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Speaker 1: And now The Money Show with Stephen credits on seven

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Speaker 1: oh two.

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Speaker 2: Let's walk little.

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Speaker 3: The Money Show with Stephen Crutis is brought to you

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Speaker 3: by ABS of Corporates and Investment Banking, a Pan African

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Speaker 3: bank that's invested in your story because your story matters.

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Speaker 3: Good evening, Welcome to the program. Nine minutes after six times,

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Speaker 3: Stephen crutis one of those sort of astonishing days. And

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Speaker 3: I've probably said that about ten times already this year.

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Speaker 3: Probably only had fifteen or sixteen money shows so far

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Speaker 3: this January or twenty twenty six, simply because so much

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Speaker 3: has happened. Gold shooting through five five hundred dollars seems

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Speaker 3: extraordinary that it can be moving quite so quickly. At

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Speaker 3: the same time, of course, we have what probably matters

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Speaker 3: more actually for you and I is the Reserve Bank's

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Speaker 3: decision to keep interest rates on hold. Normally you might

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Speaker 3: see a little bit of reaction from some shares on

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Speaker 3: the JSE, some of the financial shares to a decision

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Speaker 3: like that. I sort of get the sense, and we'll

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Speaker 3: speak to people who know more about it than I do.

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Speaker 3: That really, the way in which it's been signaled that

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Speaker 3: there will be cut further down the line. The general

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Speaker 3: tone I thought of the Reserve Bank Governor Najo suggesting

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Speaker 3: that you know, inflation is well contained, to use the

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Speaker 3: technical expression, I was rarely struck by the point he made,

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Speaker 3: and I thought it was a very important point about

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Speaker 3: what's happening in other economies. And he said specifically that

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Speaker 3: this is rarely about what's happening. He sort of said

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Speaker 3: key economies. The one was the trade imbalance that we're

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Speaker 3: seeing in some economies, and he suggested that China last

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Speaker 3: he had a balance of payments of one trillion dollars

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Speaker 3: in their favor. The second was the government deficits in

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Speaker 3: some economies and the US, he said, approaching two trillion dollars.

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Speaker 3: And these are unsustainable. And I have to say, if

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Speaker 3: you consider all of the conversations you and I have

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Speaker 3: been having about Chinese cars and Indian cars, the imports,

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Speaker 3: the cheaper imports, I mean absolutely that's correct. You would

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Speaker 3: expect that not only will South Africa bring in other tariffs,

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Speaker 3: but so will other people, and that is going to

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Speaker 3: lead to all sorts of consequences that cannot really go

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Speaker 3: unlike this. And I noticed, and I was very interested

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Speaker 3: that we're starting to see the car industry push back

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Speaker 3: a little bit against tariffs. And it's a reminder, as

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Speaker 3: we discovered once again in the run up to the

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Speaker 3: Trump administration tariff's how interconnected everything is. So I notice

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Speaker 3: the BMW COO for South Africa, Peter and Pinsberg, and

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Speaker 3: he was speaking to John Pulman on seven oh two earlier,

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Speaker 3: basically pushing back against the idea of tariffs. Will play

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Speaker 3: a clip of that a little later in the show

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Speaker 3: because I thought it was very important. We'll see here

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Speaker 3: from the World Gold Council in a few moments. John

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Speaker 3: Reed's already on hold. He's the market strategist there and

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Speaker 3: predictions despite what we saw today, despite what we've already

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Speaker 3: seen this year, but in fact gold could stay at

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Speaker 3: these levels and who knows, perhaps higher for quite some time.

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Speaker 3: Patrick butter Lesi and economists at some LAM investments. We'll

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Speaker 3: get his view on the interest rate decision today by

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Speaker 3: the Reserve Bank. An amazing decision by nurser. They had

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Speaker 3: no choice. Don't blame them for making the decision, but

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Speaker 3: there's an amazing set of circumstances around it. Eskim essentially

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Speaker 3: asking for permission to charge two smelters less than they

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Speaker 3: would normally charge to provide them with the electricity. I

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Speaker 3: still don't know who's going to make up the difference.

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Speaker 3: As I talk to you now, I have a sneaking

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Speaker 3: suspicion who it might be. Get out your phone, tap, camera, tap,

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Speaker 3: look at me as if you're taking a selfie. And

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Speaker 3: then I think you're probably gonna see who's going to

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Speaker 3: pay for it. If I can put it like that,

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Speaker 3: We've been told that it won't be you, and I

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Speaker 3: I suspect that maybe it will be Nellis Besta. It's

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Speaker 3: the chair of the Pharaoh Alloy Producers Association. You'll have

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Speaker 3: a more informed view than I. And then more talks,

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Speaker 3: more conversations around the gas cliff that's been looming. Government,

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Speaker 3: it seems in talks with Mozambique to get more gas

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Speaker 3: from more fields. But think of all the infrastructure that

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Speaker 3: needs to be built to make that work. Yucko human

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Speaker 3: Is the executive officer at the Industrial Gas Users Association

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Speaker 3: of Southern Africa, will get his view that before seven o'clock.

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Speaker 3: Good to hear from you. I don't know if you

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Speaker 3: think the Reserve Bank could have gone the other way?

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Speaker 3: Was it a time for a cut. Is a reserve

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Speaker 3: bank just a little gun shy? Did they blink? Oh

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Speaker 3: seven two seven oh two one seven oh two? Also,

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Speaker 3: of course your cause on a double one double A

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Speaker 3: three oh seven two and two one four four six,

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Speaker 3: five sixty seven.

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Speaker 1: The Lenny Show with Stephen krutis live on ninety two

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Speaker 1: point seven and one six FM, streaming on the Prime

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Speaker 1: Media Plus naven.

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Speaker 2: And TSTV channel eight five six.

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Speaker 3: Late last year, you heard some predictions on The Money

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Speaker 3: Show suggesting that gold could hit five thousand dollars announced

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Speaker 3: by the end of the year. Before the end of January,

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Speaker 3: gold hit five thousand dollars an ounce and today it

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Speaker 3: was halfway from five thousand to six thousand. Dollars. Went

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Speaker 3: past five thousand dollars on Monday. Today's Thursday hit five thousand,

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Speaker 3: five hundred dollars announced today. Meanwhile, the World Gold Council

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Speaker 3: releasing a report in which they predict still I'm all

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Speaker 3: sustained strong demand. John Reid is the market strategistic the

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Speaker 3: World Gold Council. Good evening, I can imagine you're in

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Speaker 3: high demand today yourself, so thank you for your time.

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Speaker 3: Your report is primarily based on what happened last year.

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Speaker 3: But I imagine you and I presume other people at the

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Speaker 3: Council might be a surprise to so many of us

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Speaker 3: as to how quickly gold is moving at the moment.

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Speaker 4: Well, I'm certainly surprised by how fast it got up

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Speaker 4: to the high today, which was just shy of fixed

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Speaker 4: fifty six hundred dollars announce and that I was actually

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Speaker 4: quite surprised when at three pm London time, gold traded

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Speaker 4: down basically four hundred dollars in the space of nine minutes.

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Speaker 4: So there's been some really strong gains so far this

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Speaker 4: year in the price. But the volatility that we've seen

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Speaker 4: today I suspect will be the shape of things to come.

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Speaker 4: This is not the gold market of twenty twenty three

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Speaker 4: or twenty twenty four. This is a gold market where

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Speaker 4: we've seen lots of investment come into to the space,

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Speaker 4: particularly over the last six to nine months, and that's

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Speaker 4: going to lead to more volativity going forward. Even if

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Speaker 4: we do see strong demand, even if we see prices high,

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Speaker 4: there's going to be moments when you're you know, when

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Speaker 4: you're clutching your throat and wondering, what's the hell's just happened.

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Speaker 3: Well, I mean, part of it, I think is that

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Speaker 3: people have put so much money into gold and gold shares,

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Speaker 3: but let's focus on gold, and suddenly there's that nasty

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Speaker 3: moment when you think this is just too much. I mean,

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Speaker 3: we said other analysts suggesting five thousand dollars is bubble territory,

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Speaker 3: and in the same breath pretty much say but they

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Speaker 3: might be wrong, And who can blame them for saying

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Speaker 3: both those things.

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Speaker 4: Yeah, we're very fortunate that we don't make forecasts about

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Speaker 4: the gold price, and sometimes that can be a bit

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Speaker 4: of a frustration for me. But for the last I

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Speaker 4: don't know, for the last year, it's actually been a

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Speaker 4: relief because, to be honest, anybody that makes a forecast

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Speaker 4: in gold at the moment is really guessing. There's too

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Speaker 4: many factors at play, and some of them are just

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Speaker 4: too hard to predict. One thing we can say with confidence, though,

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Speaker 4: is that the very strong investment demand that we saw

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Speaker 4: last year is likely to continue. The factors that have

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Speaker 4: driven investors to add gold to their portfolios are likely

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Speaker 4: to continue. Lower interest rates, concerns about fed independence, belligerents

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Speaker 4: in terms of military adventures from the White House, all

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Speaker 4: of these factors are likely to continue, and it would

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Speaker 4: take an outbreak of peace, harmony and collaboration I think

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Speaker 4: to take the wind out of gold sales properly this year.

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Speaker 3: Yeah, Unfortunately that seems unlikely. The factor of central central

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Speaker 3: bank buying, I mean that's been a big element to

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Speaker 3: this for quite a long time. Banks are sort of

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Speaker 3: leaving the dollar their buying gold. You suggest towards the

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Speaker 3: end of last year the pace was still at record levels,

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Speaker 3: but it did slow a little. Do you have any

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Speaker 3: idea why that pace slowed a little? Was it just

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Speaker 3: the price was too much? I think the price is

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Speaker 3: playing a role here. If you could imagine that you're

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Speaker 3: a central bank and you've set a target and say

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Speaker 3: you want to have twenty five percent of your reserves

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Speaker 3: in gold, and you've got less than that, so you

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Speaker 3: start buying. That obviously helps, that increases the share that

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Speaker 3: gold makes up of your reserves. But then the gold

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Speaker 3: price goes up sixty five percent, which it did last year.

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Speaker 3: Then suddenly you've got more gold than you expected to,

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Speaker 3: not because you've bought gold, but because the goal price

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Speaker 3: has gone up. So I think that maybe playing a

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Speaker 3: role in causing some slow down in the rate of

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Speaker 3: purchases that we've seen from central banks, it's still a

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Speaker 3: very healthy amount. We saw I think eight hundred and

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Speaker 3: fifty three tons of gold bought by central banks last year.

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Speaker 3: That's lower than the thousand tons that we'd seen in

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Speaker 3: twenty twenty two, twenty twenty three, twenty twenty four, but

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Speaker 3: it's still much more than we'd seen prior to that. Now,

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Speaker 3: in terms of what we get for this year, our

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Speaker 3: central bank and research teams have put their heads together

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Speaker 3: and come up with a central forecast of eight hundred

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Speaker 3: and fifty tons. I personally think that might be a

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Speaker 3: bit high. I think, you know, with the gains we've

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Speaker 3: seen in the gold price, the issues about proportion that

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Speaker 3: gold makes up for foreign exchange reserves will be you know,

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Speaker 3: we'll be having an impact on some central banks. So

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Speaker 3: maybe we see a little bit less net buying this

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Speaker 3: year than the eight hundred and fifty tons that we're expecting,

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Speaker 3: but it should still be a good amount. It should

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Speaker 3: still be a healthy amount, and much more than we saw,

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Speaker 3: say between twenty ten and twenty twenty one. One of

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Speaker 3: the factors of last year, which you point to in

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Speaker 3: your report, is that there was a new record for

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Speaker 3: gold production? Was that just one percent last year? You

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Speaker 3: compare that to how much the price is risen, it's

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Speaker 3: virtually nothing. Obviously, we're seeing sort of some places where

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Speaker 3: people are investing as much as they can and getting

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Speaker 3: gold back into the market. The easiest is probably recycling

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Speaker 3: of gold from different places. But we still don't see

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Speaker 3: that much investment yet in the production of new gold.

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Speaker 3: And that's obviously a time frame issue. It's a time

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Speaker 3: frame issue, but it's also in some respects an exhaustion issue.

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Speaker 3: And I think South Africa is a great example here.

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Speaker 3: When I worked in the South African gold mining industry,

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Speaker 3: we were producing about six hundred and twenty six hundred

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Speaker 3: and thirty tons a year. But some of those minds

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Speaker 3: were getting on for one hundred years old, and many

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Speaker 3: of them have now closed. It's not because the price

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Speaker 3: is too low. It's literally because the gold has been mined.

