Bye Bob

Market scorecard

US markets traded lower on Friday, for no particular reason. Well, there was data out showing that US inflation expectations fell to the lowest level in more than two years. Despite that good news, there was still the usual rubbish about the Fed and it's plans, which could mean there's room for one more interest rate hike this year. Tech shares had a rough session, with some of our favourites like Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN) and Meta Platforms (NASDAQ:META) falling by around 3%.

In company news, Adobe (NASDAQ:ADBE) dropped 4.2% after reporting earnings that failed to impress investors. Elsewhere, Arm went backwards by 4.5% on its second day of trading, after the chip design company initially opened up 10%. This is what happens with newly-listed companies. Finally, Naspers/Prosus announced this morning that CEO Bob van Dijk would step down immediately, after 10 years at the helm. Time for some new ideas? Ervin Tu, the group's chief investment officer, takes over as interim boss.

On Friday, the JSE All-share closed up 0.32%, but the S&P 500 fell 1.22%, and the Nasdaq was off by 1.56%. Sad.

One thing, from Paul

There's a new book out about Elon Musk, by veteran biographer Walter Isaacson. Isaacson was the guy who wrote about Steve Jobs, Henry Kissinger and Leonardo da Vinci. If business leadership non-fiction is your thing, you may want to read this one, especially if you own Tesla (NASDAQ:TSLA) shares in your Vestact portfolio.

If you are daunted by the prospect of wading through 688 pages in the hardcover version, here's a link to a useful summary of the key points in the book, by Trung Phan.

I liked this random excerpt. "Elon never asks an employee to do something he wouldn't do himself. He typically works 100-hour weeks and rarely takes time off. When he did take a break to visit South Africa in 2001, he contracted malaria and almost died. The lesson he learned from this experience was that 'vacations will kill you'."

Byron's beats

Clients often ask what their investee companies are doing about climate change. Apple is our biggest holding on average across portfolios and three days ago they released a fun video with Octavia Spencer (as Mother Nature) to spread the message of what they have achieved so far and what their future goals are.

Here are some of the highlights.

- Launched their first ever carbon-neutral product (watch) with the goal to make all products carbon-neutral by 2030.

- Aiming to eliminate all plastic from packaging by the end of 2024.

- Every Apple office, store and data centre operates on 100% clean electricity.

- Over 300 suppliers have committed to using 100% clean electricity.

- Reducing transportation emissions by up to 95% by shipping more products by ocean rather than air.

- Reduced water usage by 63 billion gallons.

That is a good example set by the biggest company in the world.

Michael's musings

Last week Tech Central reported on a new package from MTN (JO:MTNJ), which offers a fixed amount of data and unlimited voice calls. The entry-level plan gets you 10 gigs of data for only R299 a month. Not bad!

The best I could find from Vodacom was 400 minutes and 2.4 gigs of data for R429 a month. I really hope that this simple plan becomes the new standard in South Africa. As it stands, you need a PhD in cryptography to try to understand all the different packages.

I assume that MTN is finding that more of their client base is moving away from voice calls, so they are happy to offer them for free. Have you tried to make a voice call recently during loadshedding? Not to mention that Millennials and Gen Z dislike talking on the phone. Why call when you can rather WhatsApp?

Let's see how Vodacom (JO:VODJ) responds.

Bright's banter

Warren Buffett's Berkshire Hathaway (NYSE:BRKa) shares recently hit an all-time high, pushing the conglomerate's market capitalisation to an impressive $805 billion. Buffett has steered Berkshire's share price to an astonishing gain of about 4 300 000% since he took the helm as CEO back in 1965.

The recent surge in Berkshire's stock was driven by various factors, with Apple shares (NASDAQ:AAPL) playing a pivotal role. Berkshire owns 5.8% of Apple, valued at around $163 billion, just a little over 46% of Berkshire's share portfolio, and receives $775 million in dividends annually.

In the latest annual letter, Buffett singled out his bets on Coca-Cola (NYSE:KO) and American Express (NYSE:AXP). He invested around $1.3 billion in each company in the mid-1990s. Those positions are each worth about $25 billion today, and together they bring in over $1 billion in dividends per year.

Berkshire Hathaway has investments spanning a wide array of sectors, including insurance (Geico), energy (BHE), retail (Nebraska Furniture Mart). Interestingly, a significant chunk of their profits, roughly 80%, comes from consumer-driven businesses.

Buffett's renowned patience and strategic investment style comes into play, especially during times ripe for bargains. As of now, Berkshire sits on a cash reserve larger than the entire value of Disney (NYSE:DIS) - a testament to both Buffett's patience and financial acumen (and the hole that Disney has fallen into).

Signing off

Asian markets are mixed this morning, following the declines we saw on Wall Street last Friday. Benchmarks retreated in Hong Kong and South Korea, led down by technology stocks, while mainland China erased earlier losses. Japanese markets are shut for a holiday.

US equity futures are up a touch in early trade. The Rand is trading at R18.95 to the US Dollar.

Today, Apple is expected to release iOS17, the iPhone's newest operating system. The highlights of the week ahead will be interest rate announcements in both the US and South Africa. In both cases the market expects no change.

Push hard this week, as next week only has 4 days!

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