JSE Direct with Simon Brown

Gold gets its wings on (#409)

July 22, 2020

Simon Shares

Day 119 of lockdown and Covid-19, cases may be moderating? Monday is 4 months of lockdown.

  • Quantum Foods (JSE code: QFH) is coming back to earth after 1157c last Friday.
  • Tech stocks in the US are flying. Expensive? yes, but. They have solid earnings, a moat and lots of new products they can roll out.
  • Very solid Datatec (JSE code: DTC) update.

From @keithmclachlan on Datatec valuations

Westcon at $600m x R16.50 = R9bn + Logicalis x 10 PE x R16.50 = R5bn = R14bn..

Less 10% head office = R12.6bn equity value against R5bn current market cap..

Listen ==>> https://t.co/HeaMQxTCYK@Moneyweb #MoneywebNOW

— Simon Brown (@SimonPB) July 22, 2020


  • Long4Life* (JSE code: L4L) buying back 40million shares at 275c which is less than 50% of the last stated net asset value.
  • The PSG (JSE code:PSG) AGM talks about PSG 3.0.
  • The Zeder (JSE code: ZED) AGM was a mess as directors didn't take all the question that were asked via the virtual system
  • Best execution rule is coming to South Africa and this is a biggie in many ways.

* I hold ungeared positions.

Gold gets its wings on

I have never been a gold bull, in fact, the phrase I most used for gold stocks was that the only time you buy a gold stock was when you closed a short.

But golds time has arrived and the miners are going wild even with a vaccine at some point this trend is likely to continue.

The stimulus in the US and EU is massive and while stock markets are doing great, and maybe they can be propped up forever (certainly it worked post 2008/9 crisis) the underlying economies are not doing so great.

Gold ETFs are an easy way to get exposure but they have no leverage, so less risk and less reward. Gold miners offer that leverage so will do way better, but also bring a bunch of risk.

The Rand also brings risk as it strengthens.

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