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Speaker 4: And if I look around the world, you know, people

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Speaker 4: tend to forget that gold mines aren't like factories. They

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Speaker 4: don't last forever. You run out of reserves. Eventually, you've

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Speaker 4: got to keep replacing them with new discoveries, new minds,

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Speaker 4: new shafts, and that really hasn't been taking place fast

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Speaker 4: enough over the last decade. So the industry probably did

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Speaker 4: hit new all time production in twenty twenty five. We'll

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Speaker 4: have to wait until all the mining company's results come

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Speaker 4: out to be absolutely sure, but compare that to the

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Speaker 4: previous all time high that's in twenty eighteen. So we've

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Speaker 4: had seven or eight years really of flattish gold production,

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Speaker 4: and that's probably the medium term outlook. There are some

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Speaker 4: new mines coming on stream, there are some restarts of

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Speaker 4: old operations that were closed around the world, but there

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Speaker 4: are also some minds getting mature and closing too, So

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Speaker 4: it's got to be tough for the industry to grow

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Speaker 4: materially despite these record prices.

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Speaker 3: John Reid really appreciate the time tonight, Thank you, market

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Speaker 3: strategist at the World Gold Council. As he says, gold

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Speaker 3: dropping what was it, several hundred dollars, four hundred dollars

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Speaker 3: in just nine minutes. Volatility may well be the name

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Speaker 3: of the game. Twenty minutes after.

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Speaker 1: Six, Stephen contact at at Stephen.

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Speaker 3: The Reserve Banks Manetary Policy Committee, confirming today you'll continue

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Speaker 3: to pay the same amount on your debt interest rates

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Speaker 3: being kept on hold. Patrick but Lezi as an economist

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Speaker 3: at sun Lam Investments. Patrick, good evening, Thanks for your time.

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Speaker 3: Was it just me or was the tone of the

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Speaker 3: governor quite sort of optimistic about the inflation outlook? I mean, clearly,

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Speaker 3: by any measure, inflation is going to stay quite contained

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Speaker 3: for at least the medium term.

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Speaker 5: Yeah. I think you've got it right.

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Speaker 6: Yeah, So he was very positive about inflation outlook. So

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Speaker 6: for instance this yeah, they revised inflation forecast lower to

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Speaker 6: about three point three and previously, which was in November,

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Speaker 6: they had inflation it's around three point five percent, so

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Speaker 6: just a slight reduction. And the reason why they ritues

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Speaker 6: inflation forecast is because of the currency that has been

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Speaker 6: extremely extremely strong.

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Speaker 5: But now there is the one side.

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Speaker 6: But the thing here is they are targeting inflation at

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Speaker 6: about three percent and they want to anchor inflation expectations

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Speaker 6: at three percent. So the last inflation outcome, which is

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Speaker 6: for December, it was about three point six percent, which

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Speaker 6: is above.

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Speaker 5: Three percent.

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Speaker 6: And also there's three point three percent is above a

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Speaker 6: three percent which is the target. So I think given

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Speaker 6: their inflation is still above the targets, and also there

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Speaker 6: are certainties so globally. So you mentioned Ai for instance,

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Speaker 6: also mentioned the issue of debt and the imbalances, so

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Speaker 6: for instance, in China running a large trade a surplus

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Speaker 6: it is.

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Speaker 5: Yeah, so those risks as well.

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Speaker 6: So as a result, the community leaned more on the

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Speaker 6: question side, but within the community because there was a

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Speaker 6: strong case for a cut.

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Speaker 5: So that is why there were.

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Speaker 6: About two people who preferred a twenty five pass point cut,

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Speaker 6: but four, which is the majority, they opted for a

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Speaker 6: more cautious kind of stance.

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Speaker 3: I mean, I mean, I'm so glad you brought up

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Speaker 3: the issue about the trade imbalance primarily China and the

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Speaker 3: fiscal devisit primarily the US. I mean, at some point

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Speaker 3: those dynamics have to run out of room, and there's

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Speaker 3: no easy way to do that. We'll probably see tariffs

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Speaker 3: here just trying to stop Chinese cars for example. We

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Speaker 3: won't be the only ones.

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Speaker 6: Yeah, no, of course, I mean those risks. There's nothing

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Speaker 6: they can do about those risks.

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Speaker 5: And I think for.

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Speaker 6: Me, what I think is the dominant is more local risks,

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Speaker 6: like for instance with NARSA. Now they are to correct

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Speaker 6: and allow ESCOM to a collect about seventy six a billion,

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Speaker 6: which is very high, so that could have implications for

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Speaker 6: higher electricity tariffs and.

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Speaker 5: It will fit to inflation.

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Speaker 6: And also I think the concerns within the inflation basket.

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Speaker 6: So what has been happening is good prices have been

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Speaker 6: very low, in fact extremely depressed. But the problem is

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Speaker 6: the sticky services component of inflation baskets. For instance, when

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Speaker 6: whether you're looking at medical aid for example, there is

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Speaker 6: running very high.

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Speaker 5: So very sticky.

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Speaker 6: But it is encouraging that inflation expectations at least as

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Speaker 6: drifting lower. So currently five year inflation expectations that are

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Speaker 6: about three point seven percent, which is the lowest on

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Speaker 6: which is the lowest on record. So as inflation expectation

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Speaker 6: is drifting, So what that means is economic agents absolowly

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Speaker 6: adjusting to the reality of lower inflation. But now inflection

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Speaker 6: is still at three point seven percent. And I mean

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Speaker 6: you can see the governor they want inflation at three percent,

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Speaker 6: not at three point seven percent.

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Speaker 3: Sure for years, I mean literally probably a decade, Patrick,

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Speaker 3: We've seen the governor give a sort of lecture every

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Speaker 3: two months at these announcements about the need for fractual

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Speaker 3: reform in the economy. I don't think I'm going to

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Speaker 3: miss the lecture that much, but he didn't give it today. Instead,

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Speaker 3: he reminded us that last year was a watershed year

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Speaker 3: for the economy and its absolutely vital that the reforms continue.

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Speaker 3: I mean, obviously he's correct, but he also clearly thinks

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Speaker 3: that last year was vitally important. Something has shifted. I

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Speaker 3: suppose there's one way of looking at it.

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Speaker 5: Yeah, I think it is very true.

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Speaker 6: So South Africa has been implementing reforms. So they started

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Speaker 6: with operations within their life was phase one and phase

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Speaker 6: two was launched I think last year or a year

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Speaker 6: to four, so implementing reforms and we're beginning to see

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Speaker 6: the benefits of these reforms where they're from the energy side,

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Speaker 6: last year load shedding very minimal.

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Speaker 5: In fact, that load.

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Speaker 6: Sheding I mean any part of the year, most part

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Speaker 6: of the year, we didn't have a load shedding. On

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Speaker 6: the logistics side is also showing some improvement, so we're

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Speaker 6: moving in the right direction.

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Speaker 5: And also I mean we're removed from.

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Speaker 6: Listing and also they introduced new lower inflation targets. So

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Speaker 6: all the combination of all these reforms I mean are

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Speaker 6: very positive for South Africa. There is also why we

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Speaker 6: saw for instance, the rating agency also shifting shifting the outlook.

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Speaker 6: So yeah, so I think I think we I mean

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Speaker 6: South Africa. The sentiment is clearly shifting from where the

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Speaker 6: sentiment was last year or year before. It was extremely negative.

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Speaker 6: But things are tending in the right direction. And I

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Speaker 6: think also just siclically in terms of trade, are also

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Speaker 6: providing that boost for South Africa.

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Speaker 5: So for this year, for.

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Speaker 6: Instance, giving where the comedy crisis, they should provide support

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Speaker 6: for the fiscals for for instance, which I mean we've

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Speaker 6: been struggling on the fiscals side, but now because of

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Speaker 6: terms of trade plus the reforms, whether for on the

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Speaker 6: implication on the implication side, because interest right now and

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Speaker 6: you alls have dropped, so they should put very well

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Speaker 6: for the government finances as well.

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Speaker 3: Patrick brought lezie thank you economists at some LAMB investments,

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Speaker 3: the money show, the market, Graham Conners at the kind

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Speaker 3: of perspective, Graham good evening. Would you have gone for

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Speaker 3: a cat.

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Speaker 7: Good evening, Stephen, you are good to chat to you. Yes, Frankly,

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Speaker 7: I would have probably one of the fifty percent who felt,

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Speaker 7: you know, the tone of the governor not just today

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Speaker 7: but in the run up to it some of the

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Speaker 7: comments out of DeVos, for example, he was sort of

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Speaker 7: teeing us up for it. And I think my view

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Speaker 7: was that if you look at at our South African

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Speaker 7: repar rat at six seventy five compared to the US

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Speaker 7: FED fund rate at the up a band of three

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Speaker 7: seventy five, are inflation rates are not that different. But

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Speaker 7: if I look at it, and I think take the

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Speaker 7: banks for example, they were about a percent firmer today.

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Speaker 7: So I think the market's probably taking my view that

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Speaker 7: it's not if but when they cut, And you know,

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Speaker 7: I agree with Patrick, but I think the reality is

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Speaker 7: if we do get anchored at three percent, that differential

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Speaker 7: between where our interest rates are on the rest of

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Speaker 7: the world actually gives us more than the good old

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Speaker 7: fashioned fifty basis point cut outlook. So yeah, I was

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Speaker 7: hoping and expecting a cut, but it was a fifty

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Speaker 7: to fifty toss of the coin.

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Speaker 3: Gold, I mean, at five five hundred dollars earlier. Platinum

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Speaker 3: also very strong. I noticed though that in fact other

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Speaker 3: miners did better than gold and platinum miners today.

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Speaker 7: Yes, So interestingly enough, you've seen copper power through fourteen thousand,

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Speaker 7: for example, So interestingly the diversified miners that have obviously

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Speaker 7: got more exposure to things like copper and base metals.

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Speaker 7: Actually both the HP bullet and Anglo glenk Or having

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Speaker 7: a good day. But as you say, even when when

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Speaker 7: the gold price was looking a touch better, gold shares

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Speaker 7: under pressure. So you get the feeling that, you know,

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Speaker 7: the equity investors at least are starting to move a

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Speaker 7: little bit closer to the door. But I mean it's

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Speaker 7: just phenomenally if you think about it, Steven, that you know,

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Speaker 7: the daily move in platinum, let's say ninety dollars an

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Speaker 7: answer often that's like ten percent of where the price

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Speaker 7: was late last year, you know, when the price was

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Speaker 7: nine hundred dollars and answer, that's the order of volatility

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Speaker 7: that we've seen.

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Speaker 3: But I think a lot of people.

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Speaker 7: Are sort of feeling, you know, golden platinum has been

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Speaker 7: a you know, like an eighty degree upward slope and

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Speaker 7: that probably is due for a little bit of a correction.

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Speaker 3: Will with down six percent today, there's seasonal update that

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Speaker 3: twenty six weeks to the end of December. I didn't

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Speaker 3: think it was too bad, but clearly people are a

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Speaker 3: bit concerned about it. Yeah, So when you look.

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Speaker 7: At it operationally, and they talk about food sales up seven.

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Speaker 7: I think comparable stores were just over five.

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Speaker 8: You know.

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Speaker 7: Even in personal care things looked a little bit better.

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Speaker 7: Dash is doing well, but it's just a reminder of,

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Speaker 7: you know, how terribly the South African retailers have expanded internationally.

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Speaker 7: So Country Road I think grew revenue at two percent,

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Speaker 7: but it's it's a very very competitive industry, so in

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Speaker 7: a way it was a handbreak. But for me, you know,

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Speaker 7: valuation is really important Stevens. So if you look at it,

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Speaker 7: this company is still delivering similar earnings let's say for

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Speaker 7: the year to June twenty six to what they did

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Speaker 7: maybe ten years ago or even five years ago, so

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Speaker 7: it's not as though we're getting any massive earnings growth.

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Speaker 7: And the thing was sitting at sixty bucks let's say,

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Speaker 7: on a pe of around sixteen times, so I think

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Speaker 7: I think again it's probably more just gravity. But you know,

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Speaker 7: the South African retailers, all of them have have had

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Speaker 7: a really torrid six months. But yeah, operationally it looked better,

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Speaker 7: but I think it's more case of the marketers maybe

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Speaker 7: hoping for for more good news than that actually got

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Speaker 7: from an operational point of.

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Speaker 3: View, Graham Kenneth, thanks so much from the Kurrent perspective.

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Speaker 2: What uped Stephen on seven two seven oh two one.

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Speaker 3: Twenty minutes to seven were good to hear from you tonight.

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Speaker 3: Yesterday on the Money Show, you heard a conversation about

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Speaker 3: the idea of imposing tariffs, newer tariffs, higher tariffs on

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Speaker 3: a cheaper cars, by which we really do mean, let's

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Speaker 3: be clear, Indian and Chinese cars being imported into the country.

