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 The Sharenet Daily 
Tuesday, 23 August 2011 - 20:00
Top News
SA Business
Company News
Company Results
World Markets (Spot Prices)
JSE Today
JSE Trading Statistics
Major Moves
Index Summary
Latest Consensus Changes / Results Expected
Recent Dividends / Ex Div
Upcoming AGMs
Stock Exchange News Service (SENS)

Circle of Competence

As investors, it is important that we invest within our circle of competence. Purely purchasing an asset, be it a share, bond, property, commodity, etc, based on a hunch or trend is a sure way to destroy capital over time. There is no doubt that this type of purchase (note that this would not be regarded as an investment) can, and will, at times produce spectacular returns, but if repeated can, and will, also lead to spectacular losses. We therefore often refer to these purchases as speculating.

Building an investment circle of competence requires a significant number of man hours of diligent research and analysis. Someone entering the industry and starting a small operation will no doubt have a smaller circle of competence than a company with a 50 year track record and 100 investment professionals. A small circle of competence does not preclude an investor for great performance, but does limit the areas in which the investor can invest with confidence. Over time an investor will be able to expand their areas of expertise, with successful investors being the ones that don’t attempt to invest outside of their circle or grow their circle too quickly.

Warren Buffett is famous for saying that Berkshire Hathaway constantly focuses on staying within its circle of competence. He is generally regarded as the most successful investor of all time, but famously passed up on investing in TMT (Technology, Media, and Telecommunications) companies. In the late 1990’s he was widely criticised as not being in touch with the ‘new world’, but was adamant that he’d continue to focus on investing in what he knew. Orbis, Allan Gray’s sister company investing globally, also avoided TMT shares in the 1990’s.

Warren Buffett, through Berkshire Hathaway, and Orbis were happy to ‘stick to their knitting’ and carry on investing within their circle of competence. They both have outstanding long term track records but went through extremely tough relative periods at the end of the 1990’s. There were, no doubt, some managers who were able to profit handsomely during the TMT boom and bubble but Buffett and Orbis were brave enough to admit that they didn’t understand the valuation of TMT companies and that they were therefore not going to invest into them, a move that was vindicated in the early part of the 21st Century. Interestingly, Orbis currently has a large holding in technology shares. They have clearly worked hard on developing the right skills to be confident in their ability to value technology companies.

The fear of ‘missing out’ is often the main reason that investors stray from their circle of competence. Seeing others profiting from strategies that you are not entirely familiar with can be frustrating, but changing your strategy to an unknown one with is a certain way to generate disappointing returns.

At Seed we are constantly working on slowly expanding our circle of competence. The expertise developed over years of asset class valuation and manager research has stood us in good stead in managing our multi-managed portfolios. The evolution of our skills has resulted in the development of the products and services that we offer to our clients. Understanding our process inside and out is key to sticking the course when things get tough.

To sign up to Seed's newsletter (which includes weekly investment reports, fund fact sheets, market overviews, and more) click here and enter your details. For regular updates on investment and economic news visit our Facebook Fan Page by clicking here and 'Liking' our page.

Take care,

Mike Browne
021 9144 966

Tue, 23 Aug 2011
Top News
Zimbabwe's year-end inflation target of 4.5 percent has come under pressure from rising food prices, but the government has no current plans to revise its forecast, Finance Minister Tendai Biti said on Tuesday.  Full story

South African government bonds ended little changed on Tuesday, shedding the bulk of intraday gains as investors judged a reaction to dovish comments from the central bank earlier in the day had been overdone.  Full story
A New York judge dropped all criminal sexual assault charges against ex-IMF chief Dominique Strauss-Kahn on Tuesday after prosecutors lost faith in the credibility of his accuser.  Full story
Triumphant rebels seized Muammar Gaddafi's compound in Tripoli on Tuesday after a fierce battle with a loyalist rearguard but there was no word on the fate of the Libyan leader who vowed again to fight "to the end."  Full story
Hurricane Irene posed a potential threat to the entire U.S. East Coast from Florida to New England, U.S. officials said on Tuesday, as forecasters tried to predict where the powerful storm might hit over the next week.  Full story
SA Business
Shares in South Africa's Gold Fields, the world's fourth-largest gold producer, fell over four percent on Tuesday in its biggest one-day. . .  Full story
. . .  Full story
South Africa's National Union of Mineworkers (NUM) and the smaller union Solidarity said on Tuesday they had rejected a revised wage. . .  Full story
Kenya's Athi River Mining plans to build a cement factory in South Africa next year, its managing director said on Tuesday,. . .  Full story

