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 The Sharenet Daily 
Tuesday, 08 July 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 7 2008 ? 2012)

2008 was the height of the Global Financial Crisis (GFC), leading into one of the strongest bull markets in history. Berkshire Hathaway managed to perform well during the recession as two core businesses sectors, insurance and utility groups, produced earnings uncorrelated to the general economy. Berkshire only lost 9.6% in 2008, whilst the S&P500 lost 37%. Although Berkshire underperformed the S&P500 in the following four years, their returns compounded from a higher base. Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

According to Mr Buffett his, and Charlie Munger’s, focus during the good and the bad years is to simply stay focussed on four goals:

1. Maintaining Berkshire’s Gibraltar-like financial position
• huge amounts of excess liquidity,
• near-term obligations that are modest, and
• dozens of sources of earnings and cash;
2. Widening the “moats” around operating businesses that give them durable competitive advantages;
3. Acquiring and developing new and varied streams of earnings;
4. Expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional results.

Keeping a cash buffer is extremely important. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. This conservative approach to leverage might dampen returns, but having excess liquidity lets them sleep well.

This liquidity facilitated Berkshire’s $15.6bn investment in 25 days of panic following the Lehman bankruptcy in 2008. They purchased convertible bonds worth $14.5bn in Wrigley, Goldman Sachs and General Electric at high yields. To fund these large purchases, I had to sell portions of some holdings that I would have preferred to keep (primarily Johnson & Johnson, Procter & Gamble and ConocoPhillips). However, I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash.

Mr Buffett stresses the dangers of derivatives, especially when it may lead to extreme leverage or counterparty risk. He promises his shareholders that this will never occur at Berkshire. Charlie and I believe that a CEO must not delegate risk control. It’s simply too important. At Berkshire, I both initiate and monitor every derivatives contract on our books… If Berkshire ever gets in trouble, it will be my fault. It will not be because of misjudgments made by a Risk Committee or Chief Risk Officer.

As mentioned previously, they don’t attempt to impress Wall Street. Investors who buy and sell based upon media or analyst commentary are not for us. Instead we want partners who join us at Berkshire because they wish to make a long-term investment in a business they themselves understand and because it’s one that follows policies with which they concur.

As always his prime focus is to increase shareholder value. Buffett still has no intention of paying a dividend. He will, however, repurchase Berkshire shares if they trade at a meaningful discount to intrinsic value. Because of Berkshire's size, it takes even more money to make acquisitions that move the needle. Buffett wants to save the company's cash for the remaining whales in the ocean.

This was the last part of the 7 piece series on Warren Buffett’s annual letter to his shareholders. I can highly recommend that you read his 2013 letter yourself which can be found on their website, http://www.berkshirehathaway.com. Experience it for yourself; writing about it simply does not do justice.

Kind regards,

Lourens Rabé

021 914 4966

Tue, 08 Jul 2014
Top News
Palladium rose for the 12th straight session to the highest level in more than 13 years on Tuesday, on supply concerns in South Africa, and firm demand in major car making markets China and the United States.  Full story

South Africa's rand strengthened nearly 1 percent against the dollar on Tuesday, outperforming 24 emerging market peers amid hopes that a week-old strike by metal and engineering workers could soon be resolved.  Full story
Ukraine's government kept up military pressure against pro-Russian rebels on Tuesday, threatening them with an "nasty surprise", while the militants said they were preparing to fight back after losing their main stronghold.  Full story
At least 14 people were killed in strikes on the Gaza Strip on Tuesday, Palestinian officials said, as Israel threatened a lengthy offensive against militants whose rocket fire reached as far as Tel Aviv.  Full story
The United States warned on Tuesday it would withdraw financial and security support from Afghanistan if anyone tried to take power illegally, as supporters of a presidential candidate rallied in Kabul for a parallel government.  Full story
The dollar eased and global equity markets fell on Tuesday as investors stepped back ahead of second-quarter earnings reports and after successive record highs. . .  Full story
Banking stocks led European shares lower on Tuesday as German banks became the latest lenders to be negotiating a costly legal settlement with. . .  Full story
U.S. stocks fell in a broad selloff on Tuesday, dropping for a second straight session in their biggest one-day drop in almost two. . .  Full story
Britain's top equity index dropped on Tuesday after airline stocks such as International Consolidated Airlines Group were hit by a profit warning from Air. . .  Full story