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Speaker 3: And you heard from the Chief Commissioner at the International

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Speaker 3: Trade Administration Commission, Aya Bonerawe on the subject. He seemed

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Speaker 3: to be exploring it, excuse me quite carefully. We heard

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Speaker 3: from one of the automotive associations. They're also quite keen,

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Speaker 3: the BMW SACO, Peter van Binsberg, and he was on

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Speaker 3: John Pulman on seven oh two this afternoon and he

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Speaker 3: was quite interesting about why he opposes the imposition of

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Speaker 3: more tariffs by South Africa.

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Speaker 9: The policy in South Africa and very intelligent system and

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Speaker 9: we're asked for and what we asked for when we

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Speaker 9: were there on Tuesday was to look at the various

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Speaker 9: factors in the policy and adjust them in a balanced

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Speaker 9: in a balanced manner so to avoid any unintended consequences.

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Speaker 9: And I think the one unintended consequence of increasing duties

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Speaker 9: to a very high rate would be the increase in

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Speaker 9: prices for the consumer, and that would affect both us,

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Speaker 9: the local manufacturers and the pure importers. Because remember a

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Speaker 9: company like the MW manufacturers X three in South Africa,

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Speaker 9: but we import the rest. So I think it's important

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Speaker 9: that you need to.

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Speaker 3: Look at the big picture.

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Speaker 9: And so the things we're talking about is, yes, maybe

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Speaker 9: take a look at import duties, but nothing radical. Let's

439
00:23:43,160 --> 00:23:45,359
Speaker 9: take a look at the topic of at the lorum

440
00:23:45,400 --> 00:23:48,800
Speaker 9: tax that was designed as a luxury tax on cars

441
00:23:48,800 --> 00:23:52,800
Speaker 9: many years ago. It hasn't moved over years, even decades,

442
00:23:53,160 --> 00:23:55,720
Speaker 9: and so due to inflation and price increase, even the

443
00:23:55,800 --> 00:23:59,119
Speaker 9: cheapest car today attracts at the lorum tax a luxury tax.

444
00:24:00,240 --> 00:24:03,280
Speaker 9: Look at that move that curve. We've proposed to other

445
00:24:03,359 --> 00:24:07,239
Speaker 9: measures like allowing the local manufacturers to rebate their at

446
00:24:07,280 --> 00:24:11,040
Speaker 9: balreum tanks with the GQ rebates we gain by producing

447
00:24:11,040 --> 00:24:14,320
Speaker 9: in South Africa. That would help the price attractiveness of

448
00:24:14,359 --> 00:24:15,680
Speaker 9: locally produced vehicles.

449
00:24:16,440 --> 00:24:19,040
Speaker 3: Well interesting sort of to see the pushback from our

450
00:24:19,080 --> 00:24:22,960
Speaker 3: car industry, Peter and Vinsbergen is the bmw A South

451
00:24:22,960 --> 00:24:24,760
Speaker 3: Africa CEA and you're speaking to seven oh two is

452
00:24:24,840 --> 00:24:27,640
Speaker 3: John Pullman a point that I made last night Stands,

453
00:24:27,680 --> 00:24:30,280
Speaker 3: which is I understand wanting to protect the local industry,

454
00:24:30,280 --> 00:24:33,159
Speaker 3: but as always with trade, consequences go in lots of

455
00:24:33,240 --> 00:24:37,600
Speaker 3: direction and of trade between countries generally speaking, makes things cheaper.

456
00:24:38,200 --> 00:24:42,119
Speaker 3: Tariffs will have completely the opposite effect. Are you happy

457
00:24:42,160 --> 00:24:44,440
Speaker 3: to pay more for a car to protect our industry?

458
00:24:44,800 --> 00:24:48,280
Speaker 3: Seven two seven oh two one seven o two.

459
00:24:47,560 --> 00:24:48,720
Speaker 2: The Lanely Show with.

460
00:24:48,800 --> 00:24:52,680
Speaker 1: Stephen Cruts Live on ninety two point seven and one

461
00:24:52,920 --> 00:24:55,760
Speaker 1: six FM, streaming on the Prime Media Plus.

462
00:24:55,560 --> 00:24:58,800
Speaker 2: NAP and DStv channel eight five six.

463
00:24:58,560 --> 00:25:01,320
Speaker 3: Thirteen minutes to seven. Now the time Well an announcement

464
00:25:01,440 --> 00:25:04,920
Speaker 3: from the Energy regulator NURSES today it's approved a new

465
00:25:05,119 --> 00:25:09,600
Speaker 3: temporary cheaper power tariff for two smelters that have said

466
00:25:09,600 --> 00:25:12,880
Speaker 3: they'll be shutting down at current electricity prices. The man

467
00:25:12,880 --> 00:25:16,320
Speaker 3: called Chrome and the Glenn call Moraphe Chrome Venture. They'll

468
00:25:16,359 --> 00:25:19,160
Speaker 3: now be charged eighty seven cents a killer what hour

469
00:25:19,200 --> 00:25:21,760
Speaker 3: by eskim. That's a lot cheaper than what they were

470
00:25:21,760 --> 00:25:25,439
Speaker 3: paying before. Nellis Bester is the chair of a ferro

471
00:25:25,560 --> 00:25:30,400
Speaker 3: Alloy Producers Association nell US Good Evening. There's a lot

472
00:25:30,400 --> 00:25:32,440
Speaker 3: of numbers in this, but just to be clear, eighty

473
00:25:32,480 --> 00:25:35,760
Speaker 3: seven cents per killer what hour? That doesn't actually help

474
00:25:35,840 --> 00:25:38,000
Speaker 3: you make a profit? Right? That's still too high? Is

475
00:25:38,040 --> 00:25:38,400
Speaker 3: that right?

476
00:25:38,480 --> 00:25:42,800
Speaker 10: That's right, A good Evening, Steven, Yes, two hundred percent correct.

477
00:25:42,800 --> 00:25:46,439
Speaker 10: You know, I think this industry, not only ferrochrome, but

478
00:25:46,800 --> 00:25:50,800
Speaker 10: the rest of the beneficiation industry in South Africa has

479
00:25:50,880 --> 00:25:54,640
Speaker 10: made it clear through through various simulations, that we've done

480
00:25:54,680 --> 00:25:58,520
Speaker 10: that to break even pointy sixty two cents, and this

481
00:25:58,720 --> 00:26:02,840
Speaker 10: industry cannot be maintained at this eighty seven cent.

482
00:26:03,000 --> 00:26:05,560
Speaker 3: It's a temporary relief, but it's.

483
00:26:05,440 --> 00:26:09,520
Speaker 10: Definitely not going to save the smelters in South Africa

484
00:26:09,640 --> 00:26:12,280
Speaker 10: if that is the lowest that we can go.

485
00:26:14,200 --> 00:26:19,600
Speaker 3: Asystem that made the application, were you part of the process.

486
00:26:19,600 --> 00:26:21,240
Speaker 3: I mean, it's quite strange in a way that Eskin

487
00:26:21,320 --> 00:26:23,679
Speaker 3: makes the application. I'm sure there's a technical reason for that,

488
00:26:24,080 --> 00:26:26,000
Speaker 3: but were you part of the formal process? I mean

489
00:26:26,160 --> 00:26:28,520
Speaker 3: the hearings I think two days ago, were you part

490
00:26:28,520 --> 00:26:31,600
Speaker 3: of those? Yes?

491
00:26:31,680 --> 00:26:35,760
Speaker 10: Of course FARPA presented and various of the other smelters

492
00:26:35,760 --> 00:26:39,520
Speaker 10: within South Africa also presented the case to to NASA

493
00:26:39,560 --> 00:26:44,480
Speaker 10: at the public participation hearing. So yes, we all indicated

494
00:26:44,560 --> 00:26:47,760
Speaker 10: that we are happy that there is the interim relief

495
00:26:47,840 --> 00:26:51,959
Speaker 10: for the chrome industry. It can certainly alleviate some of

496
00:26:52,000 --> 00:26:53,919
Speaker 10: the pain and the hardship, but it's not going to

497
00:26:53,920 --> 00:26:54,960
Speaker 10: take the problem away.

498
00:26:56,160 --> 00:26:58,439
Speaker 3: And therefore, you know, we were supportive of the.

499
00:27:00,080 --> 00:27:05,520
Speaker 10: Call that we need to extend this to the other industries,

500
00:27:05,600 --> 00:27:09,000
Speaker 10: but definitely get to the sixty two cent that is

501
00:27:09,200 --> 00:27:09,960
Speaker 10: most important.

502
00:27:11,160 --> 00:27:14,040
Speaker 3: From every report I've seen, there's still no explanation from

503
00:27:14,119 --> 00:27:16,320
Speaker 3: ESKIM as to how this is going to be funded.

504
00:27:16,359 --> 00:27:18,640
Speaker 3: So I completely accept what you say, eighty seven cents

505
00:27:18,640 --> 00:27:21,640
Speaker 3: ago or what hour is not enough. Sixty two cents

506
00:27:21,720 --> 00:27:23,440
Speaker 3: might do it. I understand that's the sort of long

507
00:27:23,520 --> 00:27:26,240
Speaker 3: term for the government wants to look at. But Nurse

508
00:27:26,520 --> 00:27:29,439
Speaker 3: did say from all the reports that I've seen that

509
00:27:29,520 --> 00:27:32,359
Speaker 3: it should not be other consumers who end up paying more.

510
00:27:32,440 --> 00:27:35,080
Speaker 3: To put it bluntly, it should not be other consumers

511
00:27:35,080 --> 00:27:38,480
Speaker 3: that end up subsidizing you. Are you able to get

512
00:27:38,520 --> 00:27:42,040
Speaker 3: us any information on where the money is going to

513
00:27:42,080 --> 00:27:43,399
Speaker 3: come from to make this happen.

514
00:27:45,600 --> 00:27:48,800
Speaker 10: I'm really not sure who's going to pay for the

515
00:27:48,840 --> 00:27:51,600
Speaker 10: bill of the eighty seven cent this is the additional

516
00:27:51,640 --> 00:27:56,359
Speaker 10: thirty five percent reduction. Remember, both the companies of Lincore

517
00:27:56,400 --> 00:27:59,960
Speaker 10: and some man Core does have approof NPA negotiated price agreement,

518
00:28:00,720 --> 00:28:03,800
Speaker 10: so there's a legal contract on which they've declared hardship,

519
00:28:03,880 --> 00:28:06,639
Speaker 10: which then went to es COM and Iscom approached NASA

520
00:28:07,280 --> 00:28:12,200
Speaker 10: for a temporary relief on the tariff. Now my understanding

521
00:28:12,480 --> 00:28:17,600
Speaker 10: is that for the NPAs, it is the consumer or

522
00:28:17,680 --> 00:28:20,119
Speaker 10: government that will have to stand in for this. And

523
00:28:20,200 --> 00:28:24,240
Speaker 10: obviously this is not sustainable. The sixty two cent solution

524
00:28:25,119 --> 00:28:28,800
Speaker 10: that has been proposed by government, is Com and Industry

525
00:28:29,080 --> 00:28:33,760
Speaker 10: have been calculated very precisely and for that there is

526
00:28:33,800 --> 00:28:35,159
Speaker 10: no funding necessary.

527
00:28:35,200 --> 00:28:36,240
Speaker 3: There is a model that.

528
00:28:36,200 --> 00:28:41,480
Speaker 10: Can work which involves mining activities, is COM and industry

529
00:28:41,480 --> 00:28:44,920
Speaker 10: and obviously the government that can get to that figure

530
00:28:44,960 --> 00:28:48,360
Speaker 10: without any subsidy. So that's really the win win solution

531
00:28:48,640 --> 00:28:50,720
Speaker 10: that we want to see and at the.

532
00:28:50,680 --> 00:28:55,320
Speaker 3: Soonest okay, but I mean, just in case I've misunderstood you,

533
00:28:55,320 --> 00:28:58,000
Speaker 3: you're saying eighty seven cents. We don't know where the

534
00:28:58,000 --> 00:29:00,920
Speaker 3: money is coming from, but sixty two cents could be sustainable.

535
00:29:01,000 --> 00:29:07,200
Speaker 10: Also because the eighty seven cent as I've indicated, is

536
00:29:07,280 --> 00:29:09,120
Speaker 10: part of the NPA which.

537
00:29:08,920 --> 00:29:09,720
Speaker 5: Has been approved.

