Having trouble reading this email? View in your web browser
 The Sharenet Daily 
Tuesday, 28 January 2014 - 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)

Value investing the Buffett way: 1992 ? 1997

“We think the very term "value investing" is redundant. What is "investing" if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value - in the hope that it can soon be sold for a still-higher price - should be labelled speculation (which is neither illegal, immoral nor - in our view - financially fattening).”

Warren Buffett mentioned in his 1992 letter that when investing, practice does not make perfect but rather that practice makes permanent. It pays to be active, interested and open-minded when investing, but patience is essential. Instead of looking for fair businesses at good prices, rather take your time to buy good businesses at fair prices.

One should always be open to new ideas. Berkshire, for example, included holdings from the shoe industry in its portfolio, at that time Mr Buffett mentioned he probably would’ve never thought of it five years prior. It is again stressed to look at intrinsic value rather than book value. These two often diverge during the short run. Intrinsic value equals the present value of all future cash flows that can be taken out of a business during its remaining life, whereas book value includes retained earnings.

He sees “risk” as the possibility of loss or injury and not volatility, as it’s widely defined (particularly in academic circles). “It is better to be approximately right than precisely wrong.”

In his opinion, the real risk that an investor must assess is whether his after tax returns from an investment will match inflation over the prospective holding periods plus a modest real return on the initial stake. In order to achieve this, the principles to be evaluated include the certainty of:
• economic characteristics of the business;
• company management (to operate the business to its potential and to wisely employ its cash flows;
• management that can be trusted to run the business to reward the shareholders rather than themselves;
• the purchase price of the business;
• the levels of taxation and inflation that will be experienced and that will determine the degree by which an investor's purchasing-power return is reduced from his gross return.

“You know it when you see it – you don’t need complex equations or price histories.”

Berkshire ignores political and economic forecasts, which are wrong most of the time, and has proven to be an expensive distraction for many investors and businessmen. Buffett mentions that Berkshire usually makes its best purchases when apprehensions about some macro event are at a peak, “Fear is the foe of the faddist, but the friend of the fundamentalist.”

He looks for managers that earn extraordinary returns from what appear to be ordinary businesses. His goal is then to acquire either part or all of the business that is understandable, has sustainable underlying economics, and is run by managers whom he likes, admires, and trusts. Before looking at a new investment one should consider adding to old ones. If a business is attractive enough to buy once, it may well pay to repeat the process.

Qualitative analysis is of immense importance, as seen in factors such as good corporate governance. “Directors should speak their mind and persuade other members for the greater good. The requisites for board membership should be business savvy, interest in the job, and owner-orientation. Not because they’re prominent or add diversity”.

Interestingly, in the late 1990’s Mr Buffet makes his infamous concerns regarding tech companies. He exclaims the importance of a “margin of safety” that Ben Graham identified as the cornerstone of intelligent investing. He called himself a life-long sufferer from technophobia (admittedly Berkshire did start uploading their annual reports to the internet in the 1990’s – but as a means of saving printing and distribution costs). He does not invest in tech stocks because he does not understand the business model – plain and simple.

It is evident from this report that Warren Buffett seeks to focus his time and effort on what he knows. This is his “circle of competence”. Investors would do well to only invest where they have expertise and resist investing purely on the back of a ‘good story’. At Seed we don’t claim to ‘know it all’, but rather focus on our areas of expertise to provide solid inflation beating returns for our clients.

Kind regards,

Lourens Rabé

021 914 4966

Tue, 28 Jan 2014
Top News
Stock markets steadied on Tuesday after three days of intense selling as investors waited to see if Turkey, one of the epicenters of the recent rout, would hike interest rates to defend its battered lira.  Full story

South African shares steadied on Tuesday with twitchy global investors taking a pause from dumping risky emerging market assets and as oversold stocks were snapped up.  Full story
Ukrainian Prime Minister Mykola Azarov resigned on Tuesday while deputies loyal to President Viktor Yanukovich, acting to calm violent street protests, back-tracked and overturned anti-protest laws they rammed through parliament 12 days ago.  Full story
A deal to lift an armed blockade of Libyan oil ports and restart exports could be possible within two weeks after talks with the government advanced on key demands, a senior leader of the protest movement said.  Full story
India is set to become the first country since World War Two to buy a military aircraft from Japan, helping Prime Minister Shinzo Abe dismantle a ban on weapons exports that has kept his country's defence contractors out of foreign markets.  Full story
European shares snapped a three-day fall on Tuesday, bouncing back on better growth prospects for Spain, encouraging updates from some industrial companies and a. . .  Full story
Britain's blue chip shares picked up on Tuesday from five-week lows after finding strong technical support in the face of easing tensions in. . .  Full story
U.S. stocks edged up on Tuesday after a three-session decline on the S&P 500, but an unexpected drop in durable goods orders in. . .  Full story
Gold prices eased on Tuesday, extending the previous session's 1 percent drop, as global equities rebounded from their lowest in over a month. . .  Full story

