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 The Sharenet Daily 
Tuesday, 08 October 2013 - 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)

Seed Weekly - Value Investing the Buffett Way: 1982 - 1986

The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do – Warren Buffett, 1982.

The previous newsletter on Warren Buffett’s tenets focussed on some background regarding the value investing philosophy, Benjamin Graham, Warren Buffett, and some of his core principles. Following from his first five letters (1977 – 1981), I worked through Berkshire Hathaway’s annual shareholders letters from 1982 to 1986. Here is some wisdom I learned.

During the 1980’s Berkshire had already grown to a large investment holding company and correspondingly Mr Buffett started to warn his shareholders that achieving Berkshire’s historical return of above 20% pa would be difficult to achieve. “The Iron law of business is that growth eventually dampens exceptional economics.”

Mr Buffett mentions that in order for Berkshire to continue to generate exceptional returns a few big ideas would be required as small ideas just won’t do, “Charlie Munger, my partner in general management, and I do not have any such ideas at present, but our experience has been that they pop up occasionally. (How’s that for a strategic plan?)”

Mr Buffett admits the fact that they have no idea - and never have had an idea on whether the market will go up, down, or sideways in the near or intermediate future. However, he sees the value of getting the economic cycle right for the long term. His job is to select businesses with economic characteristics allowing each dollar of retained earnings to be translated eventually into at least a dollar of market value. It is essential to buy into companies of exceptional quality. Sometimes this might be a rare occurrence and patience is required.

Sometimes being an active equity manager means to actively wait (i.e. doing nothing). During 1984 Mr Buffett mentioned “It’s been over ten years since it has been as difficult as now to find equity investments that meet both our qualitative standards and our quantitative standards of value versus price. We try to avoid compromise of these standards, although we find doing nothing the most difficult task of all.”

One can pay a premium for a valuable company – but the price is essential! Paying too much for a share can undo the effects of a subsequent decade of favourable business developments. One must think as a business owner and invest for the long term. When this is done, one needs to keep an eye focused on business results, and not market prices, since these can be volatile.

A lot was learned reading these five years of letters. Mr Buffett, as always, also mentions some of his delights, like drinking Cherry cokes, as well as some of his dislikes. He has a general distrust of investment bankers (“don’t ask the barber whether you need a haircut”.) He heavily criticises academics for teaching the efficient market hypothesis and he dislikes Wall Street and its stockbrokers.

“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.” Contrary to some Wall Street firms, Berkshire holds on to what is good and thereby doesn’t sell shares just because they are at very high prices. The underlying business means more than its share price. Little fear is visible in Wall Street, instead euphoria prevails and Mr Buffett is of opinion that one should “be fearful when others are greedy and to be greedy only when others are fearful.”

To conclude, as Benjamin Graham once said: “Investment is most intelligent when it is most business-like.” This is a principle that we at Seed practice whenever making investments on behalf of our clients.

Keep well,

Lourens Rabé

021 914 4966

Tue, 08 Oct 2013
Top News
South Africa's rand rose against the dollar on Tuesday but the market remained subdued as the U.S. government shutdown dragged on.  Full story

Gold prices rose on Tuesday as signs of movement in the U.S. fiscal standoff did little to allay fears the country may still be pushed towards an unprecedented default. The United States faces an Oct. 17 deadline to raise its $16.7 trillion debt limit. On Monday, a White House spokesman said  Full story
Hundreds of Muslim Brotherhood supporters chanted "Down with the military government" outside Cairo University on Tuesday, defying Egypt's army-backed authorities despite deadly clashes with security forces two days earlier.  Full story
Argentine President Cristina Fernandez had successful surgery on Tuesday to remove blood from the surface of her brain and is expected to make a full recovery, a government spokesman said.  Full story
With its scrubland, unpaved roads and mud brick huts, the Jebel Amer area in Darfur, western Sudan, can look like a poor and desolate place. Under the ground, though, lies something sought by people everywhere: gold.  Full story
Interest rates on one-month U.S. government debt hit their highest levels in five years on Tuesday as anxiety rose over whether the United. . .  Full story
U.S. stocks fell on Tuesday, led by tech stocks that have made some of the biggest gains this year, as the lack of. . .  Full story
European shares fell on Tuesday as a U.S. budget deadlock unnerved investors and medical technology group Getinge led a sellof in the healthcare. . .  Full story
Britain's top share index slipped to three-month lows on Tuesday as weak data and downbeat analyst comments hit retailers and the fiscal deadlock. . .  Full story

