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 The Sharenet Daily 
Tuesday, 18 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 - Loss Aversion: Why it?s Rational

Standard economic theory suggests that a rational investor will feel an equal amount of pleasure for every 1 unit of gain on an investment portfolio as they would pain for every 1 unit of loss. Research has shown, however, that losses are psychologically twice as powerful as gains, with the first proponents of this behavioural trait being Messrs Tversky and Kahneman.

Chart 1 below illustrates the emotions that one should feel in theory (in black) versus the observed emotions (blue) of investors making losses and gains.

Chart 1: Pleasure vs Pain

Should one treat losses the same as gains?

I would argue that loss aversion occurring naturally is actually rational behaviour in the case of investing.

It all comes down to the mathematics involved in recouping losses – investors require more than 1% in gains for every 1% lost in order to get back to the original (breakeven) position. This also helps to explain why most successful investors place a heavy premium on avoiding permanent capital destruction. There isn’t much difference for the first 10% – 20% of losses, but thereafter the difference between the loss made and the gains required increases exponentially. Chart 2 below graphs the required gains for each increment of loss on an investment portfolio.

Chart 2: Loss v Required Gains

The required gain illustrated in Chart 2 more closely mirrors the emotions of the pain felt in Chart 1 than the theoretical position based on the assumption that gains and losses are felt equally.

At a 10% loss, you require an 11% gain to get back to your starting point, at a 20% loss the gain required increases to 25%, at 50% you need to double your return, while a 67% loss requires your investment to triple before recouping all your losses. It is evident that there isn’t too much difference up to the 20% drawdown level, but from these levels it becomes increasingly difficult to rapidly recoup your losses.

As a result of this phenomenon, Seed has designed solutions to avoid deep drawdowns as far as possible. All investors need to take an element of risk in order to ensure that your portfolios grow sufficiently to cover your retirement needs. It is important, though, to manage the amount of risk you are exposed to and mitigate portfolio risk by combining uncorrelated growth assets within your portfolio. Small drawdowns will naturally be unavoidable, but permanent destruction of capital is to be avoided at all costs.

The Seed Flexible and Seed Absolute Return Funds both combine asset classes and strategies in order to generate inflation beating returns while minimising the probability of large capital drawdowns.

Take care,

Mike Browne

021 914 4966

Tue, 18 Mar 2014
Top News
South Africa's rand strengthened on Tuesday in line with other emerging market assets on signs that tensions between Russia and Ukraine could ease after Moscow's move to annex the Crimea region.  Full story

South African equities rebounded in afternoon trade after comments by Russian President Vladimir Putin calmed global markets and emboldened traders to pick up stocks that had been hammered in past sessions.  Full story
Defying Ukrainian protests and Western sanctions, Russian President Vladimir Putin signed a treaty on Tuesday making Crimea part of Russia again but said he did not plan to seize any other regions of Ukraine.  Full story
Germany's Constitutional Court upheld the legality of the euro zone's bailout fund on Tuesday, affirming a preliminary ruling during the debt crisis in 2012 that gave a green light to the European Stability Mechanism (ESM).  Full story
An international land and sea search for a missing Malaysian jetliner is covering an area the size of Australia, authorities said on Tuesday, but police and intelligence agencies have yet to establish a clear motive to explain its disappearance.  Full story
European shares changed course to climb higher in late trading on Tuesday after comments from Russian President Vladimir Putin eased concerns that tensions over. . .  Full story
Britain's top share index rose on Tuesday as stock markets rebounded after a speech by Russian President Vladimir Putin on Ukraine, which some. . .  Full story
Major world equity markets rose on Tuesday while the safe-haven yen pared gains after President Vladimir Putin, while approving plans to make Crimea part. . .  Full story
U.S. stocks rose for a second straight day on Tuesday, with the S&P moving within 1 percent of record levels after comments from. . .  Full story