Wall Street edged modestly higher on Tuesday after a three-session decline on the S&P 500, but market sentiment was weighed by an unexpected. . .  Full story
U.S. stock index futures pared gains on Tuesday after data showed orders for long-lasting U.S. manufactured goods unexpectedly fell in December as did. . .  Full story
European shares bounced back from near one-month lows on Tuesday, helped by a rise in Spanish banks and higher profits at German engineer. . .  Full story
European shares bounced back from near one-month lows on Tuesday, helped by a rise in Siemens after the German engineer posted higher. . .  Full story
SA Business
South Africa's rand stabilised against the dollar on Tuesday a day after sliding to a five-year low, as a sell-off of. . .  Full story
South African maize farmers have planted 2.71 million hectares for 2014 compared to 2.78 million hectares last year, a government agency. . .  Full story
Aquarius Platinum Ltd, the world's fourth-largest platinum miner, reported a 7 percent rise in second-quarter output attributable to the company, despite. . .  Full story
Government-brokered talks between South Africa's AMCU union and the world's top three platinum producers ended on Monday with no breakthrough in. . .  Full story

Turkey's lira extended gains on Tuesday on bets of an aggressive interest rate hike, while other emerging market currencies and stocks rose on growing. . .  Full story
Zimbabwe's central bank on Tuesday published an interest rate range guide for the money market to try and rein in large. . .  Full story
From the rattle of weaving looms and footwear stitching machines in northern Portugal to the rumble of trucks shipping high-quality paper. . .  Full story
From the rattle of weaving looms and footwear stitching machines in northern Portugal to the rumble of trucks shipping high-quality paper across the. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0045724.70-26.00-0.06%
JSE Top 4017:0041085.10-5.54-0.01%
JSE Gold17:001234.17-35.93-2.83%
JSE Financial17:0032259.43-4.95-0.02%
JSE Industrial17:0059877.36-98.31-0.16%
JSE Indust 2517:0052617.73-99.73-0.19%
JSE Resource17:0053600.4986.240.16%
DJ Futures19:5815840.0052.000.33%
DJ Ind19:5815908.3670.480.45%
SP 50019:581789.527.960.45%
FTSE 10018:356572.3321.670.33%
All Ords07:415188.00-66.30-1.26%
NZSE 5006:484848.44-5.36-0.11%
NameTimeRPMove% Move
Gold $19:591250.50-5.00-0.40%
Gold R19:5913844.93-100.00-0.72%
Gold R/kg19:58444969-5411-1.20%
Silver $19:5919.4800-.1500-0.76%
Platinum $19:591407.601.600.11%
Palladium $19:59715.20-4.30-0.60%
Brent Crude19:58107.19-.69-0.64%
Rand / Dollar19:5911.0724-0.0391-0.35%
Rand / Pound19:5518.2971-0.0937-0.51%
Rand / Euro19:5515.1121-0.0815-0.54%
Rand / NZD19:599.1462-0.0036-0.04%
Rand / AUD19:559.71020.00330.03%
Yen / Dollar19:59102.90000.27300.27%
Euro / Dollar19:590.73200.00060.08%
Dollar / Euro19:591.3661-0.0010-0.07%
Pound / Dollar19:550.60330.00040.07%

Click here for the Sharenet Spot Price page
The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 MMG  990808.79.%5680
2 ALERT  150128.70.%3773
3 CADIZ  125108.70.%6850
4 DIGICOR  190158.57.%2000
5 CMH  1349907.15.%100
6 BRIMSTON  1370705.38.%100
7 NASPERSN  10720037373.61.%3350395
8 PIKWIK  2100602.94.%160089
9 PETMIN  18552.78.%631823
10 LIFEHC  3683982.73.%2521412
11 OCEANA  84632232.71.%11207
12 NETCARE  2315592.62.%3325501
13 SANTOVA  11632.61.%221104
14 SABVEST  2051512.55.%1000
15 ARCMITTAL  4000982.51.%191273
16 TORRE  28772.50.%5046
17 DELPROP  830202.47.%241795
18 TSOGO-SUN  2590602.37.%976829
19 ONELOGIX  31572.27.%45554
20 HOWDEN  45001002.27.%1450

