The problem is, of course, that because the US dollar (US$) is ...
Gold Fields
For the past month, the US dollar price of gold has once again encountered some resistance – this time at around $4000. Despite this, in our view, the gold price is in a strong upward trend which should continue. One of the major factors is the steady decline in the US dollar value against a trade-weighted basket of currencies, but the main reason for the upward trend in gold is that large international investors and cen...
Top Winning Shares
Last Thursday, the JSE reached a new all-time record high of 114046. This, combined with the fact that the rand went below R17 to the US dollar for the first time since the beginning of 2023 suggests that emerging market investors are increasingly bullish. Consider the chart: The chart shows the effect of Trump’s Liberation Day announcement on 2nd April 2025 and the low point that followed. Since then, the JSE has recove...
Overview - 10th November 2025
Wall Street Two weeks ago we suggested in an article that a stock market bubble was developing in AI and predicted that a significant correction was imminent. We repeated that view in the Confidential Report published on Wednesday, 5-11-25 last week [link]. The S&P500 index is now in the midst of another mini-correction which has already taken it down 2.5%. That is about average for the mini-corrections that we have seen o...
Bubble
Last Friday the S&P500 reached another new all-time record high, closing at 6791 and reaching a new intra-day record high of 6807. This is obviously an exciting time for private investors, but with each new record high the systematic risk of a bear trend or crash increases. Consider the chart: Investors all over the world are committing rising amounts of capital to AI and in our view, there is a danger of substantial over-...
The PEG Ratio
Since the government of national unity (GNU) came into power in June 2024, there has been a definite improvement in the South African economy. Perhaps the improvement is not as dramatic as some people were expecting, but the progress cannot be denied. Possibly the best indicator of that is the 28% rise in the JSE Banking index which, before the GNU had been moving sideways for the previous two years. Banks are generally not ve...
Rare Earth Elements
Investors worldwide had been of the opinion that Trump’s ability to impact markets was on the decline. His erratic, on-again, off again tariff policies had either disappeared or had been mostly discounted into share prices. His attack on the second largest economy in the world, China, seemed to have been largely resolved, and a meeting with Xi Jinping was planned. After the sharp V-bottom lasting 4 months from February t...
US Shutdown
There has been much in the media recently about the US government shutdown and the fear among investors that it might begin to affect the stock market, depending on how long it lasts. A shutdown occurs when the US government reaches its budget limit and requires a bill to be passed through both Houses to extend the government’s spending limits. Shutdowns typically happen in October because the government’s fiscal y...
New Listings
Two new companies, ASP Isotopes and Greencoat Renewables, have recently come to the JSE. Both are developing companies that have recently made losses and have been funding those losses by raising capital and selling assets. They both have substantial “blue sky” potential but also carry substantial investment risk. This is probably truer of ASP Isotopes than Greencoat Renewables. In our view they both represent oppo...
Exponential Growth
The S&P 500 index is important because all the stock markets around the world tend to follow it. If the S&P is in a bull trend then London, Tokyo and the JSE will also be in a bull trend – and vice versa. The S&P500 index began 68 years ago on 4 th March 1957 with an initial value of 43,73. It took nearly 41 years for it to reach 1000 (3rd of February 1998) and another 16 years to get to 2000 (29th of A...
The US Jobs Market
International investors who trade on Wall Street are generally negative about any good news from the economy because it tends to make the monetary policy committee (MPC) more hawkish and less likely to reduce interest rates. The opposite is also true. But there comes a point where bad news is so bad that investors begin to fear that the US economy is heading into a recession. On Friday last week the US Monthly Jobs Report ...
Jackson Hole
Once a year in late August central bankers and academics congregate in Jackson Hole to discuss the state of the economy and consider the way forward. Traditionally, the Chair of the Federal Reserve Bank (“the Fed”) addresses the meeting and gives direction to its thinking on monetary policy in the US. This year, the comments of Jerome Powell resulted in the S&P500 index rising 1,5% on the day. The work of a cou...
Choppies
Choppies is a supermarket chain which operates in Botswana, Namibia and Zambia. It is listed both on the Johannesburg Stock Exchange (JSE) and on the Botswana Stock Exchange (BSE). Notably, the company has resisted the temptation to re-enter the highly competitive and cut-throat retail market in South Africa, having exited that market in 2020 due to sustained losses. Despite this, Choppies is the largest grocery retailer in So...
Gold Resistance
All investments throughout the world can be ranked on a scale from high risk to low risk. As a general rule, in the world of investment, risk and return rise together. In other words, as the risks in an investment increase, so does the return necessary to attract investors. At the one end of the scale there are very low risk investments like US Treasury Bills which offer a very low return but are seen as being very secure - an...
Sibanye takes off
We have been writing about Neal Froneman and Sibanye for years now. Beginning in 2013, Froneman assembled the Sibanye group over a period of 7 years, buying up mining operations both in South Africa and America at bargain prices. Initially he bought precious metals producers, but more recently he has been diversifying into base metals like zinc and lithium which are benefiting from the surge in solar power installation worldwi...
The 16 Year Bull Trend
Since the Second World War, the stock markets of the world, including the JSE, have always tended to follow the New York Stock Exchange (NYSE) - and the NYSE is best measured by the S&P500 index (S&P) of its 500 largest companies. For this reason, we believe it is important for private investors to constantly watch the S&P closely to determine whether it is in a bull or a bear trend. In our view, the S&P has be...
CA Sales Revisited
Retailing in Africa is difficult with many of our leading retailers having attempted to open stores in countries to the North of us without notable success. These countries are often unstable and volatile politically. Getting adequate stock to branches has proved problematic and expensive. It is not surprising therefore that a company has been formed which specialises in selling and marketing fast moving consumer goods (FMCG) ...
Bluetel
Bluetel (BLU) is a company involved in pinless top-ups, prepaid electricity, ticketing and universal vouchers. As such it is a company with substantial repeat business from existing customers. This type of business model is attractive to investors because it implies minimal working capital and strong cash flows. Bluetel’s purchase nearly 8 years ago of a 45% stake Cell-C on the 2nd of August 2017 for R5,5bn increased the...