Gold fell around 1 percent on Tuesday as global equities rose after Russian President Vladimir Putin's latest comments on Crimea lifted appetite for. . .  Full story
Major world equity markets rose on Tuesday and the safe-haven yen pared gains after President Vladimir Putin, while approving plans to make Crimea part. . .  Full story
U.S. stocks opened modestly higher on Tuesday, after comments from Russian President Vladimir Putin eased concerns that tensions over Ukraine might escalate.. . .  Full story
European shares rose on Tuesday and the safe-haven yen pared gains after President Vladimir Putin, while approving plans to make Crimea part of. . .  Full story
SA Business
With no end in sight, South Africa's platinum strike is set to become the biggest single stoppage to hit the country's mining sector since the end of apartheid in 1994, and now threatens the viability of an industry already in deep trouble.. . .  Full story

Kenya's first budget airline aims to carry 600,000 passengers in its first year and triple that within four years by offering cheap fares on a continent where air travel is among the world's most expensive, its chief executive said on Tuesday.. . .  Full story
A sharp increase in mining production will drive economic growth in Democratic Republic of Congo to around 9.5 percent this year, one of the highest rates in Africa, Prime Minister Augustin Matata Ponyo said in an interview.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:1047059.19242.540.52%
JSE Top 4017:0042393.08236.840.56%
JSE Gold17:001589.17-53.84-3.28%
JSE Financial17:0033658.0223.650.07%
JSE Industrial17:1061293.36655.561.08%
JSE Indust 2517:0054194.47603.891.13%
JSE Resource17:0055125.89-91.55-0.17%
DJ Futures19:5416275.00103.000.64%
DJ Ind20:0016357.51110.290.68%
SP 50020:001873.0314.200.76%
FTSE 10018:356605.2836.930.56%
All Ords07:435360.2025.000.47%
NZSE 5006:485135.6647.630.94%
NameTimeRPMove% Move
Gold $19:591360.14-6.06-0.44%
Gold R20:0014611.83-109.73-0.75%
Gold R/kg20:00469770-7769-1.63%
Silver $19:5920.8400-.3170-1.50%
Platinum $19:591457.70-1.80-0.12%
Palladium $19:59765.80-4.20-0.55%
Brent Crude20:00106.67-1.90-1.75%
Rand / Dollar19:5910.7436-0.0314-0.29%
Rand / Pound19:5517.7808-0.1113-0.62%
Rand / Euro19:5514.9567-0.0460-0.31%
Rand / NZD19:599.27770.04540.49%
Rand / AUD19:559.80920.01430.15%
Yen / Dollar19:59101.4280-0.3690-0.36%
Euro / Dollar19:590.7183-0.0001-0.01%
Dollar / Euro19:591.39210.00000.00%
Pound / Dollar19:550.60280.00190.32%

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 JDGROUP  282162428.40.%915912
2 OANDO  1221210.91.%25200
3 SANTOVA  1641510.00.%52731
4 ADCOCK  59114017.28.%1886328
5 HOWDEN  45802555.90.%5000
6 LITHA  190105.56.%6216
7 ITLTILE  795354.61.%1000
8 NASPERSN  12200052544.50.%2603723
9 ILLOVO  27501104.17.%281628
10 BLACKSTAR  1300504.00.%333382
11 ATT  1891723.96.%452940
12 TELKOM  32001193.86.%2209504
13 PERGRIN  1775643.74.%130151
14 REDEFINE  944343.74.%9398844
15 ONELOGIX  348113.26.%11700
16 WITSGOLD  1140353.17.%1000
17 CAMAC  979293.05.%800
18 WCC  20463.03.%66024
19 RAUBEX  2200643.00.%546968
20 GROUP-5  44281282.98.%208063

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Major Moves Down
SharenameSaleMove% MoveVolume
1 DRDGOLD  443-29-6.14.%183819
2 KELLY  170-10-5.56.%200
3 CSG  265-15-5.36.%35840
4 HARMONY  3745-205-5.19.%798070
5 MARSHALL  806-44-5.18.%476
6 GFIELDS  4385-210-4.57.%2990114
7 DIAMONDCP  105-5-4.55.%22477
8 SIBANYE  2389-110-4.40.%3761447
9 COMAIR  400-18-4.31.%104701
10 FAIRVEST  144-6-4.00.%110
11 FINBOND  300-10-3.23.%86169
12 S-OCEAN  121-4-3.20.%5000
13 COMPCLEAR  410-10-2.38.%285317
14 BCX  542-13-2.34.%1183768
15 RMBH  4615-105-2.22.%2186287
16 ASSORE  40600-921-2.22.%53736
17 ANGGOLD  20300-460-2.22.%1986210
18 KAP  370-8-2.12.%277187
19 TORRE  289-6-2.03.%244487
20 AVENG  2205-45-2.00.%1221893

