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 The Sharenet Daily 
Tuesday, 11 March 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)

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Seed Weekly - Value Investing the Buffett Way (Part 5 1998 ? 2002)

The period 1998 to 2002 was an exceptionally interesting five years including the Dotcom bubble, its subsequent bursting and a small market dip following 9/11. After outperforming the S&P500 consecutively for 18 years, Berkshire underperformed in 1999.

During the bubble, Warren Buffett was heavily criticised for his underperformance. Unperturbed by media critics, he stuck to his convictions and stayed out of tech companies. Although he shared the general view that society would be transformed by the tech industry’s products and services, he could not gain insights as to which participants possessed a truly durable competitive advantage. The valuations were outrageous and the companies simply brought nothing to the table when it came to patents, manufacturing processes, or geological prospects. Warren Buffett remained true to his philosophy to only invest into companies that he understood.

At the height of the Dotcom bubble, Berkshire had the worst absolute performance of Mr Buffett’s tenure and, compared to the S&P500, the worst relative performance as well. “It was as if some virus, racing wildly among investment professionals as well as amateurs, induced hallucinations in which the values of stocks in certain sectors became decoupled from the values of the businesses that underlay them.”

In retrospect, the coincidence is that the Dotcom bubble peaked on 10 March 2000 when the NASDAQ hit its all-time high whilst Berkshire shares traded at their lowest price since mid-1997. As markets fell, Berkshire made substantial purchases (being greedy when others are fearful). As one can expect, performance quickly picked up again.

One can learn a lot from Mr Buffett’s unaffected behaviour towards market sensationalists. Unless substantially large, they don’t comment on any specific investment actions they make for a perfectly good reason. “Our never-comment-even-if-untrue policy in regard to investments may disappoint “piggy backers” but will benefit owners: Your Berkshire shares would be worth less if we discussed what we are doing. Incidentally, we should warn you that media speculation about our investment moves continues in most cases to be incorrect. People who rely on such commentary do so at their own peril.”

Warren Buffett seems to be the perfect head for his company. His interests are completely aligned with those of his shareholders whilst he constantly reassures investors that he would keep at least 99% of his net worth in Berkshire Hathaway. His view on being a CEO is also quite interesting:
1. Eliminate all ritualistic and non-productive activities that normally go with the job of CEO. Our managers are totally in charge of their personal schedules.
2. Give each a simple mission: Just run your business as if:
a. you own 100% of it;
b. It is the only asset in the world that you and your family have or will ever have;
c. You can’t sell or merge it for at least a century. As a corollary, we tell them they should not let any of their decisions be affected even slightly by accounting considerations.

During 2002 Berkshire experienced a banner year, outperforming the S&P 500 by nearly 20%. It was in this years’ newsletter that Warren Buffett gave this next piece of advice to his investors:
1. Beware of companies displaying weak accounting.
There is seldom just one cockroach in the kitchen.
2. Unintelligible footnotes usually indicate untrustworthy management. If you can’t understand a footnote or other managerial explanation, it’s usually because the CEO doesn’t want you to.
3. Be suspicious of companies that trumpet earnings projections and growth expectations.

It is these fundamentals that successfully carried Berkshire through the Dotcom bubble. They stayed invested for the long term in well managed businesses, irrespective of the short term bumps, and focussed on their overall results. Berkshire recently released their latest annual report – which is well worth the read for any aspiring investor.

Kind regards,

Lourens Rabé

021 914 4966

Tue, 11 Mar 2014
Top News
South African stocks ended in the black on Tuesday led by e-commerce giant Naspers and after a resurgence by gold and platinum shares.  Full story

Local markets The JSE All Share closed 0.61% higher by end of trade on Tuesday, with resource shares leading gains.  Full story
Malaysia's military believes a jetliner missing for almost four days turned and flew hundreds of kilometres to the west after it last made contact with civilian air traffic control off the country's east coast, a senior officer told Reuters on Tuesday.  Full story
Libya's navy opened fire on Tuesday on a tanker carrying oil from a rebel-held eastern port and Italian vessels are helping to secure the now-stationary vessel, a Libyan military spokesman said.  Full story
Ukraine's interim leaders established a new National Guard on Tuesday and appealed to the United States and Britain for assistance against what they called Russian aggression in Crimea under a post-Cold War treaty.  Full story
U.S. stocks fell in afternoon trading on Tuesday after swinging between gains and losses for most of the session as the lack of. . .  Full story
Britain's top share index steadied on Tuesday after hitting a three-week low, with some investors seeing value in beaten-down stocks, although the market remained. . .  Full story
German shares rose on Tuesday, outperforming European stocks more broadly, as strong trade data from the region's largest economy revived investor appetite for. . .  Full story
Gold rose on Tuesday as fears of a slowdown in Chinese economic growth and worries about the crisis in Ukraine sapped appetite for. . .  Full story