538
00:29:09,760 --> 00:29:14,080
Speaker 10: So there's a specific contract between these companies and es

539
00:29:14,160 --> 00:29:17,760
Speaker 10: COM and that is subsidized. We know that as part

540
00:29:17,800 --> 00:29:22,280
Speaker 10: of the tariff increases, all of us in public does

541
00:29:22,360 --> 00:29:25,720
Speaker 10: pay a portion of that NPA subsidy. When we talk

542
00:29:25,760 --> 00:29:29,720
Speaker 10: about the sixty two industrial tariff, this is a whole

543
00:29:29,760 --> 00:29:35,040
Speaker 10: different ballgame whereby we actually make use of coal mines

544
00:29:35,080 --> 00:29:37,880
Speaker 10: and many of these are dormant today. So there is

545
00:29:38,040 --> 00:29:42,040
Speaker 10: amplitude of coal available in South Africa which then is

546
00:29:42,120 --> 00:29:46,360
Speaker 10: generated by ESCOM in the power stations that is idle today,

547
00:29:46,440 --> 00:29:49,480
Speaker 10: so low cost plus. We have a huge quantity of

548
00:29:49,600 --> 00:29:53,920
Speaker 10: excess power available today from ESCOM. I mean only in

549
00:29:54,040 --> 00:29:57,160
Speaker 10: terms of rooftop it is exceeding seven thousand mega what

550
00:29:57,320 --> 00:30:01,920
Speaker 10: now and in the renewable program is also giving seven

551
00:30:02,000 --> 00:30:06,360
Speaker 10: thousand to that. So a combination of additional generation through

552
00:30:06,960 --> 00:30:11,080
Speaker 10: new coal contracts with coal mines that is eager to supply,

553
00:30:12,240 --> 00:30:15,640
Speaker 10: we can get to that figure of sixty two cent Nelis.

554
00:30:15,680 --> 00:30:17,880
Speaker 3: I really appreciate the clarity. Thank you so much. Nelli.

555
00:30:17,920 --> 00:30:22,440
Speaker 3: Sperster is the chair of the Pharaoh Alloy Producers Association.

556
00:30:23,360 --> 00:30:26,040
Speaker 8: The Money Show with Stephen Quetez is brought to you

557
00:30:26,120 --> 00:30:29,640
Speaker 8: by abs as cib a Pan African bank invested in

558
00:30:29,680 --> 00:30:33,080
Speaker 8: your story and the potential it can unlock because your

559
00:30:33,160 --> 00:30:36,400
Speaker 8: story matters as as the restered FSP.

560
00:30:37,360 --> 00:30:40,840
Speaker 3: SEX minus to seven the time. Well, a reminder today

561
00:30:41,160 --> 00:30:45,520
Speaker 3: of how fragile our gas supplies can sometimes look. Cecil

562
00:30:45,600 --> 00:30:48,880
Speaker 3: which supplies Guess to Joe Bergsy Goalie Gas saying that

563
00:30:48,960 --> 00:30:51,680
Speaker 3: the recent flooding in Mozambie could lead to some shortages.

564
00:30:51,800 --> 00:30:54,840
Speaker 3: Just to be clear, e Gooli Gas saying their systems

565
00:30:54,840 --> 00:30:56,880
Speaker 3: are running normally at the moment. There's really no reason

566
00:30:57,200 --> 00:31:00,760
Speaker 3: to worry about this, but confirmation in Parliament yesterday our

567
00:31:00,800 --> 00:31:04,400
Speaker 3: government is talking to Mosenbeaks government about opening new gas

568
00:31:04,440 --> 00:31:07,680
Speaker 3: fields there. Jako Human is the executive director at the

569
00:31:07,720 --> 00:31:11,440
Speaker 3: Industrial Gas Users Association of Southern Africa. Yeah, COO, good evening.

570
00:31:11,840 --> 00:31:14,960
Speaker 3: You particularly and your association have been warning of a

571
00:31:15,000 --> 00:31:17,000
Speaker 3: sort of gas clu for quite a while. We know

572
00:31:17,480 --> 00:31:19,719
Speaker 3: some of the fields we rely on in Mozambiqua are

573
00:31:19,720 --> 00:31:22,680
Speaker 3: about to run out. How worried are you now that

574
00:31:22,720 --> 00:31:24,400
Speaker 3: this is still going to be a major problem in

575
00:31:24,400 --> 00:31:25,440
Speaker 3: about two years time?

576
00:31:27,360 --> 00:31:30,240
Speaker 11: Good evening, Stephen, and it's good to talk again. The

577
00:31:31,520 --> 00:31:35,239
Speaker 11: gas cliff is real, and I think everyone acknowledges that,

578
00:31:35,920 --> 00:31:40,040
Speaker 11: you know, whether there's government or business and other stakeholders,

579
00:31:40,520 --> 00:31:44,920
Speaker 11: we are certainly concerned the gas cliff. Of course, we

580
00:31:45,040 --> 00:31:49,840
Speaker 11: have gas supply potentially up to twenty thirty and at

581
00:31:49,840 --> 00:31:53,240
Speaker 11: that point, of course, the current gas supplier SASIL, is

582
00:31:53,240 --> 00:31:55,360
Speaker 11: indicated that it will not be in a position to

583
00:31:55,400 --> 00:31:57,360
Speaker 11: supply the market with any gas.

584
00:31:57,640 --> 00:32:00,000
Speaker 3: Now it may sound far in the future.

585
00:32:00,160 --> 00:32:02,160
Speaker 11: The issue, though, of course, is you've got to work

586
00:32:02,200 --> 00:32:06,320
Speaker 11: backwards from that point in time to understand that significant

587
00:32:06,360 --> 00:32:09,560
Speaker 11: infrastructure developments are required. We need to build and operate

588
00:32:09,600 --> 00:32:14,920
Speaker 11: and construct our energy liquefied natural gas terminals, et cetera.

589
00:32:15,320 --> 00:32:18,200
Speaker 11: And that takes time. So it really leaves us with

590
00:32:18,280 --> 00:32:23,160
Speaker 11: an extremely narrow window in order to put a commercial

591
00:32:23,200 --> 00:32:26,959
Speaker 11: construct together for the importation of gas.

592
00:32:27,040 --> 00:32:27,280
Speaker 3: Now.

593
00:32:28,040 --> 00:32:33,360
Speaker 11: The government is particularly unclear at this point, at least

594
00:32:33,360 --> 00:32:36,240
Speaker 11: to the industry in terms of where they find themselves.

595
00:32:36,760 --> 00:32:40,160
Speaker 11: Our calls are really around how do we stack the

596
00:32:40,200 --> 00:32:43,600
Speaker 11: demand and sufficient demand to underwrite and bank this type

597
00:32:43,640 --> 00:32:46,760
Speaker 11: of infrastructure that we refer to, And secondly, what is

598
00:32:46,760 --> 00:32:50,360
Speaker 11: the fiscal construct of a transaction of this nature. Yes,

599
00:32:51,120 --> 00:32:55,280
Speaker 11: we've seen the media recently around memorandum of understanding being

600
00:32:55,320 --> 00:32:59,240
Speaker 11: concluded between the two governments, etc. But I think in

601
00:32:59,280 --> 00:33:03,520
Speaker 11: the South Africa context we should guard against celebrating signing

602
00:33:03,560 --> 00:33:06,880
Speaker 11: of memorandum of understanding. What is missing in those are

603
00:33:06,920 --> 00:33:09,520
Speaker 11: typically hard to execute these plans and how to put

604
00:33:09,520 --> 00:33:12,360
Speaker 11: the commercial constructs together, and we are far away from that.

605
00:33:12,480 --> 00:33:15,360
Speaker 3: Yes, we are concerned. I mean it's one thing to

606
00:33:15,360 --> 00:33:17,440
Speaker 3: say we're going to do this, but when it comes

607
00:33:17,520 --> 00:33:20,560
Speaker 3: to gas in particular, there's so much infrastructure that would

608
00:33:20,560 --> 00:33:23,080
Speaker 3: need to be built, never mind working out who gets

609
00:33:23,080 --> 00:33:25,400
Speaker 3: what who who? You know, how this is going to

610
00:33:25,400 --> 00:33:28,600
Speaker 3: be administered. I mean, would see whatever happens. From what

611
00:33:28,680 --> 00:33:32,160
Speaker 3: you say, Yaku, it's not going to get done in time.

612
00:33:32,240 --> 00:33:35,280
Speaker 3: I mean, namely one big construction project that has been

613
00:33:37,320 --> 00:33:40,280
Speaker 3: this is the risk Stephen. I mean, the gas supply

614
00:33:40,440 --> 00:33:46,320
Speaker 3: chain is extremely complex. You typically sit with upstream upstream developments,

615
00:33:46,640 --> 00:33:50,840
Speaker 3: particularly if you have domestic gas or regional gas availability

616
00:33:50,960 --> 00:33:54,000
Speaker 3: or energy. So we call that the upstream part of it.

617
00:33:54,040 --> 00:33:55,960
Speaker 3: The middle pieces of course, the midstream.

618
00:33:56,040 --> 00:33:58,760
Speaker 11: You know, how do you connect those molecules with the

619
00:33:58,800 --> 00:34:02,880
Speaker 11: markets where the gas are required? So so it it

620
00:34:03,400 --> 00:34:05,840
Speaker 11: and then you're sitting with a downstream demand. You have

621
00:34:05,920 --> 00:34:09,239
Speaker 11: to build out the demand to underwrite and bank all

622
00:34:09,239 --> 00:34:13,160
Speaker 11: of the above. And and it's that conversation where we

623
00:34:13,200 --> 00:34:17,640
Speaker 11: believe requires a critical coordination by the government to what

624
00:34:17,680 --> 00:34:20,279
Speaker 11: we refer to as the demand stack. South Africa needs

625
00:34:20,320 --> 00:34:24,640
Speaker 11: to commit to a particular demand profile. The difficulty with industry,

626
00:34:24,680 --> 00:34:29,000
Speaker 11: despite all its initiatives around gas up the establishment of

627
00:34:29,000 --> 00:34:32,480
Speaker 11: a commercial platform or market platform for gas is scale.

628
00:34:32,960 --> 00:34:36,480
Speaker 11: Industry doesn't doesn't have sufficient scale to underwrite this. We

629
00:34:36,560 --> 00:34:40,920
Speaker 11: need other sectors, the power sectors, the petrochemical sectors actually

630
00:34:41,000 --> 00:34:44,760
Speaker 11: to stack this demand out and it's critical. We are really,

631
00:34:44,880 --> 00:34:47,840
Speaker 11: we are really running out of time and we simply

632
00:34:47,880 --> 00:34:49,240
Speaker 11: don't know where the government stands.

633
00:34:50,239 --> 00:34:53,240
Speaker 3: Is governments I mean treating this with a necessary urgency

634
00:34:53,280 --> 00:34:55,680
Speaker 3: from your point of view, once you said so far

635
00:34:55,760 --> 00:34:56,880
Speaker 3: it doesn't sound like it.

636
00:34:58,640 --> 00:34:59,239
Speaker 12: We don't know.

637
00:35:00,960 --> 00:35:04,120
Speaker 11: That's the short answer we've been asking for. I think

638
00:35:04,160 --> 00:35:06,960
Speaker 11: the last time we had constructive engagements, particularly in this

639
00:35:07,040 --> 00:35:12,080
Speaker 11: time of crisis, almost was roughly two years ago, and

640
00:35:13,000 --> 00:35:17,240
Speaker 11: since then we simply don't know where the government stands

641
00:35:17,239 --> 00:35:20,440
Speaker 11: in terms of its action plans and what it is required.

642
00:35:20,680 --> 00:35:23,840
Speaker 11: There is an absolute need for collaboration between government and

643
00:35:23,880 --> 00:35:27,920
Speaker 11: private sector, and we have difficulty picking up that diraction clearly.

644
00:35:28,880 --> 00:35:32,000
Speaker 3: Yachure Human thanks very much indeed, executive officer of the

645
00:35:32,040 --> 00:35:35,440
Speaker 3: Industrial Gas Users Association of South Africa. And it sort

646
00:35:35,480 --> 00:35:37,759
Speaker 3: of reminds me that there's been talk about this for

647
00:35:37,760 --> 00:35:40,680
Speaker 3: such a long time and we hear so little from government.