U.S. stocks were near session lows on Tuesday and a gauge of equity market anxiety rose to its highest in more than three. . .  Full story
U.S. stocks opened flat on Tuesday on faint signs of progress to resolve the fiscal standoff in Washington, which has closed much of. . .  Full story
European shares fell on Tuesday, with medical technology group Getinge slumping after a profit warning as the U.S. budget stalemate weighed broadly on stock. . .  Full story
Hong Kong shares rebounded on Tuesday, buoyed by a solid performance in China's markets as investors cheered strong Golden Week holiday spending in. . .  Full story
SA Business
Growth in sub-Saharan Africa should accelerate in 2014, although regional powerhouse South Africa remains vulnerable to weak investor and consumer confidence and the impact of labour unrest, the IMF said on. . .  Full story
Gold extended gains to a second session on Tuesday as the U.S. government shutdown dragged on and a deadline to raise the national debt ceiling loomed, bolstering the metal's safe-haven appeal.. . .  Full story
Gold rose nearly 1 percent on Monday as the ongoing U.S. government shutdown and no signs politicians were willing to resolve a budget impasse and raise the debt-ceiling limit boosted the metal's safe-haven appeal.. . .  Full story

Shares in South African fixed-line operator Telkom SA hit their highest level in 20 months on Tuesday, after it said it. . .  Full story
South Africa's Treasury sold a total 2.35 billion rand of its 2023, 2031 and 2037 government bonds on Tuesday.. . .  Full story
Mauritania has discovered new iron ore resources estimated at about 830 million tonnes near its existing mining operation at Zouerate in. . .  Full story
South African mobile operator Vodacom Group said on Monday the telecom regulator's plan to cut in half by next year the. . .  Full story

Shares of South African mobile operators Vodacom Group and MTN Group fell sharply on Monday after the telecoms regulator said it planned to cut by 75 percent the fees they can charge rivals to use their network.. . .  Full story
Sub-Saharan Africa's economic growth should increase to 5.3 percent next year, with strong private and public investment underpinning the region's robust performance, the World Bank said on Monday.. . .  Full story
Company News
Keaton shareholders were referred to the announcements released by Keaton on SENS on Monday, 26 August 2013, wherein it was announced,. . .  Full story
The following individuals have been appointed as directors of both BCX and Business Connexion (Pty) Ltd. with immediate effect: *Alex Darko *Mike Ettling *John. . .  Full story
Shareholders are advised that the annual integrated report incorporating the report of the directors, the audited financial statements for the year. . .  Full story
DRDGold hereby advises its shareholders that some 600 employees at its Ergo operation downed tools at the start of the day. . .  Full story

