ARTICLES

2020 Prediction

Predicting what will happen on the JSE in 2020 is immensely difficult. There are many variables, each of which is complex in its own right. However, some things appear reasonably clear to us. They are:

• The dominant prediction for 2020 is that Wall Street will continue on its upward journey with the S&P500 breaking a series of new highs during the year. In this process it will go through at least one major correction – which is already probably overdue – and that will represent a buying opportunity. This prediction is based on our perception that the US economy will continue to grow strongly and with it the world economy. This growth is driven by the massive quantitative easing and monetary policy stimulation of the past decade. We do not see any significant recession occurring in the US or elsewhere during 2020. If anything, the pace of economic growth will probably become more widespread and stronger. The great bull market, now in its tenth year, is showing no signs of slowing down. Bearish commentators are consistently being proven wrong to the point where few are willing to stake their reputation on calling the top.

S&P500 Index 2009 to 2020 - Chart by ShareFriend Pro

• The South African economy, which is miniscule in relation to first world economies, will probably improve. We believe that the GDP growth estimates for 2020, which are mostly below 1%, are on the conservative side. We are expecting at least 1% and maybe as much as 1,5% this year. This idea is based on the steady implementation of reforms within the economy and the fact that we are experiencing a commodity boom which is impacting our mining sector positively despite the best efforts of the government to create a hostile investment climate. This prediction obviously assumes that our problems with electricity and Eskom are at least mitigated. We believe that Eskom represents an outdated and obsolete mechanism for power generation and distribution. New technologies are opening the way for distributed generation - which will be largely undertaken by private enterprise. Eventually, government involvement in the energy sector will probably disappear or be much reduced - as will the use of fossil fuels. Both are expensive and unnecessary. 2020 will certainly see some disruptions as this realisation slowly sinks in and while we are still dependent on government-supplied fossil fuels. Forward thinking companies are already implementing their own solutions for power generation as Eskom power becomes increasingly expensive and unreliable.
• The JSE will begin to catch up with other world markets. The JSE has been consistently under-performing the S&P500 index since the start of 2016. This can be clearly seen by a comparative relative strength chart:

Comparative RSI JSE Overall and S&P500 September 2015 to January 2020 - Chart by ShareFriend Pro

We believe that the JSE will begin to catch up with world markets during this year. Our blue-chip shares are heavily underpriced in relation to world markets, even allowing for our emerging market status. A return by international investors to risk-on sentiment should see significant re-investment in both our equity and bond markets.

DISCLAIMER

All information and data contained within the PDSnet Articles is for informational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet Articles are based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any comment or opinion for any reason.

PDSNET ARTICLES

The Debtors' Book

A BIT OF HISTORY

Many years ago, in 1982 when I started this business (which became “PDSnet”), I ran advertisements in both the Rand Daily Mail (RDM) and in the Star – which were the two most widely read newspapers in Johannesburg at the time. At that time, we were a very small business and had no credit rating at all. Despite this the RDM immediately

WeBuyCars - Results

The financial results of companies show how profitable they are and give a good indication of their share’s risk and potential return. WeBuyCars (WBC) is a recent listing which came to the JSE on the 11^th of April 2024. Unlike other listed motor vehicle companies, it is a company which specialises in the purchase and sale

Choosing Winners

We are often asked how we go about selecting the shares to put on to the Winning Shares List (WSL). Right now, there are 102 shares on the list with 5 having gone down since they were added, 94 are up and 3 are unchanged. On an annualised basis, 24 of them are performing at above 100% per annum.   

As a private investor,

Kore Revisited

Kore (KP2) remains at once the most exciting and most risky investment on our Winning Shares List (WSL) at the moment. We originally added it to the list just over a year ago on 16^th May 2024 at a price of 20c. It subsequently rose to a high of 83c on 3^rd October 2024 and we published an article

Rand Strength 2025

The strength of the rand is both a critical and a complex issue for private investors on the JSE. Our currency is influenced by two primary forces:

1. Our local economy’s prospects
2. The rand’s role as a leading emerging market currency

These, in turn, are

Sibanye Revisited

In these uncertain times, when nobody really knows to what extent Trump will back down on the international trade war which he has initiated, many investors are moving into precious metals as a hedge against the weakness of paper currencies (especially the US dollar) and paper assets like equities and bonds.

The problem

Smart Local Investors

The last two months have been wild on the markets – mainly because of Trump’s ill-advised, on-again, off-again tariff policies. The issue now is:

Will this morph into a full-blown bear trend? Or is this correction almost over?

From his election victory on the 6^th of November 2024,

Jerome Powell

The Federal Reserve Bank (“the Fed”) is completely outside the control of the President and Executive Branch of the US government. The chairman of the Fed is appointed for a renewable 4-year term by the President. The President cannot remove the Chair without cause. The current chairman, Jerome Powell was appointed by Trump during his first term as President and reappointed by

Uncertainty Soars

Investors are by their very nature risk takers, but they are always trying to reduce the risk which they have to take to a minimum. Donald Trump, with his threat of an international trade war and his on-again, off-again tariffs has significantly increased the level of risk in markets across the world. This can be seen in the extraordinary volatility in the S&P500

Liberation Day

Trump has done the unthinkable. He has deliberately engineered the collapse of the US and world stock markets in the nonsensical belief that somehow an international trade war will make Americans richer. Nothing could be further from the truth. His actions have taken the S&P down from its all-time record high of 6144.15 on 19^th February 2025 to Friday’s