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.