Trencor drew attention to the following news release issued by Textainer Group Holdings Ltd., in which Trencor has a 48.4% beneficiary. . .  Full story
Business Day reported that Pick n Pay set in motion a mobile app granting customers access to Smart Shopper kiosk. . .  Full story
Shareholders are referred to: *Wescoal's Integrated Report posted on the Company's website on 16 September 2013; and *the Summarised Report printed. . .  Full story
The safety performance at both group collieries remained excellent for the period. Vanggatfontein reporting a LTIFR of 0.10 and Vaalkrantz a. . .  Full story
Company Results
Revenue amounted to R1.8 billion (R79.3 million). Total income rose to R127.9 million (R71.9 million).Net attributable profit decreased to R104.1. . .  Full story
Revenue declined to USD40.4 million (USD51.8 million). A loss from operations of USD4.5 million (profit of USD1.6 million) was made. A. . .  Full story
Revenue for the interim period grew to R1.0 billion (R976.7 million) and operating profit rose to R56.0 million (R48.6 million). Total. . .  Full story
Revenue increased by 8% to R13.4 billion (R12.5 billion). Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 4% to. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0043253.61-472.09-1.08%
JSE Top 4017:0038578.53-472.35-1.21%
JSE Gold17:001186.05-5.28-0.44%
JSE Financial17:0031615.91-255.34-0.80%
JSE Industrial17:0057321.91-617.69-1.07%
JSE Indust 2517:0050130.82-641.72-1.26%
JSE Resource17:0048160.52-658.08-1.35%
DJ Futures19:5214760.00-91.00-0.61%
DJ Ind19:5814830.92-105.32-0.71%
SP 50019:581660.96-15.16-0.90%
FTSE 10017:356365.83-71.45-1.11%
All Ords07:395148.10-12.50-0.24%
NZSE 5006:484738.68-17.36-0.37%
NameTimeRPMove% Move
Gold $19:591323.67.980.07%
Gold R19:5913223.26-3.21-0.02%
Gold R/kg19:58425040-571-0.13%
Silver $19:5922.3900.04000.18%
Platinum $19:591402.004.500.32%
Palladium $19:59713.1010.901.55%
Brent Crude19:58110.32.860.79%
Rand / Dollar19:599.9906-0.0093-0.09%
Rand / Pound19:5516.0279-0.0316-0.20%
Rand / Euro19:5513.5582-0.0205-0.15%
Rand / NZD19:598.2910-0.0166-0.20%
Rand / AUD19:559.4190-0.0103-0.11%
Yen / Dollar19:5996.89800.19700.20%
Euro / Dollar19:590.73680.00020.03%
Dollar / Euro19:591.3572-0.0004-0.03%
Pound / Dollar19:550.62160.00040.06%

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The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 INDEQTY  510459.68.%10000
2 CADIZ  140129.38.%61000
3 ASTRAPAK  660447.14.%101343
4 BLUETEL  849526.52.%3150054
5 KEATON   19594.84.%250223
6 INTEWASTE  11454.59.%196198
7 TELKOM  27621124.23.%4046332
8 POYNTING  15553.33.%55470
9 SAPPI  2745863.23.%1690455
10 AVENG  2657823.18.%1540420
11 PINNACLE  2299693.09.%532859
12 GROUP-5  44501262.91.%382715
13 PIKWIK  1898482.59.%171812
14 CBH  32782.51.%11700
15 MRHLD  2808682.48.%1381425
16 WBHO  166503752.30.%54610
17 RAUBEX  2360502.16.%711916
18 LEWIS  67401402.12.%213345
19 ACUCAP  4485922.09.%167399
20 CAPEVINH  735152.08.%549938

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Major Moves Down
SharenameSaleMove% MoveVolume
1 DIAMONDCP  160-36-18.37.%65150
2 WCC  230-35-13.21.%61525
3 ALERT  135-20-12.90.%4712
4 CENRAND  417-58-12.21.%404
5 NUWORLD  1626-224-12.11.%5500
6 ONELOGIX  325-39-10.71.%52138
7 GOLDONE  190-20-9.52.%9810
8 MSHolding  130-12-8.45.%72619
9 FINBOND  211-13-5.80.%58377
10 DELTA  649-36-5.26.%14900
11 ITLTILE  710-34-4.57.%19425
12 ASSORE  41203-1797-4.18.%105154
13 VALUE  760-30-3.80.%1800
14 NETCARE  2421-94-3.74.%1813047
15 CMH  1350-50-3.57.%3600
16 REDEFINTL  785-25-3.09.%219028
17 SPAR  12200-356-2.84.%260568
18 BELL  2300-67-2.83.%4003
19 ABIL  1839-50-2.65.%1832068
20 NET1UEPS  11900-320-2.62.%180

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New Highs
SharenameSaleHighMove% MoveVolume
1 INDEQTY  510510459.68.%10000
2 TELKOM  276227991124.23.%4046332
3 CAPEVINH  735750152.08.%549938
4 HCI  13860139421731.26.%136101
5 TSOGO-SUN  27822900311.16.%231470
6 GRINDROD  25502572250.99.%1905516
7 DISTELL  1304013596650.50.%100648
8 STEINHOFF  365037050.5135165
9 WCC  230275-35-13.21.%61525