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New Highs
SharenameSaleHighMove% MoveVolume
1 BLACKSTAR  13001300504.00.%333382
2 BEE-SASOL  44000440005001.15.%584
3 ANGLOPLAT  47718484781390.29.%328915
4 AFRIMAT  1330139030.23.%38918
5 BIDVEST  2720327500480.18.%1040294

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New Lows
SharenameSaleLowMove% MoveVolume

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Index Summary
Index NameRPMove% Move
Top 4042,393.08236.840.56%
Mid Cap59,212.53121.780.21%
Small Cap51,556.66314.450.61%
Resource 2055,125.89-91.55-0.17%
Industrial 2554,194.47603.891.13%
Financial 1512,859.40-19.33-0.15%
Financial & Ind. 3057,453.22482.910.85%
All Share47,059.19242.540.52%
Oil & Gas 44,064.54329.180.75%
Mining 32,803.42-172.53-0.52%
Gold Mining1,589.17-53.84-3.28%
Platinum Mining50.05.030.06%
GENERAL MINING9,335.34-15.57-0.17%
Oil & Gas Producers 23,692.69177.000.75%
Basic Materials 29,126.31-149.73-0.51%
Chemicals 23,804.73-106.27-0.44%
Forestry & Paper 32,243.38-239.43-0.74%
Industrial Metals 20,665.85193.700.95%
Industrials 42,221.8298.740.23%
General Industrials 133.64.340.26%
Consumer Goods 55,952.03386.640.70%
Automobiles & Parts 9,816.43-33.96-0.34%
Household Goods363.3141.06%
Health Care 73,848.88733.381.00%
Index NameRPMove% Move
Food Producers 65,848.10331.310.51%
Personal Goods 1,022.4312.481.24%
Consumer Services 11,409.43335.863.03%
General Retailers 57,758.35358.180.62%
Travel & Leisure 5,312.5634.060.65%
Media 266.3911.444.49%
Support Services 2,602.459.460.36%
Telecommunications 10,100.2329.790.30%
Financials 33,658.0223.650.07%
Banks 56,871.39-393.35-0.69%
Non-life Insurance 49,257.86127.610.26%
Life Insurance 32,592.2175.110.23%
General Financial 3,289.89-20.82-0.63%
Technology 42,688.89-116.39-0.27%
SHARIAH TOP40 4,093.6320.04%
FTSE/JSE SHARIAH ALL4,188.95-1-0.01%
COAL MINING17,730.07-330-1.83%
FTSE JSE Fledgling 6,521.14-25-0.38%
FTSE/JSE Alt X 1,204.22-1-0.10%
RESOURCE 30,184.66-86-0.28%
DIVIDEND PLUS210.0531.26%
FTSE/JSE RAFI 409,414.18150.16%
Capped Top 4022,452.841310.59%
Capped All Share23,829.291250.53%
JSE TABACO 7,412.66630.85%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
19/03/2014OANDODecember 2013 (Final)
19/03/2014TIMESMEDDecember 2013 (Interim)
20/03/2014AH-VESTDecember 2013 (Interim)
20/03/2014DIAMONDCPDecember 2013 (Final)
20/03/2014MASNITEADecember 2013 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
PUTPROP17/03/1404/04/1414/04/14ZAR 0.1800
CLOVER17/03/1404/04/1414/04/14ZAR 0.1600
ELBGROUP14/03/1404/04/1414/04/14ZAR 0.2800
SASFIN-P11/03/1428/03/1407/04/14ZAR 3.5351
SASFIN11/03/1404/04/1414/04/14ZAR 0.6534
Ex Div**
Share NameDec-DateLDTPay-DateAmount
GRINDROD PREF27/02/1413/03/1424/03/14ZAR 3.7700
MASSMART27/02/1413/03/1424/03/14ZAR 2.7500
SHOPRIT25/02/1413/03/1424/03/14ZAR 1.3200
SUNINT24/02/1413/03/1424/03/14ZAR 0.9000
DISCOVERY20/02/1413/03/1424/03/14ZAR 0.7300

