Things had fallen back into uncertainty regarding the GNU as we entered the last weekend of June, but this has now been resolved. The uncertainty caused the rand to go back above R18/$ and the JSE to fall below 80 000 points.
We are now halfway through the year and have just started the third quarter. Things have been going rather well investment-wise in the USA where the S&P500 is up around 15% in dollars and the Nasdaq is up around 19%. The local market has not given us much but at least the rand is not much weaker against our trading partners.
When we started the year we knew that with all the elections taking place around the world, things would be volatile. It seems that a lot of countries are moving away from the left and more towards the right. Voters want a leader who appreciates productivity and a country where hard work is rewarded. As investors, we will benefit if the companies we invest in are allowed to do what they do best without political interference, and where a business-friendly environment exists.
The world we live in will always keep evolving. To be successful in this evolving world we have to invest not in the company of today, but in the company of tomorrow. A good example of this can be seen in the growth between the following two companies in the same industry: Walmart is a company selling everything to everyone from traditional “physical” shopping centres. Amazon does the same, but they do it online. Look at their respective revenue growth over the last 30 years or so (chart).
It is clear that online shopping has outpaced the traditional way of shopping; i.e. out with the old, in with the new.
The people of South Africa have voted for change in our recent elections; if our politicians allow this vote to manifest in the way the country will be governed in future, we will see our country go from a Walmart to an Amazon.