648
00:35:40,719 --> 00:35:42,840
Speaker 3: Now government might be doing all the right things behind

649
00:35:42,840 --> 00:35:45,800
Speaker 3: the scenes, it's possible, but if you don't tell everyone

650
00:35:45,920 --> 00:35:48,640
Speaker 3: that that's happening, well, then you're going to have problems

651
00:35:48,640 --> 00:35:50,640
Speaker 3: because people are still going to panic. I do think

652
00:35:50,680 --> 00:35:53,239
Speaker 3: maybe the time is comfortable of government communication on this

653
00:35:53,280 --> 00:35:55,880
Speaker 3: and if there is a major issue to say what

654
00:35:55,960 --> 00:35:58,640
Speaker 3: the major issue is. I'm reminded, of course that when

655
00:35:58,680 --> 00:36:01,919
Speaker 3: you're dealing with another country, things always just about ten

656
00:36:02,000 --> 00:36:04,640
Speaker 3: times as complex because no one wants to be seen

657
00:36:04,640 --> 00:36:06,759
Speaker 3: to be putting pressure on another country, and that gets

658
00:36:06,800 --> 00:36:10,680
Speaker 3: particularly difficult. We'll be talking more about AI in the

659
00:36:10,680 --> 00:36:13,399
Speaker 3: next little while, strategy plans and small business and don't

660
00:36:13,400 --> 00:36:16,080
Speaker 3: forget investment in school. Tonight is a time to ditch

661
00:36:16,120 --> 00:36:18,040
Speaker 3: the dollar. It's seven o'clock.

662
00:36:19,239 --> 00:36:23,480
Speaker 2: And now the Money Show with Stephen Credits on seven

663
00:36:23,560 --> 00:36:23,960
Speaker 2: oh two.

664
00:36:24,480 --> 00:36:27,440
Speaker 3: Let's walk little the Money Show with Stephen Crutis is

665
00:36:27,440 --> 00:36:29,840
Speaker 3: brought to you by ABS, a corporate and investment banking,

666
00:36:29,840 --> 00:36:33,280
Speaker 3: a Pan African bank that's invested in your story because

667
00:36:33,400 --> 00:36:37,080
Speaker 3: your story matters. Good evening, seven minutes after seven the

668
00:36:37,239 --> 00:36:41,480
Speaker 3: time we'll talk about AI agents an agent sprawl. I

669
00:36:41,480 --> 00:36:43,320
Speaker 3: had to sort of read it three times before I

670
00:36:43,400 --> 00:36:46,359
Speaker 3: made sure I understood it. Arthur Goldstack, in fact, will

671
00:36:46,400 --> 00:36:49,239
Speaker 3: explain that to you in just a moment in our

672
00:36:49,360 --> 00:36:53,400
Speaker 3: tech feature in Small Business Focus tonight. Why it's so

673
00:36:53,560 --> 00:36:56,960
Speaker 3: hard for small businesses to actually implement a particular strategy.

674
00:36:57,280 --> 00:36:59,040
Speaker 3: I mean, I've so often been in a business or

675
00:36:59,080 --> 00:37:01,360
Speaker 3: a meeting or a thing. I mean, for goodnessake, I

676
00:37:01,400 --> 00:37:04,640
Speaker 3: think tennis clubs and strategy meetings nowadays, and people will

677
00:37:04,640 --> 00:37:07,920
Speaker 3: spend hours talking about the right strategy, but no one

678
00:37:07,960 --> 00:37:09,480
Speaker 3: ever implements it. Why is that?

679
00:37:10,000 --> 00:37:10,160
Speaker 13: Now?

680
00:37:10,360 --> 00:37:14,680
Speaker 3: Alon Rees is the business incubation pioneer CEO at Race Cars.

681
00:37:15,040 --> 00:37:17,480
Speaker 3: We'll hear from him in a moment, and then should

682
00:37:17,520 --> 00:37:21,280
Speaker 3: you be ditching the dollar? We'll be speaking to Patrick

683
00:37:21,360 --> 00:37:25,600
Speaker 3: Mettidi and Gary Boyson tonight in Investment School this evening.

684
00:37:25,880 --> 00:37:27,560
Speaker 3: Good to hear from you. O double one double A

685
00:37:27,640 --> 00:37:29,840
Speaker 3: three oh seven two two one four four six, O

686
00:37:29,920 --> 00:37:32,720
Speaker 3: five six seven and voice notes on seven two seven

687
00:37:32,719 --> 00:37:34,200
Speaker 3: oh two one seven O two.

688
00:37:35,200 --> 00:37:39,160
Speaker 1: The Laly Show with Stephen crudis live on ninety two

689
00:37:39,160 --> 00:37:42,520
Speaker 1: point seven and one six FM, streaming on the Prime

690
00:37:42,600 --> 00:37:43,320
Speaker 1: Media Plus.

691
00:37:43,200 --> 00:37:46,120
Speaker 2: NAP and DStv channel eight five six.

692
00:37:46,200 --> 00:37:48,040
Speaker 3: I'm sure you know by now that I'm a resident

693
00:37:48,160 --> 00:37:51,560
Speaker 3: in joe Burg, and when I hear the story around

694
00:37:51,640 --> 00:37:55,040
Speaker 3: how the sort of vote of confidence in the ANC

695
00:37:55,320 --> 00:37:59,160
Speaker 3: mayor there, Dada Morrero has now been deferred. And when

696
00:37:59,160 --> 00:38:02,240
Speaker 3: you hear of the fight, the sort of infighting among

697
00:38:02,280 --> 00:38:05,520
Speaker 3: the coalition, and then it seems the solution to all

698
00:38:05,560 --> 00:38:08,000
Speaker 3: of joe Berg's problems is to have a position of

699
00:38:08,080 --> 00:38:11,640
Speaker 3: deputy mayor, and it seems so transparent. The reason they

700
00:38:11,640 --> 00:38:15,480
Speaker 3: want a deputy mayorship is simply so that the current leader,

701
00:38:15,520 --> 00:38:20,880
Speaker 3: the newly elected leader of the ANC's Joeberg region, Loiso Masoko,

702
00:38:21,239 --> 00:38:24,200
Speaker 3: can take over that position. And I mean in the meantime,

703
00:38:24,280 --> 00:38:26,560
Speaker 3: and I don't know if anyone's thought this through. You

704
00:38:26,640 --> 00:38:29,080
Speaker 3: have do de Morrero, who is the mayor of jo Burg.

705
00:38:29,200 --> 00:38:34,600
Speaker 3: He says that the ANC's regional election that saw him

706
00:38:34,680 --> 00:38:39,480
Speaker 3: losing was wrong. He's contesting, he's disputing the outcome, but

707
00:38:39,600 --> 00:38:44,400
Speaker 3: the Joeberg a n C says no, the outcome was correct.

708
00:38:45,120 --> 00:38:48,000
Speaker 3: What they're saying then, is that do de Morrero is

709
00:38:48,040 --> 00:38:51,720
Speaker 3: not telling the truth. But this person is the mayor

710
00:38:51,800 --> 00:38:54,799
Speaker 3: of joe Burg and he's kept there by the joe

711
00:38:54,880 --> 00:38:58,640
Speaker 3: Burg region of the ANC. I mean, is it just me?

712
00:38:59,360 --> 00:39:01,640
Speaker 3: It just doesn't seem to make sense sometimes. And in

713
00:39:01,680 --> 00:39:05,040
Speaker 3: the meantime, I don't know what's going to happen in

714
00:39:05,120 --> 00:39:07,799
Speaker 3: the joe burgay and see when it comes to who

715
00:39:07,920 --> 00:39:10,480
Speaker 3: is going to run as the candidate. Is it going

716
00:39:10,520 --> 00:39:13,759
Speaker 3: to be Morrero in the local elections? Surely not. Is

717
00:39:13,760 --> 00:39:18,640
Speaker 3: it going to be Lismusoko? Probably is Latuli House going

718
00:39:18,680 --> 00:39:20,280
Speaker 3: to come in and say, actually we need a national

719
00:39:20,280 --> 00:39:23,800
Speaker 3: figure against Helen Zillah because we know she's going to

720
00:39:23,840 --> 00:39:26,279
Speaker 3: be the candidate for the DA. And I guarantee you

721
00:39:26,320 --> 00:39:29,120
Speaker 3: there'll be demands for public debates on this. There's gonna

722
00:39:29,120 --> 00:39:30,719
Speaker 3: be a lot to watch in Joeberg over the next

723
00:39:30,800 --> 00:39:33,959
Speaker 3: few months. I suspect your views O seven two seven

724
00:39:34,080 --> 00:39:34,880
Speaker 3: two one seven.

725
00:39:34,680 --> 00:39:38,000
Speaker 2: O two how many shall take? Thursday?

726
00:39:39,200 --> 00:39:42,080
Speaker 3: Arthur Goldstuck, finder of Worldwide Works, joining us now in

727
00:39:42,160 --> 00:39:45,279
Speaker 3: for ci Pumolela this evening, Arthur Haws has been a while,

728
00:39:45,320 --> 00:39:48,000
Speaker 3: thanks so much for joining us. We're talking about AI

729
00:39:48,120 --> 00:39:51,120
Speaker 3: agents and agent sprawl, and when I hear the phrase

730
00:39:51,200 --> 00:39:54,520
Speaker 3: agent sprawl, I think of people in very dark black

731
00:39:54,640 --> 00:39:57,879
Speaker 3: sort of suits to work for the FBI, and they're

732
00:39:57,920 --> 00:40:01,799
Speaker 3: all over the place. Just balance me here first, what

733
00:40:01,880 --> 00:40:05,440
Speaker 3: are AI agents high seeming?

734
00:40:05,520 --> 00:40:09,640
Speaker 13: Well, think of it like the Joeberg City Council, where

735
00:40:09,960 --> 00:40:14,760
Speaker 13: you've got someone for every role, but numerous people backing

736
00:40:14,880 --> 00:40:17,759
Speaker 13: up every role as well, and eventually you don't know

737
00:40:17,800 --> 00:40:21,360
Speaker 13: who's doing what. So it's a much like with our agents.

738
00:40:21,360 --> 00:40:24,040
Speaker 13: But to step back a moment, an AI agent is

739
00:40:24,560 --> 00:40:27,280
Speaker 13: an AI app that does to work for you without

740
00:40:27,360 --> 00:40:30,920
Speaker 13: you having to keep asking it. So it doesn't simply

741
00:40:30,960 --> 00:40:34,319
Speaker 13: answer questions like chat GPT or Microsoft co Pilot or

742
00:40:34,360 --> 00:40:39,960
Speaker 13: Google Gemini. It actually watches information, pools data together, can

743
00:40:40,040 --> 00:40:43,319
Speaker 13: send messages, prepare reports because of those you're going to

744
00:40:43,360 --> 00:40:47,040
Speaker 13: want to report and trigger actions automatically. It sounds like

745
00:40:47,800 --> 00:40:49,759
Speaker 13: a disaster, wheen didn't you happen? But to a lot

746
00:40:49,760 --> 00:40:53,080
Speaker 13: of functions in the corporate world that you want to

747
00:40:53,200 --> 00:40:58,320
Speaker 13: happen automatically. As certain pieces of information trigger certain events,

748
00:40:58,440 --> 00:41:02,040
Speaker 13: you want an automatically delivered to you with talking to

749
00:41:02,080 --> 00:41:04,160
Speaker 13: ask for it. And that's the essentially what an agent

750
00:41:04,239 --> 00:41:08,480
Speaker 13: will do. It's a digital assistant that keeps working in

751
00:41:08,520 --> 00:41:12,000
Speaker 13: the background. The problem with this is that all the

752
00:41:13,000 --> 00:41:18,240
Speaker 13: big AI software companies are coming up with agent strategies.

753
00:41:19,040 --> 00:41:22,520
Speaker 13: Excited about two years ago with coming called salesforce, who

754
00:41:23,080 --> 00:41:25,719
Speaker 13: are in effect u should in the era of the

755
00:41:25,760 --> 00:41:30,440
Speaker 13: AI agent with sales agents and tools, and very quickly

756
00:41:30,480 --> 00:41:33,960
Speaker 13: it became the dominant term. And now you can create

757
00:41:33,960 --> 00:41:36,279
Speaker 13: your own agent for almost any purpose you want. You

758
00:41:36,320 --> 00:41:39,359
Speaker 13: can create an agent right now while asking JPT or

759
00:41:39,360 --> 00:41:42,200
Speaker 13: co pilots to do it for you, or a Gemini.

760
00:41:43,160 --> 00:41:46,479
Speaker 13: But the problem with this is, especially in their business world,

761
00:41:47,200 --> 00:41:51,960
Speaker 13: people are now creating agents handover fist and it's getting

762
00:41:52,640 --> 00:41:55,080
Speaker 13: a bit out of control. The IDs C, the not

763
00:41:55,280 --> 00:41:59,080
Speaker 13: the local on the International Data Corporation Estimate set are

764
00:41:59,080 --> 00:42:02,600
Speaker 13: gained you one point brilliant AI agents by twenty twenty

765
00:42:02,640 --> 00:42:05,279
Speaker 13: eight around the world. And I thought of that, and

766
00:42:05,320 --> 00:42:09,200
Speaker 13: I thought that's crazy. That's just a mess, and we

767
00:42:09,680 --> 00:42:11,560
Speaker 13: need to describe that mess. So the term I came

768
00:42:11,640 --> 00:42:15,000
Speaker 13: up with was agents scrawl, because it feels like scrawled

769
00:42:15,040 --> 00:42:15,279
Speaker 13: that you.