Upcoming AGMs**
CodeCompany NameDateStatus
REBRebosis Property Fund Ltd.19/03/2014Confirmed

Stock Exchange News Service
18/03/201417:09BANK OF CHINA LIMITED - Appointment of new Debt Sponsor
18/03/201417:00REMGRO LIMITED - Unaudited results for the six months ended 31 December 2013 and...
18/03/201416:58STEINHOFF INTERNATIONAL HOLDINGS LD - Offer by Steinhoff to acquire up to 98% of...
18/03/201416:16DRDGOLD LIMITED - DRDGOLD proposes the acquisition of the remaining 26% of its m...
18/03/201416:15DRDGOLD LIMITED - CANCELLATION OF S342781 DRDGOLD proposes the acquisition of th...
18/03/201416:11DIPULA INCOME FUND LIMITED - Dealing in securities by an associate of directors ...
18/03/201416:09AFRICAN OXYGEN LIMITED - CEPPWAWU strikes at Afrox
18/03/201416:03TRUSTCO GROUP HOLDINGS LIMITED - Dealing in Securities
18/03/201416:00CAPITAL & COUNTIES PROPERTIES PLC - Notification of Major Interests in Shares
18/03/201415:12THE WATERBERG COAL COMPANY LTD - SENS announcement Re: Sunday Times newspaper ar...
18/03/201415:00DRDGOLD LIMITED - DRDGOLD proposes the acquisition of the remaining 26% of its m...
18/03/201415:00INVESTEC PLC - Further issue of class ILRP1 Redeemable, Cumulative Non-participa...
18/03/201414:26BOWLER METCALF LIMITED - Condensed Unaudited Consolidated Results for the six mo...
18/03/201414:00SILVERBRIDGE HOLDINGS LIMITED - Dealings in securities by a director
18/03/201413:04PPC LIMITED - Results of General Meeting of PPC Shareholders Relating to PPCS Pr...
18/03/201412:52FORTRESS INCOME FUND LIMITED - Issue of linked units to the Resilient Education ...
18/03/201412:40SYNTHESIS FUNDING LIMITED - New Listing - SY1068
18/03/201412:05EASTERN PLATINUM LIMITED - Change in transfer secretary
18/03/201412:00FERRUM CRESCENT LIMITED - Trading update
18/03/201411:44GLENCORE XSTRATA PLC - GLN - 2013 Annual Report of Glencore Xstrata plc
18/03/201411:30BANK WINDHOEK LIMITED - New Financial Instrument Listing Announcement BWZJ17?
18/03/201411:30INFRASORS HOLDINGS LIMITED - Proposed Specific Repurchase of Infrasors Shares
18/03/201411:27SOUTH AFRICAN COAL MINING HLDGS LTD - Further cautionary announcement re BEE tra...
18/03/201411:15ROYAL BAFOKENG PLATINUM LIMITED - Directors dealings in terms of the RBPLAT Bonu...
18/03/201411:15ABSA BANK LIMITED - Interest Rate Resets-ABFN06-ABFN09
18/03/201411:15TELKOM SA SOC LIMITED - Trading Statement
18/03/201411:03EFFICIENT GROUP LIMITED - Trading statement
18/03/201409:47GRAYSTON CONDUIT 1 (RF) LTD - New Financial Instrument Listing GRA311
18/03/201409:35DIGICORE HOLDINGS LIMITED - Dealing In Securities By A Director
18/03/201409:30NEWFUNDS COLLECTIVE INVEST SCHEME - NFGOVI-Additional Listing of NewFunds GOVI E...
18/03/201409:08BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
18/03/201409:06DORBYL LIMITED - Changes to the Board of Directors of Dorbyl
18/03/201409:00REDEFINE INTERNATIONAL PLC - Changes to the board
18/03/201408:45ADVTECH LIMITED - Preliminary announcement of summarised Audited Results for the...
18/03/201408:35VISUAL INTERNATIONAL HOLDINGS LIMITED - Amendment to Listing Date
18/03/201408:00ROLFES HOLDINGS LIMITED - Acquisition of the Equity in Agchem Properties Proprie...
18/03/201407:58FIRESTONE ENERGY LIMITED - Board Changes
18/03/201407:05TELEMASTERS HOLDINGS LIMITED - Abridged condensed un-audited consolidated resul...

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