Category Archives: Market Reports

The Confidential Report – August 2017


One of the great advantages of the internet and the exchange of ideas is that almost every human problem, from how to set up a fish tank in your lounge to how to frame a new Companies Act for the country, has been debated endlessly and the best methods are by now well-known. Nobody needs to work things out by trial and error or from first principles any more. The best way to do it, whatever it is, is already known and freely available on the internet. Read More

The Confidential Report – July 2017


When you buy a share, you are in the business of predicting the future. You are saying, “I am buying this share because I expect it to go up”. The accuracy or otherwise of your prediction will determine whether your investment is profitable or not. And the only way to predict the future is to study the past. There is no other way. The only reason that you know that the sun will rise tomorrow is because you have seen it happen before. If you did not have that experience, you would not be able to make that prediction with any confidence. It would simply be a guess. Forecasting is not an exact science. Predictions can never be certainties. Indeed, investment is not about certainties – it is about probabilities. A sound investment is one which has a better than 50% probability of going up. Any probability less than that is a gamble where the odds are stacked against you. Read More

The Confidential Report – June 2017


The successive new record highs on Wall Street since last month have motivated us to set down our underlying philosophy and understanding of where the stock markets of the world are right now, in the context of where they have been in the past. We believe that, without the framework that we set out here, it is difficult to make sense out of what is happening in the markets day to day.

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The Confidential Report – May 2017


Political

The president has delivered a shattering blow to the South African economy, just as the economy was beginning to show definite signs of renewed optimism at the start of 2017. South African consumers may have been frightened into “pulling their heads back into their shells”. When consumers and businesses are scared, they typically stop spending and conserve cash to cope with whatever the new uncertainties may occur. This tends to reduce the sales of white goods and big ticket items like motor vehicles. It results in major investment projects being curtailed or abandoned and it results in consumers “trading down” to cheaper products. Economists and analysts have had to modify their forecasts downwards to reflect the new somber mood.

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