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New Lows
SharenameSaleLowMove% MoveVolume

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Index Summary
Index NameRPMove% Move
Top 4038,578.53-472.35-1.21%
Mid Cap57,701.58-297.44-0.51%
Small Cap48,620.0955.060.11%
Resource 2048,160.52-658.08-1.35%
Industrial 2550,130.82-641.72-1.26%
Financial 1511,903.13-104.09-0.87%
Financial & Ind. 3052,992.04-618.86-1.15%
All Share43,253.61-472.09-1.08%
Oil & Gas 36,674.16-102.92-0.28%
Mining 28,947.60-451.91-1.54%
Gold Mining1,186.05-5.28-0.44%
Platinum Mining47.56-.09-0.19%
GENERAL MINING8,303.61-153.46-1.81%
Oil & Gas Producers 19,719.02-55.34-0.28%
Basic Materials 25,832.42-394.86-1.51%
Chemicals 23,211.6372.400.31%
Forestry & Paper 27,451.92-415.67-1.49%
Industrial Metals 23,878.49-482.53-1.98%
Industrials 42,893.39-97.83-0.23%
General Industrials 127.43-1.00-0.78%
Consumer Goods 52,738.10-628.59-1.18%
Automobiles & Parts 7,540.6567.940.91%
Household Goods248.0900.00%
Health Care 73,997.27-1190.81-1.58%
Beverages 164.48-2.39-1.43%
Index NameRPMove% Move
Food Producers 71,128.55-796.64-1.11%
Personal Goods 997.66-15.98-1.58%
Consumer Services 10,211.30-57.94-0.56%
General Retailers 64,588.58-374.25-0.58%
Travel & Leisure 5,613.4230.820.55%
Media 205.87-1.13-0.55%
Support Services 2,616.593.890.15%
Telecommunications 8,981.40-192.64-2.10%
Financials 31,615.91-255.34-0.80%
Banks 55,379.54-421.86-0.76%
Non-life Insurance 49,510.53125.060.25%
Life Insurance 29,415.86-233.67-0.79%
General Financial 2,891.02-34.99-1.20%
Technology 43,754.26176.520.41%
SHARIAH TOP40 3,603.43-55-1.51%
FTSE/JSE SHARIAH ALL3,738.13-49-1.29%
COAL MINING20,308.21-501-2.41%
FTSE JSE Fledgling 5,977.68-21-0.35%
FTSE/JSE Alt X 1,040.93-20-1.90%
CAPPED PROPERTY 419.99-0.66%
RESOURCE 26,348.88-350-1.31%
DIVIDEND PLUS212.93-2-0.81%
FTSE/JSE RAFI 408,519.97-95-1.10%
Capped Top 4020,440.66-242-1.17%
Capped All Share21,916.95-236-1.07%
JSE TABACO 6,590.89290.43%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
09/10/2013BEIGEJune 2013 (Final)
09/10/2013BEIGEPJune 2013 (Final)
09/10/2013BEIGEPREF2June 2013 (Final)
09/10/2013HOLDSPORTAugust 2013 (Interim)
10/10/2013VERIMARKAugust 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
BARWORLD6%P07/10/1325/10/1304/11/13ZAR 0.0600
PHUMELELA01/10/1318/10/1328/10/13ZAR 0.6000
NTC PREF01/10/1325/10/1304/11/13ZAR 3.5159
TELEMASTR30/09/1318/10/1328/10/13ZAR 0.0050
BLACKSTAR30/09/1325/10/1322/11/13GBP 0.0050
Ex Div**
Share NameDec-DateLDTPay-DateAmount
SASOL09/09/1304/10/1314/10/13ZAR 13.3000
CASHBIL17/09/1304/10/1314/10/13ZAR 1.9100
ASPEN11/09/1304/10/1314/10/13ZAR 1.3100
SASFIN11/09/1304/10/1314/10/13ZAR 1.0800
RMBH11/09/1304/10/1314/10/13ZAR 1.0450