U.S. stocks fell at the open on Tuesday as investors continued to hold off from making big bets going into the start of. . .  Full story
Hong Kong shares finished flat on Tuesday, as gains in utilities offset losses in Macau casino stocks on concerns that revenues would. . .  Full story
China shares ended higher on Tuesday, reversing midday losses as power producers and carmakers outperformed.. . .  Full story
Australian shares slipped 0.2 percent on Tuesday, dragged down by blue-chip financials as Wall Street fell overnight, while a drop in metal and. . .  Full story
SA Business
South Africa's striking NUMSA union said on Tuesday it would take the "latest" wage offer from the main employers' group to. . .  Full story
South Africa's state owned power utility Eskom is "sitting on a time bomb" for not allowing its workers to strike, the. . .  Full story
South Africa's National Union of Mineworkers (NUM) said on Tuesday that state-owned power utility Eskom was "sitting on a time bomb". . .  Full story
Gold fell on Monday after stronger-than-expected monthly U.S. jobs data boosted talk of an early interest rate hike, even as traders looked for. . .  Full story

Nearly half of India's coal-fired power plants have only enough stocks to last a week or less, a shortage that could become critical. . .  Full story
South Africa's Treasury sold 2.35 billion rand ($220 million)worth of its 2032, 2037 and 2048 bonds on Tuesday.. . .  Full story
South Africa's business confidence remained subdued in June due to labour unrest which has hurt an already fragile economy, a survey. . .  Full story
Two unions representing some of Telkom SA's workers said on Tuesday they would take the South African landline provider to court. . .  Full story

South Africa's Impala Platinum said that 2,000 workers at its Marula mine who had been on a wildcat strike for better wages returned to work on Tuesday.. . .  Full story
The chief executive of French oil major Total is giving himself until the end of the year to strike oil at a big new field somewhere in the world before considering whether to change direction and cut the exploration budget.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0051608.33-268.78-0.52%
JSE Top 4017:0046573.52-299.90-0.64%
JSE Gold17:001480.71-3.53-0.24%
JSE Financial17:0037745.42-43.84-0.12%
JSE Industrial17:0067432.08-424.99-0.63%
JSE Indust 2517:0059704.95-445.06-0.74%
JSE Resource17:0059365.37-326.74-0.55%
DJ Futures19:5816852.00-96.00-0.57%
DJ Ind19:5816933.08-91.13-0.54%
SP 50019:581966.82-10.83-0.55%
FTSE 10017:356738.45-85.06-1.25%
All Ords08:375498.50-7.80-0.14%
NZSE 5007:485166.08-20.28-0.39%
NameTimeRPMove% Move
Gold $19:591315.65-3.95-0.30%
Gold R19:5914064.19-145.61-1.02%
Gold R/kg19:58452218-2124-0.47%
Silver $19:5920.9630-.0730-0.35%
Platinum $19:591491.601.700.11%
Palladium $19:59869.603.820.44%
Brent Crude19:58109.00-1.24-1.12%
Rand / Dollar19:5910.6887-0.0785-0.73%
Rand / Pound19:5518.2772-0.1501-0.81%
Rand / Euro19:5514.5490-0.1120-0.76%
Rand / NZD19:599.3983-0.0276-0.29%
Rand / AUD19:5510.0515-0.0475-0.47%
Yen / Dollar19:59101.5510-0.3210-0.32%
Euro / Dollar19:570.7347-0.0003-0.04%
Dollar / Euro19:581.36120.00050.04%
Pound / Dollar19:450.5834-0.0001-0.02%

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 ATLATSA  470296.58.%7049
2 THARISA  25001506.38.%223000
3 EASTPLATS  10965.83.%58617
4 ASTRAL  130945884.70.%240004
5 ELLIES   330154.69.%533006
6 SAPPI  41841824.55.%4059211
7 NETCARE  31201214.03.%6010437
8 DRDGOLD  322123.87.%268749
9 WBHO  125754643.83.%91554
10 POYNTING  273103.80.%13506
11 SEARDEL  19473.74.%32050
12 SOVFOOD  825253.13.%27677
13 EQSTRA  650182.85.%1259645
14 ASSORE  3768010252.80.%77893
15 CASHBIL  132253252.52.%72703
16 VIVIDEND  559122.19.%598395
17 TSOGO-SUN  2662572.19.%480779
18 MRPRICE  186403732.04.%1039132
19 PUTPROP  750152.04.%1562
20 TONGAAT  156503001.95.%418121