770
00:42:15,320 --> 00:42:19,080
Speaker 3: Country and I mean, the problem, Arthur, is that I write,

771
00:42:20,120 --> 00:42:22,239
Speaker 3: I get someone, you know, I get chut GPT or

772
00:42:22,280 --> 00:42:25,000
Speaker 3: whatever to great an agent for me to I don't know,

773
00:42:25,120 --> 00:42:27,840
Speaker 3: track the local football league or something, and then I

774
00:42:27,880 --> 00:42:31,200
Speaker 3: forget about it. And isn't that the exactly that's never culd.

775
00:42:31,239 --> 00:42:32,520
Speaker 3: It never never goes away.

776
00:42:33,520 --> 00:42:36,520
Speaker 13: Exactly. People create the agents and when the use goes away,

777
00:42:36,520 --> 00:42:39,000
Speaker 13: they forget about it. The problem is that agents don't

778
00:42:39,040 --> 00:42:42,680
Speaker 13: sit idle. They're still reading data or moving information in

779
00:42:43,160 --> 00:42:48,440
Speaker 13: business at triggering workflows, et cetera. And today was the

780
00:42:48,480 --> 00:42:52,640
Speaker 13: Microsoft AI Tour in Santin at the Convention Center, and

781
00:42:53,040 --> 00:42:55,480
Speaker 13: I've got to sit down with Mark Juban, who's the

782
00:42:55,520 --> 00:43:00,160
Speaker 13: corporate vice president for Commercial cloud Solutions at Microsoft, and

783
00:43:00,200 --> 00:43:04,000
Speaker 13: he was in Jannsburg to deliver a keynote at the event,

784
00:43:04,280 --> 00:43:07,440
Speaker 13: and I asked him about the concept of AI score

785
00:43:07,880 --> 00:43:11,400
Speaker 13: and he fully agreed with that. He said that agents

786
00:43:11,800 --> 00:43:16,040
Speaker 13: organizations are already rolling out these agents department by department,

787
00:43:16,120 --> 00:43:21,360
Speaker 13: often without any oversight, and managers are becoming almost agent

788
00:43:21,480 --> 00:43:24,479
Speaker 13: managers or agent bosses, and they've got to assign work

789
00:43:24,560 --> 00:43:28,560
Speaker 13: to AI agents as well as to people. And the

790
00:43:28,640 --> 00:43:30,080
Speaker 13: result is that you gained you have a lot of

791
00:43:30,120 --> 00:43:35,919
Speaker 13: unmanaged agents behaving like rogue code, almost you could say,

792
00:43:36,000 --> 00:43:38,879
Speaker 13: running in the background long after anyone who remembers why

793
00:43:39,000 --> 00:43:40,160
Speaker 13: they exist even.

794
00:43:41,239 --> 00:43:44,080
Speaker 3: Okay, so what do you do then? I mean, companies

795
00:43:44,080 --> 00:43:48,640
Speaker 3: are I suppose pretty good at actually managing employees. How

796
00:43:48,640 --> 00:43:49,960
Speaker 3: do they manage agentsactly?

797
00:43:51,000 --> 00:43:55,000
Speaker 13: That's exactly a question I asked Mark Shubin and he said,

798
00:43:55,160 --> 00:43:59,200
Speaker 13: the core question is how you manage AI agents in

799
00:43:59,239 --> 00:44:03,319
Speaker 13: the same way manage employees. So people have identities and

800
00:44:03,400 --> 00:44:07,520
Speaker 13: access rules and security checks and accountability, And that's exactly

801
00:44:07,560 --> 00:44:09,960
Speaker 13: what you have to have for every single agent. They

802
00:44:10,000 --> 00:44:13,000
Speaker 13: have to have rules that govern their behavior. They have

803
00:44:13,040 --> 00:44:16,120
Speaker 13: to be security checks that monitor them as well, and

804
00:44:16,160 --> 00:44:17,920
Speaker 13: they have to be accountable. There has to be some

805
00:44:18,040 --> 00:44:21,960
Speaker 13: kind of report back system. I remember last year doing

806
00:44:21,960 --> 00:44:24,839
Speaker 13: an interview with one of the vice presidents of Salesforce,

807
00:44:25,840 --> 00:44:28,560
Speaker 13: who you could almost blame for this, although they were

808
00:44:28,600 --> 00:44:32,200
Speaker 13: just ahead of a trend. And I asked him that

809
00:44:32,280 --> 00:44:35,439
Speaker 13: same question and he said that you're going to need

810
00:44:36,440 --> 00:44:39,600
Speaker 13: something like an agent in chief, and that's an agent

811
00:44:39,680 --> 00:44:42,480
Speaker 13: that will manage other agents, but they will still have

812
00:44:42,560 --> 00:44:47,880
Speaker 13: to be accountable to a human manager and accountable based

813
00:44:47,920 --> 00:44:51,480
Speaker 13: on those access rules and security checks. So in effect,

814
00:44:51,520 --> 00:44:54,040
Speaker 13: you're going to have to allow the same discipline to

815
00:44:54,160 --> 00:44:57,800
Speaker 13: software as you're going as you always have to people.

816
00:44:58,440 --> 00:45:00,319
Speaker 3: I mean, I suppose the other thing is that is

817
00:45:00,360 --> 00:45:02,719
Speaker 3: that each agent, when it is created, needs to have

818
00:45:02,760 --> 00:45:04,960
Speaker 3: a kind of this is how long it will last.

819
00:45:05,040 --> 00:45:07,480
Speaker 3: One needs to have an automatic switch off button. And

820
00:45:07,520 --> 00:45:09,400
Speaker 3: I mean, I've read so much science fiction that you

821
00:45:09,440 --> 00:45:12,319
Speaker 3: know certain AI computers the first have that too. I mean,

822
00:45:12,320 --> 00:45:14,120
Speaker 3: that would surely be the way forward. And I can

823
00:45:14,200 --> 00:45:17,080
Speaker 3: imagine actually all sorts of problems that will come then too.

824
00:45:18,160 --> 00:45:20,360
Speaker 13: You eat an l on their head. It's exactly that

825
00:45:20,440 --> 00:45:23,839
Speaker 13: it needs some kind of built in kill switch, which

826
00:45:23,840 --> 00:45:27,000
Speaker 13: will be very sad for the agents that start becoming

827
00:45:27,040 --> 00:45:30,279
Speaker 13: conscious of the existence. But the real way to do

828
00:45:30,360 --> 00:45:33,040
Speaker 13: it is to have some kind of rules built in

829
00:45:33,120 --> 00:45:38,719
Speaker 13: that says, at certain stages or over certain time periods,

830
00:45:39,120 --> 00:45:43,760
Speaker 13: the agent has to check in with an AI manager

831
00:45:43,800 --> 00:45:46,840
Speaker 13: or an agent manager, who has to determine whether it

832
00:45:46,920 --> 00:45:50,920
Speaker 13: still has a purpose or whether it should be reconditioned

833
00:45:51,000 --> 00:45:54,600
Speaker 13: or repurposed, for example. And if they don't do that,

834
00:45:54,760 --> 00:45:57,880
Speaker 13: there's huge risk of data leaks and compliance failures.

835
00:45:57,920 --> 00:46:01,240
Speaker 3: For example, I'm just imagining this piece of code asking

836
00:46:01,280 --> 00:46:05,600
Speaker 3: me why am I here? Stephen God ask the question

837
00:46:05,719 --> 00:46:08,880
Speaker 3: why am I here? Arthur Goldstuck. I love that phrase,

838
00:46:08,920 --> 00:46:11,759
Speaker 3: agent sprawl. Thanks so much. I mean there's a song there,

839
00:46:11,840 --> 00:46:15,760
Speaker 3: Agent sprawl. Arthur Goldsacks, founder of world Wide Work. Seventeen

840
00:46:15,760 --> 00:46:16,960
Speaker 3: minutes after seven.

841
00:46:17,719 --> 00:46:20,520
Speaker 2: The money showed small business focus.

842
00:46:21,400 --> 00:46:25,400
Speaker 3: I'm sure you've spent time in agy strategy session that

843
00:46:25,520 --> 00:46:27,799
Speaker 3: have watched your bosses, or your owners, or your I

844
00:46:27,800 --> 00:46:31,319
Speaker 3: don't know, fellow football players talking about what they plan

845
00:46:31,480 --> 00:46:33,600
Speaker 3: to do and the problems they need to solve, and

846
00:46:33,719 --> 00:46:36,719
Speaker 3: yet as they're doing it, you kind of know so

847
00:46:36,880 --> 00:46:39,759
Speaker 3: little of this is actually going to happen. And this

848
00:46:39,840 --> 00:46:44,040
Speaker 3: happens particularly in small business. Alon Raise is the renowned

849
00:46:44,040 --> 00:46:46,960
Speaker 3: business incubation pioneer and CEO of Ray's Corps. A lot

850
00:46:47,040 --> 00:46:48,480
Speaker 3: nice to meet you, Thanks so much for coming in

851
00:46:48,520 --> 00:46:52,040
Speaker 3: this evening, Thanks for having me. Smaller firms do this

852
00:46:52,080 --> 00:46:54,719
Speaker 3: too right. They drop a wonderful strategy, spend quite a

853
00:46:54,760 --> 00:46:56,400
Speaker 3: lot of time on it, work out what all the

854
00:46:56,440 --> 00:47:00,520
Speaker 3: problems are, and then just fail to actually do it well.

855
00:47:00,520 --> 00:47:03,040
Speaker 12: It's not just small firms, it's big firms, medium firms,

856
00:47:03,080 --> 00:47:06,600
Speaker 12: it's all firms, but it's more with small firms, so

857
00:47:06,680 --> 00:47:10,200
Speaker 12: big firms. Just if you want the stats big firms,

858
00:47:10,239 --> 00:47:12,439
Speaker 12: thirty percent of large firms only thirty.

859
00:47:12,440 --> 00:47:13,800
Speaker 3: But this is very interesting.

860
00:47:13,880 --> 00:47:17,040
Speaker 12: Only thirty percent of large firms so large corporates actually

861
00:47:17,040 --> 00:47:21,360
Speaker 12: do a strategy, write a formal strategy, and only thirty

862
00:47:21,400 --> 00:47:26,120
Speaker 12: percent of those strategies actually meet their objective within seventy

863
00:47:26,160 --> 00:47:30,080
Speaker 12: percent accuracy. So she work up the mass there. That's

864
00:47:30,200 --> 00:47:34,560
Speaker 12: nine percent of large corporates actually achieve this strategic intent.

865
00:47:35,120 --> 00:47:38,840
Speaker 12: In small businesses it's twelve percent. Around twelve percent of

866
00:47:38,880 --> 00:47:41,560
Speaker 12: them actually do some sort of back of a cigarette

867
00:47:41,560 --> 00:47:45,960
Speaker 12: box kind of strategy, and only ten percent of them succeeds.

868
00:47:45,960 --> 00:47:49,399
Speaker 12: So one com a two percent actually meet the strategic objectives.

869
00:47:49,600 --> 00:47:51,080
Speaker 3: So that's the stats out there.

870
00:47:51,520 --> 00:47:53,880
Speaker 12: And that's the big problem is that we talk about

871
00:47:54,560 --> 00:47:57,280
Speaker 12: doing all these wonderful things, but we never ever actually

872
00:47:57,320 --> 00:47:58,200
Speaker 12: land up doing them.

873
00:47:58,760 --> 00:48:01,960
Speaker 3: Where does the problem sort of lie? I mean, people

874
00:48:02,000 --> 00:48:04,600
Speaker 3: will talk about priorities, and the moment I see someone

875
00:48:04,600 --> 00:48:07,520
Speaker 3: with more than sort of two or three priorities, my

876
00:48:07,600 --> 00:48:09,960
Speaker 3: eyes start to roll back into my head a little bit.

877
00:48:10,640 --> 00:48:12,839
Speaker 3: Is that part of the issue too many priorities?

878
00:48:13,520 --> 00:48:16,640
Speaker 12: Well, first of all, the problem, Steven, is that there

879
00:48:16,719 --> 00:48:20,359
Speaker 12: is very little understanding of what strategy is. And if

880
00:48:20,400 --> 00:48:23,000
Speaker 12: you'll allow me to just give you the little framework,

881
00:48:23,560 --> 00:48:28,520
Speaker 12: So strategy is you know, when you say what is

882
00:48:28,520 --> 00:48:31,040
Speaker 12: your strategy. I want to be in five African countries

883
00:48:31,040 --> 00:48:34,320
Speaker 12: by the end of the decade. That's not strategy. That's vision.

