PDSnet Articles

Our L4L Mistake

29th May 2017 we published an article (“Long 4 Life”) in which we extolled the virtues of a new listing – Long 4 Life (L4L). The important characteristic of this share was that it was started and championed by the famous entrepreneur, Brian Joffe (of Bidvest fame). Using his name, Mr Joffe raised R2,3 billion from eager investors anxious to participate in his latest venture.

Within a short time Mr. Joffe had brought Kevin Hedderwick on board as CEO. Mr Hedderwick is very well known for the fact that he built up Famous Brands to the dominant position that it now enjoys in the restaurant and fast-food business. The market loved this choice – how could Long 4 Life fail with two such talented businessmen running it? Read More

Premfish Plays the PE Game

One of the great advantages of listing on the JSE (or any market) is that it re-rates a company’s shares from their pre-listing level as a private company (which is usually between 3 and 5 times their most recent after-tax earnings). Most listed companies can look to trade on the JSE at somewhere between 10 and 15 times after-tax earnings – depending on their track-record and the type of business they are in (service companies tend to trade on higher multiples than, for example, manufacturing companies – because they have much less working capital risk). Read More

Black Monday Anniversary

Today (19th October 2017) is the thirtieth anniversary of “Black Monday” – the day on which the Dow Jones industrial index fell 23% in a single day – its single largest one-day fall in history. This massive fall dwarfed even the previous Black Monday which was 28th October 1929 – which signalled the start of the Great Depression. On that day the Dow only fell by a measly 9%.

There was also a Black Monday on 24th August 2015 when the Dow fell by 6,6%. This was the fifth down-day of a six-day fall which saw the Dow fall by a total of 10,7%. These periodic events, occurring as they have late in October month, have made investors wary – and some will sell out of their positions completely every October just on the off-chance. Read More

Stadio’s Shooting Star

The ancient Japanese charting method known as “candlestick charting” in the West predates Charles Dow (the “father” of technical analysis) by several centuries. It contains some very simple and useful wisdoms which private investors would be well-advised to follow.

The recent listing of Stadio on the JSE gives an excellent example of what the Japanese call a “shooting star”. Read More