A South African government department has applied to intervene in antitrust hearings of Japan-based Kansai Paint's $260 million takeover of local. . .  Full story
Nigerian President Goodluck Jonathan announced on Tuesday a new state company that will guarantee to pay for power generated in Africa's. . .  Full story
. . .  Full story
The South African Reserve Bank's leading business cycle indicator rose by 1.8 percent in June compared with May, the central bank. . .  Full story

The global economy continues to be in crisis and monetary policy alone cannot solve the problem, South African Reserve Bank Governor Gill Marcus said on Tuesday.. . .  Full story
Absa Capital said on Tuesday it had upgraded ArcelorMittal South Africa, a unit of the world's top steelmaker, and paper maker Mondi from underweight to equal weight.. . .  Full story
South Africa is likely to cut its maize output forecast for the May 2010/April 2011 season as continued wet weather in some parts of the country delay the harvesting process and. . .  Full story
Company News
In terms of paragraph 3.4 (b) of the Listings Requirements of the JSE Limited, the board of Stefanutti Stocks hereby announces. . .  Full story
The board of directors of Trustco inform shareholders that Ms J Bazuin has resigned as company secretary with effect from the. . .  Full story
The board is pleased to announce the appointment of Vanessa Olver, current Financial Director, as Deputy Chief Executive Officer and Executive. . .  Full story
Implats confirmed that its Zimbabwean subsidiary, Zimbabwe Platinum Mines (Pvt) Ltd ("Zimbabwe Platinum Mines"), and its joint venture, Mimosa Platinum (Pvt). . .  Full story

According to Business Report, Pick n Pay is South Africa's most engaging brand, according to a survey by marketing consultancy Yellowwood.. . .  Full story
According to Business Report, Pikwik is South Africa's most engaging brand, according to a survey by marketing consultancy Yellowwood. Yellowwood said. . .  Full story
Optimum Coal shareholders are referred to the announcement released on SENS on 15 August 2011 wherein shareholders were advised that Optimum. . .  Full story
Dr D C Cronje has notified the board of his intention to retire as director and chairman of the board, following. . .  Full story
Company Results
Revenue improved by 7% to R791 million (R740.2 million) and earnings before interest, taxation, depreciation and amortisation ("EBITDA") was up by. . .  Full story
Insurance premium revenue was up by 11% to R1.1 billion (R1 billion). Net attributable profit rose by 22% to R195 million. . .  Full story
Revenue increased by 9.3% to R7 586 million (R6 939 million) primarily as a result of increased revenue in CMED and. . .  Full story
Revenue decreased to R2.6 billion (R2.9 billion). EBITDA amounted to a loss of R211.8 million (earnings of R285.7 million) and an. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0029259.86-173.26-0.59%
JSE Top 4017:0026026.72-161.99-0.62%
JSE Gold17:002717.24-64.43-2.32%
JSE Financial17:0020518.34-44.71-0.22%
JSE Industrial17:0031037.33-72.15-0.23%
JSE Indust 2517:0025987.61-27.00-0.10%
JSE Resource17:0047171.41-619.00-1.30%
DJ Futures19:5611035.00182.001.68%
DJ Ind19:4511025.06170.411.57%
SP 50020:001143.5019.681.75%
FTSE 10017:355129.4234.120.67%
All Ords08:384239.8089.002.14%
NZSE 5007:463269.591.750.05%
NameTimeRPMove% Move
Gold/R kg20:00431515-3475-0.80%
Brent Crude19:56109.601.651.53%
Rand / Dollar19:597.1898-0.0107-0.15%
Rand / Pound19:5511.8317-0.0078-0.07%
Rand / Euro19:5510.36870.01600.15%
Rand / NZD19:585.98980.05911.00%
Rand / AUD19:557.54030.04230.56%
Yen / Dollar19:5876.6000-0.2100-0.27%
Euro / Dollar19:550.6933-0.0029-0.42%
Dollar / Euro19:591.44160.00590.41%
Pound / Dollar19:550.6060-0.0012-0.20%

Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics

Major Moves Up
SharenameSaleMove% MoveVolume
1 BAUBA  2555527.50.%4600
2 RANGOLD  2743414.17.%15500
3 NUWORLD  220020010.00.%112
4 AME  44983488.39.%1965
5 CLIENTELE  974545.87.%989
6 EQSTRA  743344.80.%127826
7 BLACKSTAR  1100504.76.%4000
8 WITSGOLD  49752254.74.%397
9 DRDGOLD  360164.65.%4188191
10 AVUSA  23591044.61.%38825
11 RAINBOW  1675654.04.%410
12 SANTAM  130004453.54.%34234
13 GBGOLD  1500503.45.%16770
14 ANOORAQ  465153.33.%19333
15 VERIMARK  15553.33.%18002
16 ARB  330103.13.%18000
17 AFRIMAT  380102.70.%4100
18 PAN-AF  15742.61.%6823410
19 VALUE  38092.43.%6500
20 HOSP-A  1341312.37.%2800

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Major Moves Down
SharenameSaleMove% MoveVolume
1 PARACON  182-13-6.67.%500
2 ILIAD  500-30-5.66.%652977
3 ALTRON-P  2331-119-4.86.%20541
4 GFIELDS  11925-540-4.33.%4865426
5 UNIVERSAL  240-10-4.00.%2520
6 PBT  125-5-3.85.%157596
7 AFGRI  608-21-3.34.%633781
8 AVENG  3187-105-3.19.%773176
9 TRUWTHS  7425-239-3.12.%971449
10 TIGBRANDS  19400-586-2.93.%493300
11 PETMIN  272-8-2.86.%88998
12 ARCMITTAL  5664-166-2.85.%506052
13 BARWORLD  5825-167-2.79.%573944
14 SHOPRIT  10240-279-2.65.%1880048
15 CML  1901-51-2.61.%254937
16 ASSORE  21085-545-2.52.%32870
17 ASTRAL  11601-298-2.50.%87238
18 FIRSTRAND  1901-48-2.46.%9956001
19 ALTECH  5700-140-2.40.%23541
20 ABIL  3222-78-2.36.%3326074

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New Highs
SharenameSaleHighMove% MoveVolume
1 BLACKSTAR  11001100504.76.%4000
2 PAN-AF  15716142.61.%6823410
3 GOLDONE  39539551.28.%564553
4 DIPULA-B  57557550.88.%5000
5 DIPULA-A  85985910.12.%1400
6 WOOLIES  31603255-52-1.62.%2401910
7 MASSMART  1500015495-280-1.83.%434120

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New Lows
SharenameSaleLowMove% MoveVolume
1 ARCMITTAL  56645500-166-2.85.%506052
2 WBHO  95969399-194-1.98.%42834
3 OANDO  200195-4-1.96.%33824
4 VPIF  715715-4-0.56.%600
5 PERGRIN  10009950.32086