884
00:48:34,360 --> 00:48:36,960
Speaker 12: That's where I want to go. Strategy is how I'm

885
00:48:37,000 --> 00:48:39,920
Speaker 12: going to get there. So the framework is your current

886
00:48:39,920 --> 00:48:43,080
Speaker 12: situation where I am right now, where I want to be,

887
00:48:43,160 --> 00:48:46,320
Speaker 12: which is vision, and the strategy is how I get there.

888
00:48:46,480 --> 00:48:51,120
Speaker 12: But most organizations that I deal with, small, medium, and

889
00:48:51,239 --> 00:48:57,040
Speaker 12: even large today do not differentiate between operations and strategy.

890
00:48:57,880 --> 00:49:02,480
Speaker 12: So if I can give you a simple metaphor operations

891
00:49:02,560 --> 00:49:05,040
Speaker 12: or a model to think about it, how you differentiate

892
00:49:05,480 --> 00:49:08,440
Speaker 12: operations is more of the same. So if there's anything

893
00:49:08,480 --> 00:49:12,000
Speaker 12: we're you doing more of the same, it's operations. It's

894
00:49:12,040 --> 00:49:14,440
Speaker 12: at somebody's job to do more of that, sell more

895
00:49:14,440 --> 00:49:17,000
Speaker 12: of those, make more of those things. Do that, And

896
00:49:17,080 --> 00:49:25,200
Speaker 12: the language of operations is targets. With strategy there is

897
00:49:25,560 --> 00:49:29,360
Speaker 12: about the creation of new. Something new has to happen.

898
00:49:29,680 --> 00:49:31,800
Speaker 12: So if I can give that to you as an example,

899
00:49:32,120 --> 00:49:35,319
Speaker 12: if you there wasn't a website and then I have

900
00:49:35,360 --> 00:49:38,840
Speaker 12: to create a website to get me closer to my vision,

901
00:49:39,480 --> 00:49:44,520
Speaker 12: then that's strategy. That is strategic growth strategy. But once

902
00:49:44,560 --> 00:49:47,440
Speaker 12: I've made the website and somebody has to manage that website,

903
00:49:47,480 --> 00:49:50,120
Speaker 12: it's somebody's job and I have to get a certain

904
00:49:50,160 --> 00:49:52,640
Speaker 12: amount of visits or hits or followers or whatever the

905
00:49:52,680 --> 00:49:57,680
Speaker 12: case may be. That moves into operations, and most entrepreneurs

906
00:49:57,719 --> 00:50:00,560
Speaker 12: don't understand how to differentiate between in the two.

907
00:50:01,920 --> 00:50:04,400
Speaker 3: Do you think it's because most entrepreneurs are sort of

908
00:50:04,400 --> 00:50:09,359
Speaker 3: often stuck in operations because when they start is off

909
00:50:09,360 --> 00:50:13,480
Speaker 3: in a service, they provide themselves personally, and that sort

910
00:50:13,480 --> 00:50:14,400
Speaker 3: of keeps them stuck.

911
00:50:15,320 --> 00:50:18,000
Speaker 12: You've hit the nail on the head. When I train entrepreneurs,

912
00:50:18,000 --> 00:50:20,600
Speaker 12: there's one slide I've got, which is, you know, I

913
00:50:20,719 --> 00:50:23,279
Speaker 12: just want you to all understand you're an addict. You're

914
00:50:23,480 --> 00:50:26,719
Speaker 12: addicted to operations, and they're addicted to operations because it's

915
00:50:26,760 --> 00:50:29,880
Speaker 12: the place of comfort, their confidence, they know how to

916
00:50:29,920 --> 00:50:32,439
Speaker 12: do that thing, Whereas when it's the creation of new

917
00:50:32,880 --> 00:50:36,280
Speaker 12: it's a place that is unknown, and operations always seems

918
00:50:36,360 --> 00:50:39,400
Speaker 12: far more urgent, because what do you want me to do?

919
00:50:39,400 --> 00:50:41,400
Speaker 12: Do you want me to deal with that client? That's screaming,

920
00:50:41,640 --> 00:50:43,360
Speaker 12: or do you want me to go and build some stuff?

921
00:50:43,640 --> 00:50:46,120
Speaker 12: Like what do you want me to do? So operations

922
00:50:46,200 --> 00:50:50,080
Speaker 12: is always the winner when it comes to being forced

923
00:50:50,120 --> 00:50:52,839
Speaker 12: into a decision which way to go. What I try

924
00:50:52,880 --> 00:50:55,520
Speaker 12: and get small businesses to understand is that if they

925
00:50:55,520 --> 00:50:59,000
Speaker 12: want to move to the next level, they've got to

926
00:50:59,080 --> 00:51:04,400
Speaker 12: bring equality between the operations, which in another way I

927
00:51:04,480 --> 00:51:07,160
Speaker 12: call the queen and the strategy, which is the king.

928
00:51:07,239 --> 00:51:09,880
Speaker 12: They have to have an equal space at the table.

929
00:51:10,280 --> 00:51:13,440
Speaker 12: Otherwise the business doesn't grow because you're not creating anything

930
00:51:13,520 --> 00:51:16,000
Speaker 12: new to support growth and take you to vision.

931
00:51:17,160 --> 00:51:20,680
Speaker 3: It's so interesting that sort of difference. Is there a

932
00:51:20,719 --> 00:51:25,120
Speaker 3: problem with resource allocation? In other words, there's a strategy,

933
00:51:25,320 --> 00:51:28,000
Speaker 3: so this is how we're going to get into five

934
00:51:28,040 --> 00:51:31,399
Speaker 3: African countries over the next few years, but you need

935
00:51:31,440 --> 00:51:34,600
Speaker 3: to invest to do that, and small companies as we

936
00:51:34,640 --> 00:51:36,680
Speaker 3: always as we know, often don't have the capital.

937
00:51:37,680 --> 00:51:40,440
Speaker 12: Well, if you do the strategy correctly, it's not that

938
00:51:40,520 --> 00:51:43,720
Speaker 12: you wouldn't you wouldn't set You would say, there's the vision,

939
00:51:43,800 --> 00:51:45,839
Speaker 12: this is what I want to do in your one, two, three,

940
00:51:45,880 --> 00:51:49,360
Speaker 12: and four, and you would plan according to those resources.

941
00:51:49,360 --> 00:51:52,200
Speaker 12: And if you don't have those current resources. The question

942
00:51:52,239 --> 00:51:54,640
Speaker 12: would be how do I get those resources? What I

943
00:51:54,719 --> 00:51:57,360
Speaker 12: need to do to build to create in order to

944
00:51:57,400 --> 00:52:00,600
Speaker 12: do that. So if you if you think about the

945
00:52:00,640 --> 00:52:03,040
Speaker 12: creation of strategy, it's actually quite logical.

946
00:52:03,120 --> 00:52:05,319
Speaker 3: It's just it's a whole bunch of.

947
00:52:05,239 --> 00:52:07,400
Speaker 12: If then statements that you need to create, and then

948
00:52:07,440 --> 00:52:09,840
Speaker 12: it's a whole bunch of choices that you have to

949
00:52:09,920 --> 00:52:12,919
Speaker 12: make on the way. And that has to do with

950
00:52:13,280 --> 00:52:15,920
Speaker 12: a your resources, but far more importantly of around your

951
00:52:15,920 --> 00:52:19,200
Speaker 12: core competencies. And you see a whole bunch of businesses

952
00:52:19,680 --> 00:52:24,680
Speaker 12: chasing things that do not resonate or do not include

953
00:52:25,080 --> 00:52:28,880
Speaker 12: their core competencies. So they basically starting these s curves,

954
00:52:28,960 --> 00:52:32,160
Speaker 12: is these growth curves again or learning curves again? On

955
00:52:32,880 --> 00:52:35,480
Speaker 12: how to do those things as opposed to using what

956
00:52:35,520 --> 00:52:39,319
Speaker 12: they're good at to create the competitive edge, which is

957
00:52:39,440 --> 00:52:42,200
Speaker 12: ultimately what you're trying to achieve with strategy.

958
00:52:44,000 --> 00:52:47,280
Speaker 3: Are they obvious ways to you know, have the strategy

959
00:52:47,320 --> 00:52:49,880
Speaker 3: session come out, you know, have the strategy nicely written

960
00:52:49,920 --> 00:52:53,640
Speaker 3: down and I don't know, beautiful letters, and then sort

961
00:52:53,640 --> 00:52:56,400
Speaker 3: of actually implements it. I mean the obvious sort of fixes.

962
00:52:56,480 --> 00:52:58,640
Speaker 3: And I suppose the one is to say to the

963
00:52:58,800 --> 00:53:01,759
Speaker 3: the entrepreneur. You aren't allowed to spend all your time

964
00:53:01,760 --> 00:53:03,840
Speaker 3: on operations. You might have to drag them kicking and

965
00:53:03,880 --> 00:53:06,480
Speaker 3: screaming from that, but you actually have to be quite

966
00:53:06,520 --> 00:53:08,040
Speaker 3: hard about it. Yeah.

967
00:53:08,080 --> 00:53:11,239
Speaker 12: So when I invest in businesses, and when the first

968
00:53:11,239 --> 00:53:14,000
Speaker 12: thing I do with a CEO is that I take

969
00:53:14,040 --> 00:53:16,920
Speaker 12: them through a process called LFF or letter from the Future.

970
00:53:17,360 --> 00:53:19,920
Speaker 12: So I'll take them into a room for a day

971
00:53:19,920 --> 00:53:22,600
Speaker 12: and I say, what do you want, but let's write

972
00:53:22,600 --> 00:53:25,000
Speaker 12: that five years Hence, in other words, you five years

973
00:53:25,000 --> 00:53:28,359
Speaker 12: into the future and now write the story of how

974
00:53:28,400 --> 00:53:32,560
Speaker 12: your business has grown over the past five years, with

975
00:53:32,600 --> 00:53:36,520
Speaker 12: all the obstacles, all the friction that is in place.

976
00:53:37,080 --> 00:53:40,359
Speaker 12: And then you ascertain which are queen things, which are

977
00:53:40,400 --> 00:53:43,839
Speaker 12: operational things, and attach targets to that, and which are

978
00:53:43,920 --> 00:53:47,840
Speaker 12: king things. We attach strategic objectives to those, which is,

979
00:53:47,880 --> 00:53:50,120
Speaker 12: you have to build these things. And then the next

980
00:53:50,160 --> 00:53:53,400
Speaker 12: point is to assign those two people, allocate those to

981
00:53:53,480 --> 00:53:56,560
Speaker 12: people in your organization. And the holl's where it all

982
00:53:56,560 --> 00:53:59,520
Speaker 12: falls down. People do not then make that part of

983
00:53:59,600 --> 00:54:02,560
Speaker 12: performing banashment, because as soon as you attached that to

984
00:54:02,600 --> 00:54:05,920
Speaker 12: performance mansion, you said to your team you have to

985
00:54:06,040 --> 00:54:09,880
Speaker 12: execute on these targets. But more importantly on these strategic

986
00:54:09,920 --> 00:54:12,840
Speaker 12: objectives to build things, then it doesn't work.

987
00:54:13,719 --> 00:54:15,799
Speaker 3: Thanks so much for coming in, Elan lots to think about,

988
00:54:15,800 --> 00:54:19,520
Speaker 3: really appreciated. Elon Raise is the renowned business incubation pioneer

989
00:54:19,600 --> 00:54:21,040
Speaker 3: and CEO of Ray's Corps.

990
00:54:21,400 --> 00:54:24,000
Speaker 2: The Money Show Investment School.

991
00:54:24,040 --> 00:54:27,640
Speaker 3: Twenty four minutes. Now to on Investment School tonight. The

992
00:54:27,760 --> 00:54:31,040
Speaker 3: technical term for this discussion is should you be diversifying

993
00:54:31,239 --> 00:54:33,520
Speaker 3: away from the US dollar? But I'm going to call

994
00:54:33,560 --> 00:54:35,440
Speaker 3: it should you ditch the dollar? You can see, of

995
00:54:35,520 --> 00:54:38,359
Speaker 3: course that the dollar has to depreciated quite dramatically over

996
00:54:38,400 --> 00:54:40,879
Speaker 3: the last few months, and in particular you can see

997
00:54:40,920 --> 00:54:43,439
Speaker 3: that through the strength of the rand. You can also

998
00:54:43,560 --> 00:54:46,760
Speaker 3: see how many people are selling dollars and buying gold.