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Major Moves Down
SharenameSaleMove% MoveVolume
1 OANDO  181-34-15.81.%3817
2 BUILDMX  205-36-14.94.%67750
3 LONMIN  4201-349-7.67.%2075664
4 EHSV  649-49-7.02.%1350
5 ABIL  735-55-6.96.%8871845
6 CSG  170-10-5.56.%77079
7 BLUETEL  803-45-5.31.%221651
8 LITHA  180-10-5.26.%31371
9 CAMAC  736-34-4.42.%1300
10 TRADEH  1475-65-4.22.%14502
11 WESCOAL  186-8-4.08.%568374
12 ADAPTIT  763-31-3.90.%114196
13 PETMIN  232-8-3.33.%22139
14 TRENCOR  8037-266-3.20.%283808
15 SPURCORP  3060-99-3.14.%48258
16 TRNSHEX  350-10-2.78.%32993
17 METROFILE  494-14-2.76.%97611
18 CBH  380-10-2.56.%25000
19 JSE  9800-250-2.49.%125488
20 SABMILLER  60675-1480-2.38.%831159

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New Highs
SharenameSaleHighMove% MoveVolume
1 EASTPLATS  10910965.83.%58617
2 ASTRAL  13094133345884.70.%240004
3 SAPPI  418442761824.55.%4059211
4 NETCARE  312031401214.03.%6010437
5 SOVFOOD  825825253.13.%27677
6 MRPRICE  18640186693732.04.%1039132
7 TELKOM  49495000871.79.%1819630
8 MERAFE  12412721.64.%2327348
9 SASFIN  52255225751.46.%2264
10 MEDCLIN  866286621121.31.%805750
11 ILIAD  780780101.30.%900
12 REMGRO  23170233001460.63.%434173
13 INVLTD  97309870-66-0.67.%506153
14 MUSTEK  750777-10-1.32.%20460

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New Lows
SharenameSaleLowMove% MoveVolume

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Index Summary
Index NameRPMove% Move
Top 4046,573.52-299.90-0.64%
Mid Cap64,744.66119.980.19%
Small Cap54,203.90-19.67-0.04%
Resource 2059,365.37-326.74-0.55%
Industrial 2559,704.95-445.06-0.74%
Financial 1514,593.85-7.48-0.05%
Financial & Ind. 3063,593.55-438.68-0.69%
All Share51,608.33-268.78-0.52%
Oil & Gas 47,802.86429.830.91%
Mining 35,094.27-333.70-0.94%
Gold Mining1,480.71-3.53-0.24%
Platinum Mining48.30-.67-1.37%
GENERAL MINING10,304.35-103.64-1.00%
Oil & Gas Producers 25,702.72231.120.91%
Basic Materials 30,951.84-273.53-0.88%
Chemicals 25,080.25-142.51-0.57%
Forestry & Paper 32,859.98-71.62-0.22%
Industrial Metals 18,526.20-76.66-0.41%
Industrials 45,747.029.470.02%
General Industrials 145.97.450.31%
Consumer Goods 63,041.13-921.99-1.44%
Automobiles & Parts 8,593.6267.930.80%
Household Goods375.54-0-0.09%
Health Care 84,127.71870.511.05%
Beverages 207.09-4.98-2.35%
Index NameRPMove% Move
Food Producers 78,663.56134.410.17%
Personal Goods 1,087.55-14.09-1.28%
Consumer Services 12,480.9925.220.20%
General Retailers 65,519.74532.780.82%
Travel & Leisure 5,778.5113.050.23%
Media 289.86-.43-0.15%
Support Services 2,790.44-9.26-0.33%
Telecommunications 10,741.40-83.10-0.77%
Financials 37,745.42-43.84-0.12%
Banks 65,664.66379.220.58%
Non-life Insurance 52,085.72-63.81-0.12%
Life Insurance 36,411.72-177.96-0.49%
General Financial 3,845.49-39.37-1.01%
Technology 44,456.69-277.79-0.62%
SHARIAH TOP40 4,377.95-26-0.60%
FTSE/JSE SHARIAH ALL4,492.36-20-0.43%
COAL MINING17,470.91250.14%
FTSE JSE Fledgling 6,901.37330.48%
FTSE/JSE Alt X 1,216.86-13-1.06%
CAPPED PROPERTY 447.59-0.17%
RESOURCE 32,375.71-192-0.59%
DIVIDEND PLUS225.31-0-0.22%
FTSE/JSE RAFI 4010,206.81-49-0.48%
Capped Top 4024,655.77-149-0.60%
Capped All Share26,130.85-135-0.51%
JSE TABACO 8,374.48-74-0.87%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
11/07/2014ROCKWELLMay 2014 (Q)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
AMECOR01/07/1418/07/1428/07/14ZAR 0.0600
PRESCIENT30/06/1425/07/1404/08/14ZAR 0.0260
ILRPREF130/06/1418/07/1428/07/14ZAR 12.5638
TRUSTCO30/06/1425/07/1422/08/14NAD 0.0275
VIVIDEND27/06/1418/07/1428/07/14ZAR 0.0404
Ex Div**
Share NameDec-DateLDTPay-DateAmount
INVICTA17/06/1404/07/1414/07/14ZAR 1.8465
FAMBRANDS19/05/1404/07/1414/07/14ZAR 1.7000
CROOKES03/06/1404/07/1414/07/14ZAR 1.2000
TASTE21/05/1404/07/1414/07/14ZAR 0.0620
LIBHOLD1130/06/1404/07/1414/07/14ZAR 0.0550

