vestact posted: " Market Scorecard US markets ended down yesterday, capping off a difficult month. The S&P 500 closed at its lowest level since July, recording losses of 4.8% for September. The Nasdaq fell 5.3% for the same period. Economically sensitive compan"
US markets ended down yesterday, capping off a difficult month. The S&P 500 closed at its lowest level since July, recording losses of 4.8% for September. The Nasdaq fell 5.3% for the same period. Economically sensitive companies like industrials and financials were among the worst performers. Vestact customers have shared some of this pain, with their portfolios losing some ground.
In company news, Virgin Galactic closed up 12% after US aviation safety regulators cleared them to fly to space again. Elsewhere, Bed Bath & Beyond tanked by 22% after the homewares retailer reported slower traffic into its stores, supply chain challenges and weak earnings guidance for the year ahead.
To conclude, the JSE All-share was down 0.13%, the S&P 500 was down 1.19%, and the Nasdaq was down 0.44%.
Our 10c Worth
One Thing, From Paul
Friday is my advice-giving day, so here goes: action is better than reflection. In other words, the pursuit of happiness is happiness. Stop thinking so much and start doing.
Life's not always easy, but just keep trying, and don't give up. American poet Robert Frost said "the best way out is always through." Winston Churchill said the same thing with slightly different words, "if you're going through hell, keep going".
Washington Post columnist George Will wrote this week, "we should behave as intelligently as we can, and should be as cheerful as is reasonable. The pursuit of individual happiness, and of a more perfect union, never reaches perfect fulfilment, but never mind."
French philosopher Albert Camus ends his epic essay, The Myth of Sisyphus (about a man repeatedly pushing a rock up a hill), with this line: "the struggle itself toward the heights, is enough to fill a man's heart. One must imagine Sisyphus happy".
Byron's Beats
When a company goes through a tough patch there's an important question to ask: is the issue internal, or is it a result of general business conditions? Nike's current supply challenges are a good example. After Nike released results last week the share price dropped by 6% because they were experiencing production and distribution problems that will affect future profits.
Factories in Asia have shut due to Covid lockdowns, there are shipping disruptions and there's a lack of labour in the developed world. These are mostly external factors that are out of Nike's control. They are challenging, but they are very fixable.
If a company has internal, cultural problems then we need to worry more. For example, Wells Fargo started to receive fines because their employees were scamming clients, which pointed towards a rotten culture. We got out of that one just in time.
We pay very close attention to the news flow from the companies that you own. That's our job and fortunately we enjoy it very much. Of course, we don't get it right all the time, or react swiftly enough, but we try very hard.
As for Nike, I feel confident that we should buy the dip. The company is a well-oiled machine, and it will overcome these short-term challenges.
Michael's Musings
Here's an interesting business story, to entertain you on a Friday. Earlier this week the New York Times ran a story about an investor conference call that went badly wrong.
In February, Goldman Sachs was doing due diligence ahead of a possible $40 million investment into Ozy, a digital media company. As part of the process, Goldman wanted to speak to executives at YouTube because a lot of Ozy's content is served on that platform. Samir Rao, Ozy co-founder and COO, said that he would arrange a virtual meeting with Alex Piper, a YouTube senior manager.
After exchanging emails over Gmail, a time was set for a Zoom meeting between the parties. As the meeting began, Piper asked to switch from Zoom to a voice conference call. Piper's voice started to sound suspicious, as if it was being digitally altered.
Long story short, it turned out that Piper had never been on the call at all. Samir Rao from Ozy had created a fake Gmail account and had impersonated Piper. The blowback from the NYT expose has been severe, with departing staff and new funding questions.
Anyway, none of this would have happened if everyone was back at work. There's a downside to working in your underwear, on Zoom meetings or on the phone.
Amazon just announced its newest invention - a home assistant robot named Astro. Astro is equipped with a screen that's mounted onto a base with wheels just like in those Star Wars films. The robot can perform various tasks including mobile security, playing music, calling your mates, and transporting things around if they weigh less than 2 kilograms.
At first, I thought Astro was going to be a competitor to the robot vacuum cleaner Roomba, but that's not the case. It has ultrasonic sensors, time-of-flight cameras and other imaging tools that allow the robot to adapt to your house with ease, but it won't clean up your rubbish.
Some snarky reviewers have dismissed the Astro as just a camera on wheels or an invasive spy of some sorts, but don't listen to these haters. [As I'm writing this I'm hearing the song "Somebody's Watching Me" by Rockwell, with Michael Jackson singing in the chorus] . Astro sounds like a nice thing to have around, but not an appliance that will solve any specific problems.
Linkfest, Lap It Up
Netflix and SA Tourism announced a content collaboration last week. Didn't Michael suggest something like this a few days ago? The 'Made in South Africa' collection will feature at least 80 features - Netflix: Made in South Africa collaboration.
Sarah Buitendach wrote a super cool column on the resilience of Johannesburg restaurants during the recent pandemic. There's been a big churn in ownership of these iconic spots but the good news is that they live on - An ode to Joburg's eateries.
Signing Off
Asian markets are starting the new month on the back foot. Japan and South Korea are down sharply, while mainland China and Hong Kong are closed for a public holiday. In fact, Chinese markets will be closed for the whole of next week. That's madness, what will we write about?
US equity futures declined in early trade, despite news from Washington late last night that a debt ceiling deal was reached that will prevent a government shutdown. The Rand is trading at around R15.10 to the US Dollar. Wishing you a new month filled with joy, sunshine, and diamond hands!
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