Upcoming AGMs**
CodeCompany NameDateStatus
AERAmalgamated Electronic Corporation Ltd.11/10/2013Confirmed
TSHTsogo Sun Holdings Ltd.14/10/2013Confirmed
ADWAfrican Dawn Capital Ltd.15/10/2013Confirmed

Stock Exchange News Service
08/10/201317:50BEIGE HOLDINGS LIMITED - Resignation of Director
08/10/201317:30FORTRESS INCOME FUND LIMITED - Full Capital Redemption -FIFC03
08/10/201317:05A E C I LIMITED - Announcement: general presentation on website
08/10/201317:00THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited New Fin...
08/10/201316:50KEATON ENERGY HOLDINGS LIMITED - Renewal of Cautionary Announcement
08/10/201316:50JSE LIMITED - GEN - Announcement in relation to the Redemption of SBR003 Retail ...
08/10/201316:25BUSINESS CONNEXION GROUP LIMITED - Appointment of new independent Non-executive ...
08/10/201315:54ZEDER INVESTMENTS LIMITED - Appointment Of Non-Executive Director
08/10/201315:52THE BIDVEST GROUP LIMITED - Director's Dealings
08/10/201315:52FIRSTRAND BANK LIMITED - Release of annual financial statements
08/10/201315:34FIRSTRAND LIMITED - No change statement and notice of annual general meeting
08/10/201315:30DRDGOLD LIMITED - Management Refuses Nums Eleventh-Hour Wage Negotiation Demands...
08/10/201315:13EQSTRA HOLDINGS LIMITED - Dealing in securities by company secretary
08/10/201315:00ABSA BANK LIMITED - ABN47 - Interest Rate Reset
08/10/201315:00ATLATSA RESOURCES CORPORATION - Update on Restructure Plan: South African Reserv...
08/10/201314:45SOVEREIGN FOOD INVESTMENTS LIMITED - Dealings In Securities By A Director Of A S...
08/10/201314:40INDWA INVESTMENTS LIMITED - New Instrument Listings - INA403 and INA404
08/10/201314:22ATTACQ LIMITED - Results of the Private Placement, Listing on the Main Board of ...
08/10/201314:15CAPITAL & COUNTIES PROPERTIES PLC - Notification of Interim Management Statement
08/10/201314:10DIGICORE HOLDINGS LIMITED - Dealing in securities by a director
08/10/201314:00RMB CIS MANCO (PTY) LIMITED - Partial Delisting Of Rmb Inflation-X Securities
08/10/201312:45GROUP FIVE LIMITED - Dealing in securities by a director and a director of a maj...
08/10/201312:30COMPU-CLEARING OUTSOURCING LIMITED - Director's dealings in securities
08/10/201312:28PSG FINANCIAL SERVICES LIMITED - Trading Statement
08/10/201311:30TRENCOR LIMITED - Trencors Textainer announces date for the third quarter 2013 e...
08/10/201311:15STELLA VISTA TECHNOLOGIES LIMITED - Renewal of Cautionary Announcement
08/10/201311:00TELKOM SA SOC LIMITED - Trading Statement
08/10/201310:01WESCOAL HOLDINGS LIMITED - Notification of proposed amendment to special resolut...
08/10/201310:00THE THEKWINI WAREHOUSING CONDUIT (RF) LTD - New Financial Instrument Listing - T...
08/10/201309:42DISCOVERY LIMITED - Dealing in securities by a director
08/10/201309:30NEW GOLD ISSUER LIMITED - NGPLT - Listing of additional NewGold Platinum Debentu...
08/10/201309:00KEATON ENERGY HOLDINGS LIMITED - Quarterly production update for the period ende...
08/10/201308:00DATACENTRIX HOLDINGS LIMITED - Unaudited condensed consolidated interim results ...
08/10/201308:00KIBO MINING PLC - Management Team and Financial Advisor Appointed to Rukwa Coal ...
08/10/201307:25ALLIED ELECTRONICS CORPORATION LTD - Unaudited consolidated interim results for ...
08/10/201307:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

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