The Balgowan witch’s ‘what if’ so far

OK, my ‘what if’, the ousting of President Zuma to be did not come true in exactly the way I suggested. Nevertheless a combination of my crystal ball (computer charts) and black dog rather than cat by my side, my ‘what if’ predication came almost true with the appointment of Cyril Rhamaphosa as deputy. What’s more, should anything happen to Zuma, I suppose Rhamaphosa would immediately step into his shoes. Later I guess, if he keeps out of trouble, he’ll possibly be our next president.

As I’ve said before, I avoid politics and political figures and the one I don’t avoid, Mangosuthu Buthelezi, I regard as a friend, rather than a politician. However I do know something about Rhamaphosa, but as a businessman rather than a politician. He is the son of a policeman and his vast wealth came about by his success in business, which must surely illustrate how good a businessman he is. Perhaps as important is that as an already wealthy man, he is immune to the kind of bribery that has been the downfall of South African politics for goodness knows how long. As for a conflict of interest, rather like Ben and I, who write about but also own shares, by declaring our interests, his slate is sparking clean.

My eyes have been glued to the charts since Rhamaphosa’s appointment. As a result, I have cancelled my shock/horror predictions for the rand, but need to gather a few more statistics before I can confidently replace them. The rand had been gathering strength since it almost tipped over the $1/R9 towards the end of November but as the Rhamaphosa news hit the headlines, it leaped 3%. It is now recovering from a seriously oversold position and according to its moving averages, is in the process of shifting from a bear trend, but it’s much too soon to call it the start of a bull trend. It has broken down through a support on its point-and-figure chart and a spread triple bottom which hint s at a recovery to about $1/R6,4, but don’t yet hold your breath.

The share market, that for ages has thumbed its nose at our downgrading and the foreign perception of our chaotic politics, has continued in an ever-strengthening bull trend that began in June, and continues to frequently reach new highs. At the top of a standard error channel, it is a little overbought and is likely to settle back a little over the Christmas/New Year period. This will give serious investors an opportunity to look at their portfolios and perhaps make a few adjustments and consider some new nibbling here and there.

Remembering that the US is on the edge of a fiscal cliff, that I am sure will be averted at the eleventh hour, I’m taking a close look at gold. Assuming a new bear trend, it doesn’t look too healthy at the moment. As far as we are concerned the strengthening of the rand and the lower gold price, has dulled the glitter of Krugerrands and almost pushed Newgold into a bear trend. Ben and I have a modest interest in Newgold, but will not be cashing in.

Jean Temkin


My Christmas ‘what ifs’, predictions and moans

At this time of the year, I am typically rushing around fulfilling my ‘things-to-do’ list ahead of a family Christmas, but this year my kith and kin will be the lucky to get a mouldy orange in their stocking. Nevertheless, with my witchlike reputation, as in most other past years,’ I will dust off my crystal ball and make a prediction or two. First I ask you to bear with my moans.

Politics is not my forte and in my long newspaper career, I have avoided writing on politics the plague. However, when I see politics creating havoc with the economy, my blood boils. The way I see it is that much of the economic mess we are in can be put at the door of government.

In an attempt to cheer myself up I am pondering a ‘what if’ that would not only pick me up but also put smiles back on the faces of the thinking people of this country. What if at the upcoming ANC Mangaung conference, President Zuma was ousted and replaced by someone who is happy to live with his only wife in an ordinary home. Better still, someone with intelligence, a solid business background with no desire to enrich himself at the expense of others. Most important of all, someone not regarded as a joke by the rest of the world so frightening off foreign investors seeking a stable environment in which to lodge their accumulated piles of cash that are desperately seeking a home.

Despite a drastic fall in foreign investment, the one thing I am not at all despondent about is the performance of the share market. Despite the political chaos, it frequently reaches new highs. For this we must be thankful that, rather happenings in our own country, we follow the major markets. Nevertheless, there is some confusion here, as our share market is doing better than many leading markets. The JSE Overall is 18% above its pre-crash high while the Dow Jones Industrial is 5% lower, the FT 100 12% lower the DAX 6% lower and the HangSeng 28% lower.

With the stranglehold, the labour laws imposed on South African business, the success of our share market is amazing. It must surely be telling us something about competence of our business leaders and shows up the incompetence of our present government.

Now is the time for a prediction or two. Regular readers know my dire predictions for the rand, which over the past thirty months has been knocked 30% lower in value. As things stand at the moment, I am holding on to my downward counts of R17,68 against the pound R13,92 against the euro and R10,73 against the dollar. However, should my ‘what if’ materialise, I will no longer back them as renewed faith in our country will immediately commence.

Using the point and figure chart, my prediction for the JSE Overall index is positive, and, if my ‘what if’ comes about, it would be even more so. My positive feeling about the share market comes for the three triple tops that have appeared on the chart. These I have identified with TT.

A triple top formation occurs when a price or index has reached a resistance level and fallen back. It again moves up and tests the resistance, only to fall again. However, on its third attempt, it breaks through showing that resistance has been broken.

Jean Temkin

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Ben & Jean share their thoughts on the Investment World & its opportunites, plus anything else that they think will be interesting