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Market Scorecard
The price of oil and the English Football team both tumbled yesterday. The price of Brent crude dropped 6.9% due to Libya turning their taps back on; there has been fighting at Libyan ports which froze their production for the last two weeks. Undoubtedly the biggest event of them all yesterday was Anderson beating 'The Fed', Wimbledon final here we come?
Yesterday the JSE All-share closed down 1.37%, the S&P 500 closed down 0.71%, and the Nasdaq closed down 0.55%.
Our 10c Worth
One thing, from Paul
People who work in high finance tend to develop the belief that they know a lot about business. As Matt Levine at Bloomberg points out, this can get out of hand, and finance professionals end up thinking that they are, in fact, better at business than regular businesspeople.
- "The financial industry is a sort of meta-business. Successfully investing in or lending to companies requires you to understand their underlying business, and the deeper your understanding the more confident you will probably be in your investment.
The more glib and confident you are at demonstrating that understanding the further you will probably go in the financial industry. And if you go far enough you will get quite rich, which will further reinforce your self-confidence.
The predictable result is that, at the highest levels, the financial industry tends to be full of people who know a lot about other companies' businesses and think they know even more. Some of it ends up looking-and being-pretty hubristic. For example, what does a hedge-fund manager know about low-end retail?"
Haha, well said! If you catch us here sounding like that here, please let us know?
Byron's Beats
Our job here at Vestact is to watch trends and to try to invest in line with those trends. One trend that I have noticed gaining huge traction over the last decade is gaming. Yesterday gaming, as a form of global entertainment, jumped to a whole new level when it was announced that Blizzard Entertainment and Disney have signed a multi-year deal to broadcast the Overwatch League on ABC networks, ESPN and Disney XD.
The games will air during prime time on ESPN on July 27-28. Remember that most of this content is already live streamed on Amazon's Twitch, but this signifies a move to mainstream content creation.
How have we invested alongside this theme you may ask? We already have loads of exposure to the sector. Tencent is the biggest gaming company in the world, and even own a stake in Activision Blizzard. We own Tencent through Naspers. We also have exposure to Nvidia which make the gaming chips, as well as Amazon who own Twitch, the gaming streaming product mentioned above. Clients could also own Activision Blizzard and Disney directly if they felt compelled, both quality businesses. There are plenty of options available.
Michael's Musings
While Trump is busy slapping tariffs on Chinese imports, Elon Musk is making plans to open a massive factory in Shanghai. To be a truly global car manufacturer, a large factory in China is a must. The expectation is that Tesla will start producing cars in the factory in 2020, and in time will ramp up to producing 500 000 cars a year. Tesla's current annual production is only 260 000, this new factory shows how quickly Tesla expects to grow its total production.
There are no details yet around the cost of the factory, I'm sure that we will get those in time. Building the cars in China, should allow for the cheaper production of cars, and no import tariffs being slapped on them. Good for both Tesla and the Chinese consumer - Tesla is planning to build a plant in China that produces 500,000 vehicles a year
Bright's Banter
Uber just canned it's self-driving car project in Pittsburgh. The company suspended the driverless-car testing at all of its secret locations in Pittsburgh, San Francisco, Toronto, and Tempe after a fatal accident earlier this year, that caused an uproar about autonomous vehicles. The humans are just not ready!
The great news here is that all of the 100 or so mission specialists on project "bat-mobile" are going to be redeployed back into the business and they have a choice to apply for positions that resonate with them and where they can use their skills. They're still expected to provide more thorough technical feedback on the self-driving car advancements.
Linkfest, Lap it Up
Warm weather in the UK is helping archaeologists to find old settlements - Cropmarks.
It is amazing how quickly the 'app economy' is growing. From 2017 to 2018 alone, there was growth of 50% - The App Gold Rush.
You will find more infographics at Statista
Vestact in the Media
Bright was on Business Day TV last night, talking about stocks tied to millennials - Should you bet on stocks tied to millennials?
Team Vestact gets a mention in this Business Day market wrap - JSE falls towards 57,000 points as trade war heats up
Signing off
Asian markets this morning are all in the green, it seems that the tariff risks have now been thought through and factored into market prices. We also have 7-weeks before any more tariffs can be implemented, so we are safe for now. The All-share is off to a positive start this morning, good to see! Then later today is a US CPI read, which is expected to show the continued rise in inflation.
Sent to you by Team Vestact.