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Index Summary
Index NameRPMove% Move
Top 4026,026.72-161.99-0.62%
Mid Cap40,192.19-190.49-0.47%
Small Cap30,767.51-70.28-0.23%
Resource 2047,171.41-619.00-1.30%
Industrial 2525,987.61-27.00-0.10%
Financial 157,654.89-24.87-0.32%
Financial & Ind. 3028,926.61-49.31-0.17%
All Share29,259.86-173.26-0.59%
Oil & Gas 23,202.08-263.91-1.12%
Mining 31,172.05-382.24-1.21%
Gold Mining2,717.24-64.43-2.32%
Platinum Mining62.58-.22-0.35%
GENERAL MINING7,495.30-79.54-1.05%
Oil & Gas Producers 12,475.33-141.90-1.12%
Basic Materials 26,371.62-304.26-1.14%
Chemicals 12,616.71-114.07-0.90%
Forestry & Paper 12,045.8376.760.64%
Industrial Metals 25,951.96-238.33-0.91%
Industrials 25,977.18-303.83-1.16%
General Industrials 71,713.78-839.39-1.16%
Consumer Goods 25,832.30308.631.21%
Automobiles & Parts 3,532.56-65.66-1.82%
Household Goods135.11-1-1.07%
Health Care 31,987.53-146.20-0.45%
Beverages 84.381.601.93%
Index NameRPMove% Move
Food Producers 46,856.02-743.85-1.56%
Personal Goods 375.935.791.56%
Consumer Services 51,051.12-832.04-1.60%
General Retailers 42,562.14-754.36-1.74%
Travel & Leisure 3,558.75-17.50-0.49%
Media 74.33-1.03-1.37%
Support Services 2,256.31-36.71-1.60%
Telecommunications 66,228.34-296.77-0.45%
Financials 20,518.34-44.71-0.22%
Banks 38,308.63-273.19-0.71%
Non-life Insurance 31,523.821079.083.54%
Life Insurance 14,918.9440.070.27%
General Financial 2,067.58-3.30-0.16%
Technology 21,597.66-184.57-0.85%
SHARIAH TOP40 2,812.53-30-1.06%
FTSE/JSE SHARIAH ALL2,883.41-30-1.03%
COAL MINING21,897.03-309-1.39%
FTSE JSE Fledgling 4,435.26-15-0.34%
FTSE/JSE Alt X 1,103.85-21-1.85%
RESOURCE 26,135.20-317-1.20%
DIVIDEND PLUS160.22-1-0.80%
FTSE/JSE RAFI 406,057.60-36-0.58%
Capped Top 4013,699.02-82-0.60%
Capped All Share14,785.06-88-0.59%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
24 Aug 2011BHPBILLJune 2011 (Final)
24 Aug 2011BHPBILL5June 2011 (Final)
24 Aug 2011BLUETELMay 2011 (Final)
24 Aug 2011CBHJune 2011 (Final)
24 Aug 2011DEFCAPJune 2011 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
ADVTECH11-08-2211-09-0911-09-19R 0.0950
SA CORP11-08-1911-09-1611-09-26R 0.1435
CLIENTELE11-08-1911-09-0211-09-12R 0.5350
TRENCOR11-08-1811-09-0911-09-19R 0.5000
NORTHAM11-08-1811-09-0911-09-19R 0.1000
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ABSABANK-P11-08-0211-08-1911-08-29R 28.5830
FIRSTRANDB-P11-08-0411-08-1911-08-29R 3.0516
ABSA11-08-0211-08-1911-08-29R 2.9200
NEDBANK-P11-08-0111-08-1911-08-29R 0.3347
CAPITAL11-08-0211-08-1911-08-29R 0.3136

Upcoming AGMs**
CodeCompany NameDateStatus
PKHProtech Khuthele Holdings Ltd23/08/2011Unconfirmed
CDZCadiz Holdings Ltd24/08/2011Confirmed
ANSAnsys Ltd24/08/2011Confirmed
MPCMr Price Group Ltd25/08/2011Confirmed
MRPPMr Price Group Ltd25/08/2011Confirmed