Major world equity markets were mostly steady on Tuesday, the euro edged down and gold rose as traders kept a wary eye on. . .  Full story
U.S. stocks opened with slight gains on Tuesday as investors continued to be cautious amid persisting tensions in Ukraine, while the S&P 500. . .  Full story
Britain's top equity index steadied on Tuesday from losses in the previous session that pushed it to a 3-week low, as a recovery. . .  Full story
European shares rose in early trade on Tuesday, reversing some of the previous session's losses, helped in part by robust German imports and. . .  Full story
SA Business
South Africa is likely to have adequate electricity supply in around two years, Finance Minister Pravin Gordhan said on Tuesday, less than a week after the first rolling blackouts in Africa's biggest economy since 2008.. . .  Full story
South African bourse operator JSE posted a 36 percent jump in full-year earnings on Tuesday, helped by demand for equities that sent stock prices to record highs.. . .  Full story

South Africa's rand weakened against the dollar on Tuesday, tracking the euro lower amid broadly poor investor sentiment towards emerging markets.. . .  Full story
Platinum holdings of physically backed exchange-traded funds hit a record high this week after inflows into products in London and Johannesburg,. . .  Full story
. . .  Full story
South Africa's rand was steady against the dollar on Tuesday and is likely to trade range-bound in the absence of market-moving. . .  Full story

Swiss sanitary equipment maker Geberit named Christian Buhl as its new chief executive on Tuesday as it published fourth-quarter net profit that met expectations.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0047612.81290.350.61%
JSE Top 4017:0043055.99320.610.75%
JSE Gold17:001573.4314.900.96%
JSE Financial17:0033618.75-99.77-0.30%
JSE Industrial17:0062386.66403.380.65%
JSE Indust 2517:0055359.42441.460.80%
JSE Resource17:0055603.52656.021.19%
DJ Futures10/0314331.64-100.360.00%
DJ Ind19:5416372.41-46.27-0.28%
SP 50019:541871.22-5.95-0.32%
FTSE 10018:356685.52-3.93-0.06%
All Ords07:495429.30-1.50-0.03%
NZSE 5006:485101.94-15.90-0.31%
NameTimeRPMove% Move
Gold $19:591347.728.450.63%
Gold R19:5814616.99226.621.57%
Gold R/kg19:5446990256361.21%
Silver $19:5920.8000-.0140-0.07%
Platinum $19:591462.90-9.10-0.62%
Palladium $19:59770.60-2.40-0.31%
Brent Crude19:48108.18-.82-0.75%
Rand / Dollar19:5910.84960.10410.97%
Rand / Pound19:5517.99730.13180.74%
Rand / Euro19:5515.03510.11560.77%
Rand / NZD19:589.19570.08860.97%
Rand / AUD19:559.74830.04590.47%
Yen / Dollar19:59102.9860-0.3250-0.31%
Euro / Dollar19:550.72120.00090.12%
Dollar / Euro19:591.3864-0.0012-0.09%
Pound / Dollar19:550.60140.00090.15%

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 ALERT  1454545.00.%200
2 GOLIATH  2302512.20.%2000
3 NET1UEPS  110006906.69.%42
4 TIMES  21001306.60.%62321
5 POYNTING  318186.00.%12110
6 OANDO  14385.93.%2950
7 CENRAND  395205.33.%1260
8 MASTDRILL  1000495.15.%2400
9 MAS  21001005.00.%24179
10 MMG  1100504.76.%400
11 COMAIR  419184.49.%38231
12 CROOKES  73003004.29.%2681
13 BLACKSTAR  1250504.17.%554000
14 GFIELDS  42361664.08.%1265535
15 BEE-SASOL  4250016003.91.%757
16 NASPERSN  13540949093.76.%1757743
17 MUSTEK  619193.17.%527397
18 MERAFE  10333.00.%9583778
19 ASTRAL  82502202.74.%163775
20 OCEANA  82152162.70.%244613

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Major Moves Down
SharenameSaleMove% MoveVolume
1 NUWORLD  1750-245-12.28.%3400
2 CONVERGE  115-13-10.16.%107556
3 METMAR  146-10-6.41.%7650
4 JDGROUP  1940-125-6.05.%574269
5 LITHA  193-12-5.85.%10365
6 CAMAC  1000-61-5.75.%3491
7 ARCMITTAL  4006-234-5.52.%1009092
8 KUMBAIO  36900-2100-5.38.%2501263
9 FINBOND  290-16-5.23.%28910
10 ARB  581-31-5.07.%27641
11 ALTRON  2365-110-4.44.%16568
12 ASSORE  41500-1913-4.41.%91517
13 CADIZ  110-5-4.35.%8076
14 ASCEN A  450-19-4.05.%40000
15 ADVTECH  690-25-3.50.%480111
16 VALUE  522-18-3.33.%12009
17 EXXARO  14050-449-3.10.%869838
18 METROFILE  495-15-2.94.%1919099
19 PALLINGHT  340-10-2.86.%318829
20 CLOVER  1890-55-2.83.%33928

