Hocus focus

Market Scorecard

US markets were squirrelly yesterday, starting well but falling in the afternoon, with technology stocks especially weak. The healthcare, banking and energy sectors fared better.

In company news, SpaceX is burning up on re-entry, down 16.4% for a third straight day of losses because it announced a $20 billion bond offering. Elsewhere, Google slumped 4.9% after 2 senior AI model developers departed, one for Anthropic and the other to OpenAI. Finally, Salesforce fell 1.1%, extending its losing streak to 14 sessions.

In summary, the JSE All-share was up 0.11%, but the S&P 500 slipped 0.37%, and the Nasdaq fumbled the ball and dropped 1.32%. Bummer.

One Thing, From Paul

I noted yesterday that most of our Vestact-recommended companies have dramatically improved their businesses over the decades we have held them.

For example, Amazon started off as a website selling books, from Jeff Bezos’ garage. Now it’s an e-commerce giant with a global logistics back-end, a content streamer, an advertising giant, and the world’s leading cloud-hosting business.

And they never stop innovating. The AWS team just made a significant networking breakthrough to make future data centres faster, cheaper, and more energy-efficient.

Most data centres today use a structure called a "fat-tree" topology, which organizes servers and networking equipment in a hierarchy, leading to bottlenecks, and massive coils of cabling. Amazon’s new solution is called Resilient Network Graphs (RNG), which, instead of forcing data to travel through a rigid hierarchy, uses a random-routed, mesh-like network. They created a device called the ShuffleBox, which dynamically reorganises the network connections.

AWS says the new design delivers major improvements compared with traditional networks, with 69% fewer routers and switches, 33% higher data throughput, 40% lower network power consumption and 27% lower operating costs. This will probably become the new industry standard.

Byron’s Beats

The global payments industry is moving towards greater integration with stablecoins. Mastercard is taking the route of buying infrastructure, to own the whole ecosystem. Visa is going in a different direction, using their trusted brand and global network to partner with some of the biggest players in blockchain-based payments.

Visa already connects merchants, consumers and financial institutions, so they have the trusted network in place. Extending that model to stablecoins feels like a natural fit.

I think that stablecoins are a genuine disruptive threat to traditional payment networks. This blog post does a nice job of explaining how Visa and Mastercard are entering the space in very different ways. My feeling is that both approaches could work pretty well if stablecoin adoption really takes off.

Michael’s Musings

The older I get, the more I’m struck by the opening lines of the Serenity prayer - "God grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference."

Living in Joburg, you come across many injustices that need correcting and worthwhile causes to support. The reality is that there are not enough hours in the day, and money in the bank, to support them all.

I think when it comes to business and life, being focused is key. Focus allows you to do fewer things, but at a much higher quality. Thanks to the compounding nature of our effort, doing one thing really well offers much better returns than doing three things at minimum capacity.

There is a famous story of when Bill Gates and Warren Buffett were asked to independently name the single most important factor for their success, they both gave the exact same one-word answer: Focus.

Here is a cool snippet of Jony Ive talking about the topic - What Steve Jobs taught him about focus.

Bright’s Banter

I love a good blockbuster budget story from the movie industry. The best investment in entertainment so far this year has been an indie horror film called Obsession.

Obsession was made on a small budget of $750 000 but has generated more than $300 million at the global box office. That’s a return of about 400 times its production cost, making it arguably the highest-returning film investment of 2026.

The movie was directed by 26-year-old YouTuber Curry Barker and distributed by Focus Features. This story proves the old logic that when it comes to capturing audiences, creativity often matters more than the size of the budget.

Signing Off

In Asia, stocks are a mess.

In local company news, Standard Bank maintained its full-year guidance after delivering a resilient performance in the first five months of the year, supported by solid loan growth, higher client activity and lower credit impairments.

The Rand is trading at around R16.49 to the US Dollar.

US equity futures are looking wobbly.

It’s a new day. Keep well.

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