Click here for more Major Moves...
Major Moves Down
SharenameSaleMove% MoveVolume
1 WCC  170-24-12.37.%33834
2 OANDO  150-15-9.09.%141823
3 RARE  600-50-7.69.%1000
4 ADAPTIT  545-42-7.16.%697892
5 ASTRAPAK  700-50-6.67.%169401
6 DAWN  931-64-6.43.%149726
7 MSHolding  283-17-5.67.%26254
8 MASTDRILL  1000-55-5.21.%330
9 ZCI  475-24-4.81.%1000
10 CONVERGE  120-6-4.76.%40000
11 DCENTRIX  435-20-4.40.%107348
12 ZEDER  414-15-3.50.%2812369
13 ANGGOLD  15255-545-3.45.%1722944
14 HARMONY  3096-101-3.16.%914589
15 GRANPRADE  460-15-3.16.%658363
16 PAN-AF  254-8-3.05.%1785419
17 NAMPAK  3671-114-3.01.%3733577
18 ARM   21100-650-2.99.%307322
19 MPACT  2580-78-2.93.%166151
20 EXXARO  15180-417-2.67.%417745

Click here for more Major Moves...

New Highs
SharenameSaleHighMove% MoveVolume
1 SABVEST  20512051512.55.%1000
2 FORTRESSB  10601060201.92.%136590
3 INTUPROP  58405846520.90.%671115
4 POYNTING  235245-5-2.08.%69540

Click here for more Major Moves...
New Lows
SharenameSaleLowMove% MoveVolume
1 FORTRESSA  1395135150.36.%722418

Click here for more Major Moves...

Index Summary
Index NameRPMove% Move
Top 4041,085.10-5.54-0.01%
Mid Cap58,617.71-133.13-0.23%
Small Cap49,717.75-265.09-0.53%
Resource 2053,600.4986.240.16%
Industrial 2552,617.73-99.73-0.19%
Financial 1512,252.7020.710.17%
Financial & Ind. 3055,479.78-63.95-0.12%
All Share45,724.70-26.00-0.06%
Oil & Gas 41,121.56484.321.19%
Mining 32,113.11-33.13-0.10%
Gold Mining1,234.17-35.93-2.83%
Platinum Mining50.82.581.15%
GENERAL MINING9,349.849.450.10%
Oil & Gas Producers 22,110.30260.411.19%
Basic Materials 28,431.88-36.37-0.13%
Chemicals 24,643.43197.810.81%
Forestry & Paper 28,544.04-131.92-0.46%
Industrial Metals 23,689.41-244.28-1.02%
Industrials 42,574.01-116.09-0.27%
General Industrials 129.82-.44-0.34%
Consumer Goods 56,261.00-683.12-1.20%
Automobiles & Parts 9,873.04-101.90-1.02%
Household Goods312.7320.68%
Health Care 71,051.141076.671.54%
Beverages 178.69-3.81-2.09%
Index NameRPMove% Move
Food Producers 66,730.23-63.75-0.10%
Personal Goods 1,045.90-6.30-0.60%
Consumer Services 10,557.73226.012.19%
General Retailers 57,501.17157.330.27%
Travel & Leisure 5,617.5168.641.24%
Support Services 2,475.52-28.67-1.14%
Telecommunications 9,770.63-114.01-1.15%
Financials 32,259.43-4.95-0.02%
Banks 54,275.68270.310.50%
Non-life Insurance 46,325.36640.611.40%
Life Insurance 31,349.1418.450.06%
General Financial 3,118.08-27.39-0.87%
Technology 41,276.55-176.76-0.43%
SHARIAH TOP40 3,938.67-1-0.03%
FTSE/JSE SHARIAH ALL4,046.80-2-0.05%
COAL MINING19,190.19-527-2.67%
FTSE JSE Fledgling 6,364.22-34-0.52%
FTSE/JSE Alt X 1,250.76-9-0.74%
CAPPED PROPERTY 420.70-0.34%
RESOURCE 29,287.26380.13%
DIVIDEND PLUS210.58-1-0.35%
FTSE/JSE RAFI 409,096.1940.05%
Capped Top 4021,686.4920.01%
Capped All Share23,139.56-14-0.06%
JSE TABACO 7,044.39-138-1.92%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
31/01/2014ZCISeptember 2013 (Interim)
03/02/2014AMPLATSDecember 2013 (Final)
03/02/2014ANGLOPLATCCPDecember 2013 (Final)
03/02/2014HARMONYDecember 2013 (Interim)
03/02/2014HARMONY-PDecember 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
IMPL CONV24/01/1407/02/1421/02/14ZAR 25,000.0000
TOWER23/01/1407/02/1417/02/14ZAR 0.3300
FOORDCMPS20/01/1407/02/1417/02/14ZAR 0.5875
MARSHALL17/01/1431/01/1414/02/14USD 0.0180
ARGENT04/12/1320/03/1431/03/14ZAR 0.0700
Ex Div**
Share NameDec-DateLDTPay-DateAmount
TONGAAT11/11/1324/01/1406/02/14ZAR 1.5000
PNR FOODS25/11/1324/01/1403/02/14ZAR 0.8600
NETCARE18/11/1324/01/1403/02/14ZAR 0.4050
DON08/01/1424/01/1403/02/14ZAR 0.1600