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New Highs
SharenameSaleHighMove% MoveVolume
1 CROOKES  730073003004.29.%2681
2 BLACKSTAR  12501250504.17.%554000
3 BEE-SASOL  425004250016003.91.%757
4 NASPERSN  13540913540949093.76.%1757743
5 CML  934094312082.28.%675211
6 GRANPRADE  543549101.88.%696547
7 SASOL  58504590005280.91.%1054130
8 ILIAD  67170010.15.%2065
9 SIBANYE  24372515-40-1.61.%2546961

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New Lows
SharenameSaleLowMove% MoveVolume
1 JDGROUP  19401900-125-6.05.%574269
2 KUMBAIO  3690036521-2100-5.38.%2501263
3 AVENG  20462026-39-1.87.%1094569

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Index Summary
Index NameRPMove% Move
Top 4043,055.99320.610.75%
Mid Cap58,668.35-43.57-0.07%
Small Cap51,149.79-181.41-0.35%
Resource 2055,603.52656.021.19%
Industrial 2555,359.42441.460.80%
Financial 1512,871.20-37.20-0.29%
Financial & Ind. 3058,506.82341.130.59%
All Share47,612.81290.350.61%
Oil & Gas 44,272.64399.560.91%
Mining 33,114.08402.531.23%
Gold Mining1,573.4314.900.96%
Platinum Mining49.22.771.59%
GENERAL MINING9,480.58122.021.30%
Oil & Gas Producers 23,804.58214.830.91%
Basic Materials 29,435.10315.831.08%
Chemicals 24,149.93-151.26-0.62%
Forestry & Paper 33,010.42481.411.48%
Industrial Metals 20,834.25-1192.95-5.42%
Industrials 41,616.5094.520.23%
General Industrials 130.51.680.52%
Consumer Goods 57,304.40168.990.30%
Automobiles & Parts 9,818.69-99.64-1.00%
Household Goods366.36-4-1.01%
Health Care 73,382.64-910.02-1.22%
Beverages 178.68-.62-0.35%
Index NameRPMove% Move
Food Producers 63,979.24409.340.64%
Personal Goods 1,058.0911.191.07%
Consumer Services 12,034.01283.162.41%
General Retailers 55,745.53-30.99-0.06%
Travel & Leisure 5,306.27-30.29-0.57%
Media 295.4910.733.77%
Support Services 2,622.4113.190.51%
Telecommunications 9,770.692.630.03%
Financials 33,618.75-99.77-0.30%
Banks 56,439.89-229.02-0.40%
Non-life Insurance 48,522.8230.630.06%
Life Insurance 32,907.44-146.87-0.44%
General Financial 3,347.184.300.13%
Technology 43,457.32-13.20-0.03%
SHARIAH TOP40 4,098.61270.66%
FTSE/JSE SHARIAH ALL4,187.46230.55%
COAL MINING17,761.67-568-3.10%
FTSE JSE Fledgling 6,572.96260.40%
FTSE/JSE Alt X 1,197.3350.40%
CAPPED PROPERTY 420.18-0.33%
RESOURCE 30,443.313521.17%
DIVIDEND PLUS204.98-1-0.69%
FTSE/JSE RAFI 409,465.45610.65%
Capped Top 4022,797.791690.75%
Capped All Share24,109.371460.61%
JSE TABACO 7,434.38380.51%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
12/03/2014CONTROLDecember 2013 (Final)
12/03/2014EOHJanuary 2014 (Interim)
12/03/2014FERRUMDecember 2013 (Interim)
12/03/2014GIYANIDecember 2013 (Final)
13/03/2014AFGRIDecember 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
A-V-I10/03/1428/03/1407/04/14ZAR 1.2000
SASOL10/03/1404/04/1414/04/14ZAR 8.0000
STANBANK-P06/03/1428/03/1407/04/14ZAR 3.2994
STANBANK6.506/03/1428/03/1407/04/14ZAR 0.0325
STANBANK06/03/1404/04/1414/04/14ZAR 3.0000
Ex Div**
Share NameDec-DateLDTPay-DateAmount
KUMBA11/02/1407/03/1417/03/14ZAR 19.9400
DSY B PREF20/02/1407/03/1417/03/14ZAR 4.2849
TRUWTHS20/02/1407/03/1417/03/14ZAR 2.1600
TRANSCAP17/02/1407/03/1417/03/14ZAR 2.1000
CITYLDG13/02/1407/03/1417/03/14ZAR 2.0200

