vestact posted: " Market Scorecard US markets retreated yesterday, on the final trading session of a tough half year. The S&P 500 finished the six-month period down by 21%, its worst showing since 1970. On our team, only Paul was born before then. The tech-heav" Vestact - Money with a dash of funny
US markets retreated yesterday, on the final trading session of a tough half year. The S&P 500 finished the six-month period down by 21%, its worst showing since 1970. On our team, only Paul was born before then. The tech-heavy Nasdaq is down 30% for the year-to-date, the most since 2002.
In corporate news, Sibanye is increasing its stake in Finnish lithium miner Keliber to just over 50%, in a EUR 446 million deal. They already own 30% and may take their holding to 80% in time. Elsewhere, the price of Nvidia cards for gaming are said to have halved on second-hand markets, because they are also used by cryptocurrency miners who are throwing in the towel.
At the market close, the JSE All-share was down 2.25%, the S&P 500 lost 0.88%, and the Nasdaq declined by 1.33%.
Our 10c Worth
One Thing, From Paul
Fridays are for heavy topics and life advice, so here goes: How would you like to die? I recently read a thoughtful review of Atul Gawande's 2015 book called "Being Mortal - Illness, Medicine and What Matters in the End".
Everyone says they want to go out peacefully, in a dignified setting. Unfortunately, that's not how it usually happens. People die suddenly, die in freak accidents, or in their sleep, often with their personal affairs in disarray. Many pass after suffering extreme ill-health and terrible discomforts, and their final moments happen in hostile hospital wards.
The basic thesis of Gawande's book is that the modern medical system can make life worse for the dying than necessary. What's the point of medical interventions that extend life by a few weeks, at extreme cost?
Gawande says we should all ask ourselves what trade-offs we are willing to make in our final months, and then share those thoughts with close family and other caregivers. People have different priorities which need to be made explicit.
Some might want to try anything, because they are determined to survive long enough to attend an important family event. Young people may happily take experimental drugs, regardless of the cost. Older persons may prefer to quit treatment and avoid painful procedures. Preserving a pool of funds to provide an inheritance is another possible priority.
Talk to your family about your own wishes and write down your conclusions.
Byron's Beats
Tesla owns a very large network of charging stations around the world. As the first mover, it was crucial for the success of their business to build out this infrastructure. They have 14 000 Tesla-branded spots in the US and 35 000 worldwide. In a recent research note, Goldman Sachs argued that the value of this asset is massively under-appreciated.
This network is currently only available to Tesla owners, and the use thereof is free. But as electric vehicles (EVs) become more widespread, the demand for charging points is going to skyrocket. If Tesla opens them up to other cars, for a fee, that could be a massive financial win (potentially $3 billion per annum). Goldman argues that opening them up now would probably prevent their competitors from building their own charging stations, allowing Tesla to maintain a dominant position for the foreseeable future.
I suppose that Tesla might be reluctant to dilute the exclusivity that their car-owners enjoy. Waiting in a queue behind a Nissan Leaf at a Tesla station may be quite frustrating. Opening up the network would also make buying other EVs more attractive.
Either way, it sounds like a good problem to have. Elon Musk always said he wanted EVs to be open and competitive because the end goal was to reduce carbon emissions. It will be interesting to see which direction they decide to go.
Michael's Musings
With stage 6 loadshedding, it seems that everyone is quickly becoming a solar system expert. The focus is usually on the size of the inverter and battery pack, little thought seems to be given to the solar panels. That's because they are the cheapest part of the system.
The article notes that current panel technology is still rather inefficient because less than 25% of solar energy is converted into power. For local houses with large North-facing roofs, the efficiency of the panel doesn't matter too much. In areas where space is limited or the sun doesn't shine for very long each day, panels need to be better. Centralised solar power plants also need high-conversion panels, to save land, maintenance, and other costs.
The great part about new technology is that there is so much room for improvement. In the case of solar power, the panels and storage solutions still have an exciting road ahead.
Bright's Banter
In recent years, US stocks across multiple sectors have largely moved in tandem. In other words, they all went down or up together. That was certainly true of the early pandemic bear market in March 2020 when every sector experienced significant drawdowns. At that time energy stocks took the hardest hit.
In the post-Covid recovery, everything rallied. The clear Covid-winner was the tech sector, which went up 70% in 2021.
In the bear collapse of 2022, tech stocks are down 30%. In fact, the median decline among Nasdaq-listed stocks is 70%, with lots of smaller companies down massively.
This time we have a sector winner that has gone up in a down market. Russia's invasion of Ukraine and global supply chain shocks have caused commodity prices to spike and oil prices to surge. The scarcity has drawn investors towards energy stocks, which are up more than 30% in value, year-to-date. Wow!
Linkfest, Lap It Up
There is a high probability that F1 will be in South Africa next year. Kyalami is a historic circuit that hosted F1 races between 1967 and 1993 - The history of the Kyalami Grand Prix Circuit.
Asian markets are down for a third day, led lower by Japan. To be fair, Chinese equities have been one of the few bright spots in global markets recently, after a rally since early-May. That was due to Covid curbs being eased, and better economic data.
US equity futures are down in early trade, but let's see how the second half of the year kicks off. We are resolutely cheerful.
The Rand is at around R16.39 to the US Dollar. All commodity-linked currencies seem to be on the back foot against the greenback in recent days.
It's Friday and we are alive. Have a splendid weekend and go Bokke!
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