Upcoming AGMs**
CodeCompany NameDateStatus
BAWBarloworld Ltd.29/01/2014Confirmed
BAWPBarloworld Ltd.29/01/2014Confirmed
TMTTrematon Capital Investments Ltd.29/01/2014Confirmed
CLSClicks Group Ltd.30/01/2014Confirmed
RDFRedefine Properties Ltd.30/01/2014Confirmed

Stock Exchange News Service
28/01/201417:30INVESTEC PLC - Transactions by a director of Investec plc and Investec Limited
28/01/201417:13TORRE INDUSTRIAL HOLDINGS LIMITED - Voluntary update and new cautionary announce...
28/01/201417:06THE STANDARD BANK OF SA LTD - New Financial Instrument Listing Announcement - CL...
28/01/201417:03THE STANDARD BANK OF SA LTD - New Financial Instrument Listing Announcement - CL...
28/01/201417:00BIOSCIENCE BRANDS LIMITED - Extension of provisional liquidation and further cau...
28/01/201416:45SANTOVA LIMITED - Dealing In Securities By Director Of A Major Subsidiary
28/01/201416:20HOSPITALITY PROPERTY FUND LIMITED - Notice of request for written consent of not...
28/01/201416:13A E C I LIMITED - Fulfillment Of Conditions Precedent
28/01/201416:00REDEFINE INTERNATIONAL PLC - Annex DTR3 - Notification of transactions of direct...
28/01/201415:55ESOR LIMITED - Dealing in securities by a director
28/01/201415:21GROUP FIVE LIMITED - Trading Statement
28/01/201415:15MMI HOLDINGS LIMITED - Disclosure of Significant Holding of MMI Holdings Limited...
28/01/201415:05FIRSTRAND BANK LIMITED - Interest Rate Reset - FRC61 and FRC76
28/01/201415:05TOYOTA FIN SERVICES (SA) LTD - Interest Rate Reset-TFS83
28/01/201414:50EFFICIENT GROUP LIMITED - Dealing in securities by a director of EFG
28/01/201414:05GROWTHPOINT PROPERTIES LIMITED - Interest Rate Reset-GRT05
28/01/201413:30ROCKCASTLE GLOBAL REAL EST CO LTD - Availability of abridged unaudited financial...
28/01/201413:20HOSPITALITY PROPERTY FUND LIMITED - Report on proceedings at the general meeting...
28/01/201413:15BHP BILLITON PLC - Notification of Major Interest in Shares
28/01/201413:00ROCKCASTLE GLOBAL REAL EST CO LTD - Abridged unaudited interim financial stateme...
28/01/201413:00MACQUARIE SEC SOUTH AFRICA LTD - New Financial Instrument Listing: MAQ046
28/01/201412:38AFRICAN BANK INVESTMENTS LIMITED - Disclosure of significant holding of ABIL ord...
28/01/201411:29THE STANDARD BANK OF SA LTD - New Financial Instrument Listing Announcement - CL...
28/01/201410:25AUSTRO GROUP LIMITED - Dealings in securities by an associate of a director of a...
28/01/201410:10PPC LIMITED - Results of the Annual General Meeting and Reitrement of a non-exec...
28/01/201409:30NEDBANK LIMITED - Issue of share instalments
28/01/201409:30SIBANYE GOLD LIMITED - Renewal of cautionary announcement
28/01/201409:00OANDO PLC - Notice of Extra-Ordinary General Meeting
28/01/201409:00AQUARIUS PLATINUM LIMITED - Production Results to 31 December 2013
28/01/201408:45CAPITAL PROPERTY FUND - New Appointment to the board of directors of PFM
28/01/201408:30FIRSTRAND LIMITED - Dividend declaration of 320.25100 cents per variable rate no...
28/01/201407:30REINET INVESTMENTS S.C.A - Management statement for the third quarter ended 31 D...
28/01/201407:05FORTRESS INCOME FUND LIMITED - Trading statement

Click here for more SENS news