Reliable - you hope

ZARX, the new stock exchange has arrived and, as an investor in shares, it’s nice to know there is another avenue down which I can trade. Even nicer to know trading is less expensive and quicker.

I don’t know if I’ll ever trade on the ZARX. I guess that depends on which companies list on it and how quickly I want to trade. Cost could also be a factor.

I did recall, though, that SA used to have two stock exchanges, the Johannesburg Stock Exchange (JSE) and the Union Stock Exchange. In my youth I was the ward of an aunt and uncle and the father of the uncle, had been a stockbroker on the Union Stock Exchange until he retired.

At the time, I had not yet discovered the terrain of stocks and shares, and was uninterested. But I did recall that there were two markets. And so, I asked myself what happened to the Union Stock Exchange?

In my youth I would have had to research in a library. Now I have the internet. Here I have been told that the Union Exchange was introduced as a rival to the JSE in 1933 and that it wound up in 1958 when its listed companies were merged into the JSE lists.

Again using the internet, I looked at the history of ZARX and was informed (I quote): ‘South Africa’s first, and until now, only bourse, the JSE, was formed in 1887 during the first South African gold rush.’

Oh well, the internet is quick but who said it was reliable?

Ben Temkin


Seeing Again

For more than three years I’ve had double vision. You might have thought this was a bonus – two for one. The fact is that it’s debilitating. Reading was onerous as the print was always out focus and typing was a slog.

The double vision was one of the side effects of the several strokes I had had. I had been lucky because the other side effects had been mitigated by my own physical therapy.

Now, if I had been forced to earn a living by writing, I would have continued by doing just this and, put up with the double vision. However, my retirement income is sufficient and so I have avoided unnecessary writing.

Of course I continued to the various doctors that I still suffered from double vision but they appeared to be pleased that I could read.

Why don’t you dictate, one of the medical specialists asked me? Good suggestion but I had to review the stuff and that was a pain.

For several years both Jean and I have had our eye tests with a specialist. However, it seemed she could need new glasses and so, to optician/optometrist Owen.

After Jean’s examination, I mentioned to Owen it was a pity, nothing could be done my double vision.

‘But, of course, it can,’ Owen said.

This was proved by arduous examination followed by new glasses. And, as I can now see again, I can also write.
I know that at least one of the former readers of the narrative of Jean’s and my High Yield Portfolio is anxious for its resumption. There may we others. In any case, the story goes on.

I had rather hoped the resuscitated Rand Daily Mail would like the revived narrative, especially I as there was no fee. Alas, the bait was nibbled but was not taken.

Ben Temkin


GOOD RETURN

Triggered by a hopeful reader, I’ve scribbled down some notes on Jean’s and my High Yield Portfolio.
Chances are that you know nothing about the portfolio and so let me give you some background.

About seven years ago, following a discussion with the Business Day editor, we reckoned that it would be interesting and, perhaps, fruitful for the readers and us if we invested a substantial amount of money into the market into and shared our anguish and possible joy with the audience.
Over some 18 months we selected and bought 10 counters , each about an equal weight and each with an attractive dividend yield. One counter, Stefstocks, was sold early on at a small loss, leaving the Portfolio with nine counters.

The Portfolio was begun with a purchase of Grindrod and the other counters, Hudaco, MMI, Pick ‘n Pay, Reunert, Spar, AVI, Famous Brands and Imperial were added – a total investment of a million rands by June 2013.
Mainly reinvesting dividends, we have added more purchases of Spar, AVI and Famous Brands, the latest in investment being a purchase of R60 000 in Famous Brands last month. In total, the Portfolio has invested R1,35m and its market value to date is R2,35m.

We have been silent on the Portfolio some three or four years but have decided because of the trigger above, and the fact the Portfolio’s vicissitudes are a good real life example of investment, to continue to tell its story.

The Portfolio has done reasonably well over the period. Its internal rate of return to date is 15.26% per year. The return means the Portfolio has more than doubled every 4,6 years since inception.

(Fortunately, Microsoft Excel has a formula for internal rate of return and the accompanying article could help those who are interested.)
The internal rate of return is our performance gauge. In deciding whether to invest in more shares – or selling some- we examine a wide range of investment fundamental and technical factors. The internal rate of return tells how well, or badly, we’ve analysed those factors.

Ben Temkin

I have overlaid the weekly closing price chart of Pick ’n Pay with fan-like speed lines and exponential moving averages. On two occasions the price dropped through the lower speed line during the four-year bleak period for the share. Then, in a strong recovery phase, the price moved quickly upwards into the higher section of the fan.

It then fell but was well supported at around R64. On its point-and-figure chart (not shown) several upwards breaks give us a possible count to around R83.

I have plotted Pick ‘n Pay’s moving average, red short-term, green medium-term and mauve longer-term. Presently stacked in this order, it illustrates a bear trend. However the short-term moving average is rushing upwards and likely to cross the other moving averages very soon. This will switch the stacking order the short-term, above medium term, above long term, confirming a new bull trend.

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