PDSnet Articles

Choosing Winning Shares


The problem which every private investor faces is that there are more than 400 different companies listed on the JSE. How can you choose those shares which are likely to be winners?

The old Wall Street adage goes, “Pick shares which are rising, in sectors which are rising and in markets which are rising”.

Of course, the problem with this idea is that it is likely to cause you to buy shares which already appear to be very fully-priced. The point that you need to get hold of is that shares which are very fully-priced often become even more fully-priced because they are extremely well-managed or have some kind of powerful business edge. A good example of this would be Capitec Bank – which is trading on a P:E which is nearly double that of the other banking shares, but which nonetheless continues to rise – excellent management and a powerful business edge. Read More

Picking Winners – Orion Minerals


One of the private investor’s biggest problems is selecting the right share. Out of the 400-odd shares listed on the JSE, how can you find those which will perform better – especially those which can offer a good capital gain?

Obviously, there are many different methods of finding winning shares, but the purpose of this article is to draw your attention to just one method which you may not have considered – looking at shares which are making new highs. A new high for a newly listed company is defined by the highest price since it was listed. For a share which has been listed for some time, it is defined as the highest price in the last six months. Read More

The Confidential Report – November 2017


Economy

Mr. Gigaba’s mini-budget was worse than most people expected. It revealed a massive R51bn shortfall in tax collections – due partly to the lower-than-expected growth rate of the economy, but made far worse by the need to inject funds into state owned enterprises (SOE) and the fact that tax collections have been less effective. The worst of the SOEs by a long shot is Eskom where the government has guaranteed just over R200bn. Eskom has been racked with accusations of corruption and state capture which has made the lenders of these funds nervous. They have now insisted that the government appoint a new credible board of directors for Eskom by this month – or they will not be willing to roll over their loans. The same is being said of other SOEs like Denel, SAA, the Post Office and the Trans Caledon Tunnel Authority (which has nearly R26bn of loans guaranteed). Clearly, after a protracted period of fleecing, these SOEs are being forced to adopt a much more business-like approach. To finance the shortfall, Gigaba cannot just print the money (Mugabe-style) because he does not control the Reserve Bank. He is being forced to privatise – beginning with the sale of the government’s stake in Telkom. This is ironical because privatisation has been a very unpopular word in the ANC since it took power. But the reality of the situation is forcing them to do what should probably have been done years ago. And we can still look forward to an increase in taxes in February 2018 – probably a jump in VAT to 16% or 17%. Fitch has expressed in no uncertain terms that SA will be downgraded on 24th November – and the rand has responded accordingly. This probably puts paid to any pre-Christmas cut in interest rates. Read More