Upcoming AGMs**
CodeCompany NameDateStatus

Stock Exchange News Service
11/03/201417:45PICK N PAY STORES LIMITED - Disclosure of disposal of securities in Pick n Pay S...
11/03/201417:36COMPU-CLEARING OUTSOURCING LIMITED - Changes to the Board of Directors - Appoint...
11/03/201417:35TRANSACTION CAPITAL LIMITED - Notice of disposal of Transaction Capital Limited ...
11/03/201417:30THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited New Fin...
11/03/201417:25REDEFINE PROPERTIES LIMITED - Interest Rate Reset: RDFB02
11/03/201417:00DORBYL LIMITED - Changes to the Board
11/03/201417:00AFRICAN RAINBOW MINERALS LIMITED - Directors dealings in ARM securities
11/03/201416:55AMALGAMATED ELECTRONIC CORP LTD - Cautionary announcement
11/03/201416:50ABSA BANK LIMITED - New Financial Instrument Listing ASN010 - Amendment To Nomin...
11/03/201416:45OLD MUTUAL PLC - Notification of Transactions of Directors, Persons Discharging ...
11/03/201416:33NEW GOLD ISSUER LIMITED - NGPLT Listing of additional NewGold Platinum Debentur...
11/03/201416:15TRUWORTHS INTERNATIONAL LIMITED - Notice of an acquisition of a beneficial inter...
11/03/201416:15MONDI PLC - MNP/MND - Notification of Major Interests in Shares
11/03/201416:00OSIRIS PROPERTIES INTERNATIONAL LTD - Abridged unaudited consolidated results fo...
11/03/201416:00STANDARD BANK GROUP LIMITED - Director's dealings in securities
11/03/201415:19ABSA BANK LIMITED - Interest Rate Reset-ABN91
11/03/201415:10BARLOWORLD LIMITED - Interest Rate Reset-BAW17 and BAW18
11/03/201414:33INVESTEC BANK LIMITED - Investec Dividend Announcment- BTIIHC
11/03/201413:55SIBANYE GOLD LIMITED - Further renewal of cautionary announcement
11/03/201413:47JSE LIMITED - Audited abridged annual results and cash dividend declaration for ...
11/03/201413:45BRIMSTONE INVESTMENT CORPORATION LD - Dealing in securities by a director
11/03/201413:06ANGLO AMERICAN PLC - Notification of major interest in shares
11/03/201412:35GROWTHPOINT PROPERTIES LIMITED - Interest Rate Reset-GRT06
11/03/201411:38DIPULA INCOME FUND LIMITED - Dealing in securities by an associate of directors ...
11/03/201411:15ABSA BANK LIMITED - New Financial Instrument Listing - ASN009
11/03/201411:15W G WEARNE LIMITED - Changes to the board of directors
11/03/201411:15ABSA BANK LIMITED - New Financial Instrument Listing - ASN010
11/03/201411:06RCS INVESTMENT HOLDINGS LTD - Full Capital Redemption-RCSB01
11/03/201410:35DIGICORE HOLDINGS LIMITED - Dealing In Securities By A Director
11/03/201410:20SASFIN HOLDINGS LIMITED - Sasfin interim results and dividend declaration
11/03/201410:00ILIAD AFRICA LIMITED - Audited Preliminary Summarised Consolidated Financial Res...
11/03/201409:45IMPERIAL HOLDINGS LIMITED - Dealings in Securities by a Director
11/03/201409:40INVICTA HOLDINGS LIMITED - Director's dealing in securities
11/03/201409:30ABSA BANK LIMITED - NEWSLV-NewWave Additional Listing
11/03/201409:00THE SA NATIONAL ROADS AGENCY SOC LTD - Notice of Meeting-Sanral
11/03/201409:00ABSA CAPITAL - New Financial Instrument Listng - LBCP10
11/03/201408:45BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
11/03/201407:30MERAFE RESOURCES LIMITED - Summarised consolidated financial statements for the ...
11/03/201407:30TIMES MEDIA GROUP LIMITED - Trading statement
11/03/201407:16SENTULA MINING LIMITED - Change to the board of directors Resignation of direct...
11/03/201407:06ANGLO AMERICAN PLC - PDMR/Directors interests
11/03/201407:05BHP BILLITON PLC - AJM Conference Presentation
11/03/201407:05ANGLO AMERICAN PLC - PDMR/Directors interests

Click here for more SENS news