Upcoming AGMs**
CodeCompany NameDateStatus
SMMSable Metals and Minerals Ltd.10/07/2014Confirmed
GGPGoGlobal Properties Ltd.10/07/2014Confirmed
HUGHuge Group Ltd.12/07/2014Unconfirmed

Stock Exchange News Service
08/07/201417:13JSE LIMITED - Index Change Advice - 20140716 Mine Restoration Investments Shares...
08/07/201417:10JSE LIMITED - Index Change Advice - 20140716 Tongaat Hulett Shares In Issue and ...
08/07/201417:00INVESTEC LIMITED - Investec Ltd \ Investec PLC - Director's Dealings
08/07/201417:00SOVEREIGN FOOD INVESTMENTS LIMITED - Notice of an acquisition of a beneficial in...
08/07/201417:00INTU PROPERTIES PLC - Notification of Major Interests in Shares
08/07/201416:45SA CORPORATE REAL ESTATE FUND - Appointment to the Board of Directors
08/07/201416:45TASTE HOLDINGS LIMITED - Exercise of options and sale of shares by executive dir...
08/07/201416:30COMBINED MOTOR HOLDINGS LIMITED - Dealing by Director and Company Secretary
08/07/201416:28PINNACLE POINT GROUP LIMITED - Renewal of cautionary announcement
08/07/201416:26GLENCORE PLC - GLN - Glencore completes acquisition of Caracal
08/07/201416:25ANGLO AMERICAN PLC - Directors' Interests
08/07/201416:05TONGAAT HULETT LIMITED - Dealings in Securities - Executive Directors and Compan...
08/07/201416:01THE STANDARD BANK OF SA LTD - Interest Rate Announcement
08/07/201415:25THE STANDARD BANK OF SA LTD - Interest Rate Announcement
08/07/201415:00OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
08/07/201414:02JSE LIMITED - Resignation of company secretary
08/07/201414:00OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
08/07/201413:51BSI STEEL LIMITED - Dealing in securities
08/07/201413:49BSI STEEL LIMITED - Dealing in securities
08/07/201413:38REUNERT LIMITED - Notification in terms of Section 122(3) of the Companies Act a...
08/07/201413:15SABMILLER PLC - Notification of transactions of directors, persons discharging m...
08/07/201413:00CONSOLIDATED INFRASTRUCTURE GRP LTD - Dealings in securities by a director of a ...
08/07/201412:45SENTULA MINING LIMITED - Change to the board of directors of a subsidiary Resig...
08/07/201412:10COMBINED MOTOR HOLDINGS LIMITED - Change in Directorate
08/07/201411:40SYNTHESIS FUNDING LIMITED - Synthesis Funding Limited - New Financial Instrument...
08/07/201410:59ISA HOLDINGS LIMITED - Dealings in Securities by Directors
08/07/201410:59SOUTH AFRICAN COAL MINING HLDGS LTD - Notice of change to the board of directors
08/07/201410:00BNP PARIBAS ARBITRAGE ISSUANCE B.V. - Issue of ZAR35,000,000 warrants relating t...
08/07/201409:26INDWA INVESTMENTS LIMITED - INA442-Listing of New Instrument
08/07/201409:23Investec Bank Limited - Expiry - Spxiie
08/07/201409:12REDEFINE PROPERTIES LIMITED - Change to the board of directors
08/07/201409:11MIX TELEMATICS LIMITED - MiX Telematics appoints Ken Jackson as senior vice pres...
08/07/201409:02ABSA BANK LIMITED - Absa Bank Ltd-Interest Rate Resets
08/07/201408:32THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited Financi...
08/07/201408:31THE STANDARD BANK OF SA LTD - Financial Instrument De-listing Announcement CLN28...
08/07/201408:30THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited Financi...
08/07/201408:30THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited Financi...
08/07/201408:00STEINHOFF INTERNATIONAL HOLDINGS LTD - Rights Offer Finalisation Announcement
08/07/201407:05MONDI PLC - Mondi Ltd \ Mondi Plc - Employee share plans
08/07/201407:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

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