Stock Exchange News Service
23/08/201117:10 Old Mutual Plc - Notification of transactions of directors, persons
23/08/201117:05 The Bidvest Group Limited - Update on partial sale of investment in Mumbai
23/08/201117:00 Amalgamated Electronic Corporation Ltd - Acquisition of The Secequip and
23/08/201116:45SSk - Stefanutti Stocks Holdings Limited - Trading statement
23/08/201116:37BIIVU - Ivuzi Investments Limited - Partial Capital Redemption
23/08/201116:29 Trustco Group Holdings Limited - Resignation of Company Secretary
23/08/201116:27 Brait S.A. Societe Anonyme - Results of extraordinary General Meeting
23/08/201116:27OML - Old Mutual Plc - Form 8.3
23/08/201116:26OML - Old Mutual Plc - Form 8.3
23/08/201116:26 Country Bird Holdings Limited - Audited results for the year ended
23/08/201115:25 Vox Telecom Limited - Share dealings by a director of a major
23/08/201115:20 Vukile Property Fund Limited - Dealing in securities by a director
23/08/201115:10BIIIPL - iNguza Investments (Proprietary) Limited - Listing of New Financial
23/08/201113:32 Convergenet Holdings Limited - Director`s dealings in securities
23/08/201113:29 Business Connexion Group Limited - Change in executive responsibilities
23/08/201113:22 Austro Group Limited - Dealings in securities
23/08/201113:08 Exxaro Resources Limited - Trading of Exxaro ordinary shares on behalf of
23/08/201112:53 Exxaro Resources Limited - Trading of Exxaro ordinary shares on behalf of
23/08/201112:52BIFR1 - FirstRand Bank Limited - Listing of Tap Issue
23/08/201112:49 Capitec Bank Holdings Limited - Dealing in securities by a director
23/08/201112:43 Nutritional Holdings Limited - Appointment of independent Non-executive
23/08/201112:35 Super Group Limited - Dealing in securities by Super Group Share
23/08/201112:32 Mercantile Bank Holdings Limited - Unaudited disclosure in terms of
23/08/201112:30 Impala Platinum Holdings Limited - Zimbabwean Indigenisation and
23/08/201112:28INL/INP - Investec Limited/ Investec plc - Form 8 (DD)
23/08/201112:23INL/INP - Investec Limited/Investec plc - Form 8 (DD)
23/08/201111:44SCIB/MTNSTF - The Standard Bank Of South Africa Limited - Dividend announcement
23/08/201111:43SCIB/NHMSIC - The Standard Bank of South Africa Limited - Dividend announcement
23/08/201111:42SCIB : HARSTE - The Standard Bank Of South Africa Limited -
23/08/201111:41SCIB/NHMSID - The Standard Bank of South Africa Limited - Dividend
23/08/201111:40SCIB - Standard Bank - Notice of expiry of Standard Bank share instalments
23/08/201111:16 OneLogix Group Limited - Audited condensed results for the year ended 31
23/08/201111:15 Cullinan Holdings Limited - Changes to the board and appointment of
23/08/201111:00 Iliad Africa Limited - Unaudited results for the six months ended 30
23/08/201110:30 WG Wearne Limited - Change to the board
23/08/201110:15CLN191 - The Standard Bank of South Africa Limited - New Financial
23/08/201109:50INL/INP - Investec Limited/ Investec plc - Disclosure in accordance with Rule
23/08/201109:44 Optimum Coal Holdings Limited - Trading statement
23/08/201109:43CLN000130 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:41CLN000136 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:40CNL000126 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:39CLN000159 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:38CLN000074 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:37CLN000135 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:36CLN000134 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:35CLN000152 - The Standard Bank Of South Africa Limited - Interest Rate
23/08/201109:33 Rebosis Properties Limited - Dealing in securities
23/08/201109:26BIEDC1 - Edcon (Proprietary) Limited - Release of quarterly results
23/08/201109:00 Redefine Properties International Limited - Admission to the official
23/08/201109:00 Shoprite Holdings - Preliminary Results For The 52 Weeks Ended June 2011
23/08/201108:30 Kelly group limited - Trading statement for the year ended 30 September
23/08/201108:30GLD - NewGold Issuer Limited - Partial de-listing of Newgold debentures
23/08/201108:22 BSI Steel Limited - Dealing in securities by a director
23/08/201108:15 New Europe Property Investments plc - Dealing in securities
23/08/201108:00 New Europe Property Investments plc - Dealing in Securities
23/08/201107:10 British American Tobacco p.l.c - Transaction in own shares
23/08/201107:10SYN859 - Synthesis Funding Limited - New Financial Instrument Listing
23/08/201107:06 Eqstra Holdings Limited - Change to the board of directors
23/08/201107:06BRT - Brimstone Investment Corporation Limited - Unaudited Results for the Six
23/08/201107:05 Gijima Group Limited - Audited results for the year ended 30 June 2011
23/08/201107:05 Eqstra Holdings Limited - Audited abridged year-end results for the year
23/08/201107:05 Esorfranki Limited - Notification of company roadshow

Click here for more SENS news