Tuesday, 20 December 2011 - 20:00
John Mauldin recently wrote a book called “Endgame” which is about the end of the debt supercycle and how it changes everything. I found it to be a very interesting read.
One of his first arguments why Europe and most of the West are in such a bad place is due to simple formula that defines the growth in Gross Domestic Product (GDP):
Change in GDP = Change in Population + Change in Productivity
In order to grow your economy you only have two ways to do it, there is no other clever way. You can’t borrow yourself out of the problem and you can’t let other nations work for you while you sit around doing nothing.
Change in Population
It is common knowledge that most of the nations in the West sit with an older population nearing retirement with few productive years left. Contrast this to India, China, and Africa with a massive younger population with many years still to produce products for their nation.
Below is a graph of China’s population pyramid. It is clear to see that the majority of the population is aged between 20 and 45. It is also clear to see how the one-child-policy is affecting the younger ages. This will definitely be a problem for China in years to come. A small young population has to work very hard to support a large old population. This is exactly what we currently have in the West with the “babyboom generation” now entering retirement age.
For further details refer to http://en.wikipedia.org/wiki/Population_pyramid
Change in Productivity
Well, sorry to say but there is no replacement for hard work. We need to work smarter and harder in order to increase productivity. Every decade USA employees work 1 year more than South African employees (i.e. 10% more). This is purely a result of South Africa’s more generous public holiday numbers and average annual leave when compared to the USA.
Mr Mauldin looked at an interesting study by the Kauffman Foundation. The study looked at the type of firms in the private sector that create the most jobs. (It is also a well-known fact that governments are not there to create jobs but instead should only create the healthy environment for the private sector to flourish so that it, in turn, can create jobs.)
The Kauffman Foundation focused their study on the USA from 1992 to 2005. The study shows that by far the most jobs are created by start-ups. Yes it is true that 50% of start-ups don’t make it after 5 years but they are still the best job creators. The graph below shows that start-ups created, on average, 3 million new jobs in the USA in their first year. The older the firms are the fewer jobs they create. Therefore as the Kauffman Foundation says “… we don’t count on the Intels or Microsofts to create employment: we need entrepreneurs.” I feel like changing President Clinton’s slogan from “It is about the economy dummy” to “It is about the entrepreneur dummy”.
Source: Business Dynamic Statistics, Tim Kane
For further details refer to:
May we go into 2012 with such a drive in South Africa to work harder and smarter and support to the start-ups of the new year.
This is Seed’s last newsletter for 2011. May you have a blessed Christmas with your family and loved ones. Travel safe and keep well, we’ll see you again in 2012.
021 9144 966
Tue, 20 Dec 2011
Revenue for the year ended August 2011 dropped to R27.9 million (R33.2 million) and gross profit fell to R21.3 million (R26.7 million). Loss before interest, tax, depreciation and amortisation was recorded at R6.8 million (profit of R4.5). The net attributable loss was at R9.3 million (profit of R2 million). Headline loss per share was 2.31cps (headline earnings of 0.52cps).
No dividend is proposed.
Although the group has experienced some improvements the cond. . .
World Markets (Spot Prices)
|JSE Top 40||17:00||28330.77||68.94||0.24%|
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The JSE Today
|Index Name||RP||Move||% Move|
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|Personal Goods ||407.79||3.49||0.86%|
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|SHARIAH TOP40 ||3,038.50||22||0.74%|
|FTSE/JSE SHARIAH ALL||3,106.86||21||0.69%|
|FTSE JSE Fledgling ||4,709.32||15||0.33%|
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|CAPPED PROPERTY ||315.16||0.32%|
|FTSE/JSE RAFI 40||6,584.63||12||0.18%|
|Capped Top 40||14,910.12||29||0.19%|
|Capped All Share||16,064.27||29||0.18%|
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Latest Consensus Changes**
|TSH||TSOGO SUN HOLDINGS LIMITE...||BUY||16 Dec|
|GRT||GROWTHPOINT PROPERTIES LI...||HOLD||16 Dec|
|SOL||SASOL LIMITED||BUY||16 Dec|
|ALT||ALLIED TECHNOLOGIES LIMIT...||HOLD||16 Dec|
|TRU||TRUWORTHS INTERNATIONAL L...||HOLD||16 Dec||
|Expected||Company Name||Fin. Date|
|21 Dec 2011||MARSHALL||September 2011 (Final)|
|21 Dec 2011||MARSHALL-||September 2011 (Final)|
|22 Dec 2011||JOHNDAN||September 2011 (Final)|
|22 Dec 2011||MAS||November 2011 (Q)|
|23 Dec 2011||KAIROS||August 2011 (Interim)|
|NAMPAK 6%P||11-12-08||12-01-20||12-01-30||R 0.0600|
|NAMPAK 6.5||11-12-08||12-01-20||12-01-30||R 0.0650|
|AF-OVR 6%PP||11-11-28||11-12-15||11-12-27||R 0.4900|
|REX TRUE6%||11-11-28||11-12-15||11-12-27||R 0.0600|
Stock Exchange News Service
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