999
00:54:47,560 --> 00:54:50,400
Speaker 3: We'll discuss why that is happening, how far it could go,

1000
00:54:50,960 --> 00:54:53,360
Speaker 3: and what you should do tonight. Patrick Matidi is the

1001
00:54:53,400 --> 00:54:56,800
Speaker 3: head of multi asset Strategies at Aliwani Capital Partners and

1002
00:54:57,000 --> 00:54:59,759
Speaker 3: Gary Boysen as a director at where Anne Swiss Gens.

1003
00:54:59,800 --> 00:55:02,520
Speaker 3: Thanks so much for your time tonight. Patrick. Let me

1004
00:55:02,560 --> 00:55:05,799
Speaker 3: start with you. I suppose the first question is why

1005
00:55:05,880 --> 00:55:08,719
Speaker 3: are so many people moving away from the dollar, And

1006
00:55:09,080 --> 00:55:10,919
Speaker 3: part of the answer has got to be the fact

1007
00:55:10,960 --> 00:55:13,279
Speaker 3: that the president Donald Trump says he wants a week

1008
00:55:13,320 --> 00:55:13,680
Speaker 3: of dollar.

1009
00:55:16,160 --> 00:55:18,640
Speaker 14: Yeah, the mix stident and you give me and Gerry

1010
00:55:18,760 --> 00:55:21,920
Speaker 14: thanks for having me. Look, I think, you know, it's

1011
00:55:22,040 --> 00:55:26,640
Speaker 14: a topical question, and I think that two factors need

1012
00:55:26,719 --> 00:55:30,480
Speaker 14: to consider before we answer that. One is, you know,

1013
00:55:30,680 --> 00:55:34,160
Speaker 14: is this cyclical as it shelp us, you know, as

1014
00:55:34,239 --> 00:55:37,440
Speaker 14: in one the US president you know, sort of a

1015
00:55:37,520 --> 00:55:40,480
Speaker 14: stratus office term and then things go back to normality,

1016
00:55:40,680 --> 00:55:43,680
Speaker 14: you know, whatever that looks like, or is this a.

1017
00:55:43,880 --> 00:55:47,719
Speaker 15: Reset in terms of you know, it's mouth structural as

1018
00:55:47,880 --> 00:55:50,600
Speaker 15: in indeed, you know, the double economy is moving our

1019
00:55:50,640 --> 00:55:54,480
Speaker 15: way from from dollar based assets, be both from a

1020
00:55:54,520 --> 00:55:56,719
Speaker 15: trade point of view and also from an investments point

1021
00:55:56,719 --> 00:55:59,080
Speaker 15: of view, right, And we don't have a firm view

1022
00:55:59,239 --> 00:56:02,400
Speaker 15: on that, but what is clear though is that you know,

1023
00:56:02,480 --> 00:56:05,360
Speaker 15: the shift away from the dollar is based on what

1024
00:56:05,640 --> 00:56:08,320
Speaker 15: one can see as you know, sort of a transiend

1025
00:56:08,400 --> 00:56:12,200
Speaker 15: factors to do with the uncertainty that has been brought

1026
00:56:12,239 --> 00:56:15,719
Speaker 15: about by the Trump presidency, whether on the trade front

1027
00:56:15,800 --> 00:56:18,600
Speaker 15: in terms of the tariffs, but also the geopolitics in

1028
00:56:18,760 --> 00:56:21,320
Speaker 15: terms of uh, you know what what that can do.

1029
00:56:21,840 --> 00:56:23,920
Speaker 15: And as well know, you know, the one thing that

1030
00:56:24,120 --> 00:56:27,480
Speaker 15: capital likes the most is some element of certainty. And

1031
00:56:27,560 --> 00:56:30,280
Speaker 15: in an envelopment where there is less and less certainty,

1032
00:56:30,719 --> 00:56:33,359
Speaker 15: you do find that the flow of capital going into

1033
00:56:33,400 --> 00:56:36,120
Speaker 15: other markets where it can find a bit more comfort

1034
00:56:36,320 --> 00:56:37,360
Speaker 15: and a bit more certainty.

1035
00:56:38,239 --> 00:56:41,479
Speaker 3: Okay, So, Gary, isn't the point of the US dollar

1036
00:56:41,560 --> 00:56:45,439
Speaker 3: that it didn't have cyclical downturns? Is that the whole

1037
00:56:45,480 --> 00:56:48,040
Speaker 3: point of it was that it was stable.

1038
00:56:48,560 --> 00:56:51,279
Speaker 16: Certainly for many. I mean, it's the reserve currency of

1039
00:56:51,640 --> 00:56:54,239
Speaker 16: the world and has been, as Patrick saying, you know,

1040
00:56:54,719 --> 00:56:56,520
Speaker 16: is this a time where this is now really being

1041
00:56:56,560 --> 00:56:59,080
Speaker 16: called into question? And is there going to be a

1042
00:56:59,200 --> 00:57:01,880
Speaker 16: true d dollaration? Are we going to see you settlement

1043
00:57:01,960 --> 00:57:06,279
Speaker 16: currencies like bricks the unit being created? You know, are

1044
00:57:06,600 --> 00:57:10,080
Speaker 16: the other nations of the world starting to see, you know,

1045
00:57:10,160 --> 00:57:12,680
Speaker 16: the financial systems that the US dollar is based on,

1046
00:57:13,160 --> 00:57:16,720
Speaker 16: you know, being essentially manipulated and used to control and

1047
00:57:17,040 --> 00:57:20,000
Speaker 16: extend the USHM. And we saw obviously Mark Carney speech

1048
00:57:20,040 --> 00:57:23,120
Speaker 16: at the WEF talking about a rupture in the global

1049
00:57:23,240 --> 00:57:25,400
Speaker 16: order and you know how you've got to take your

1050
00:57:25,720 --> 00:57:28,040
Speaker 16: sign out of the shop window if anyone's watched it,

1051
00:57:28,160 --> 00:57:32,000
Speaker 16: and I mean it was powerfully reminding people that, you know,

1052
00:57:32,080 --> 00:57:34,320
Speaker 16: even even the neighbor of the US, Canada, you know,

1053
00:57:34,360 --> 00:57:36,800
Speaker 16: which has been you know, the brunt of many kind

1054
00:57:36,800 --> 00:57:41,680
Speaker 16: of trump vicious rhetoric attacks, you know, is now sick

1055
00:57:41,760 --> 00:57:43,840
Speaker 16: of this and looking at all other alternatives as well.

1056
00:57:43,920 --> 00:57:46,560
Speaker 16: And that's I mean, that does signal that this could

1057
00:57:46,680 --> 00:57:50,160
Speaker 16: potentially be a true regime change for the US dollar.

1058
00:57:51,480 --> 00:57:54,080
Speaker 16: You know, we can see it just in trading patterns certainly,

1059
00:57:54,200 --> 00:57:55,760
Speaker 16: Like I mean, if you look at it, you know,

1060
00:57:56,120 --> 00:57:59,080
Speaker 16: typically you know, along with the Frank then gold tour

1061
00:57:59,080 --> 00:58:01,360
Speaker 16: an extent as well, the US dollar was a safe

1062
00:58:01,400 --> 00:58:05,040
Speaker 16: haven asset, you know, when you had you know, geopolitical turmoil,

1063
00:58:05,080 --> 00:58:07,640
Speaker 16: that the dollar was strengthened. Now we've got the opposite.

1064
00:58:07,640 --> 00:58:09,800
Speaker 16: It trades like an emerging market currency where you know,

1065
00:58:10,080 --> 00:58:12,840
Speaker 16: generally it's the US now causing the problem. So so

1066
00:58:13,120 --> 00:58:16,240
Speaker 16: you get the dollars sold off when you get you know,

1067
00:58:16,440 --> 00:58:22,200
Speaker 16: any any new geopolitical announcements. So definitely, it's it's I mean,

1068
00:58:22,240 --> 00:58:24,480
Speaker 16: it's it's important to understand, but I think maybe just

1069
00:58:24,520 --> 00:58:26,440
Speaker 16: to put it in the context of historic moves in

1070
00:58:26,480 --> 00:58:28,880
Speaker 16: the dollar as well, if you look at the dollar index,

1071
00:58:30,640 --> 00:58:32,480
Speaker 16: yes it has you know, if you take it back,

1072
00:58:32,560 --> 00:58:35,320
Speaker 16: you know, measure it back to kind of the nineteen sixties. Yes,

1073
00:58:35,360 --> 00:58:37,160
Speaker 16: it can fluctuate all the way up to one hundred

1074
00:58:37,160 --> 00:58:39,640
Speaker 16: and fifty down below eighty. You know, it can be

1075
00:58:39,840 --> 00:58:43,360
Speaker 16: very volatile. The dollar can change value significantly, but in

1076
00:58:43,880 --> 00:58:45,800
Speaker 16: kind of a much shorter time period, let's say the

1077
00:58:45,840 --> 00:58:48,080
Speaker 16: last twenty years. You kind of feel that, you know,

1078
00:58:48,280 --> 00:58:51,240
Speaker 16: an expensive dollars at at you know, very strong dollars

1079
00:58:51,240 --> 00:58:54,200
Speaker 16: at one hundred and ten, very week dollars at about ninety,

1080
00:58:54,320 --> 00:58:56,480
Speaker 16: and that's kind of where you pick up the support

1081
00:58:56,520 --> 00:58:59,840
Speaker 16: and resistance. And as you know, the Trump administration came

1082
00:58:59,880 --> 00:59:01,920
Speaker 16: in to the White House that you know could towards

1083
00:59:01,960 --> 00:59:03,640
Speaker 16: the beginning of last year, you know, there was this

1084
00:59:03,920 --> 00:59:08,320
Speaker 16: huge exuberance around deregulation and how strong the US economy

1085
00:59:08,320 --> 00:59:10,240
Speaker 16: would be, and that that is actually playing out. I mean,

1086
00:59:10,240 --> 00:59:13,520
Speaker 16: we are seeing you know, some incredible growth prints out

1087
00:59:13,560 --> 00:59:15,760
Speaker 16: of the US at the moment. So I don't know

1088
00:59:15,840 --> 00:59:18,200
Speaker 16: if it's time to just ditch the dollar, as the

1089
00:59:18,320 --> 00:59:20,920
Speaker 16: title of the show says. But you know, we're currently

1090
00:59:21,240 --> 00:59:23,800
Speaker 16: ninety six ninety seven on the dollar index, so you know,

1091
00:59:23,880 --> 00:59:26,240
Speaker 16: we're on the weaker side of kind of the average

1092
00:59:26,280 --> 00:59:29,120
Speaker 16: of where we've been, but we're still well within rational

1093
00:59:29,200 --> 00:59:31,240
Speaker 16: balance that I think it's just the speed at which

1094
00:59:31,360 --> 00:59:33,240
Speaker 16: everyone is feeling the move. And certainly that's I think

1095
00:59:33,280 --> 00:59:36,000
Speaker 16: why we're having so many meetings and so many people

1096
00:59:36,040 --> 00:59:38,400
Speaker 16: approaching us and kind of asking, you know, should we

1097
00:59:38,520 --> 00:59:41,640
Speaker 16: be diversifying into frank should we be disversifying into pounds

1098
00:59:41,720 --> 00:59:44,480
Speaker 16: or euros, or or where should we be putting money

1099
00:59:44,520 --> 00:59:46,360
Speaker 16: at the stage, it.

1100
00:59:46,400 --> 00:59:48,240
Speaker 3: Also, as supposed depends what you're going to do with

1101
00:59:48,320 --> 00:59:51,600
Speaker 3: that money. And Patrick, I mean, you can, for example,

1102
00:59:52,520 --> 00:59:54,720
Speaker 3: just put your money into dollars and keep it in dollars,

1103
00:59:55,360 --> 00:59:59,840
Speaker 3: or you could be using dollars and investing those dollars

1104
01:00:00,080 --> 01:00:03,280
Speaker 3: in other emerging markets, or you could be taking those

1105
01:00:03,320 --> 01:00:06,400
Speaker 3: dollars in investing in the US on you know, in

1106
01:00:06,400 --> 01:00:10,160
Speaker 3: a video or something. It does, I suppose matter what

1107
01:00:10,240 --> 01:00:11,800
Speaker 3: you're actually going to do with the dollars that you

1108
01:00:11,960 --> 01:00:13,960
Speaker 3: have and what kind of use you're putting them to.

1109
01:00:16,960 --> 01:00:18,720
Speaker 14: Yeah, still, and I think I think it does matter.

1110
01:00:19,320 --> 01:00:23,120
Speaker 14: I think the two factors to consider, you know, one

1111
01:00:23,360 --> 01:00:26,080
Speaker 14: is you know the currency diversification. You know the weather

1112
01:00:26,120 --> 01:00:28,640
Speaker 14: it's going to the euros or the yen or any

1113
01:00:28,680 --> 01:00:32,160
Speaker 14: other but also you know the asset class that you

1114
01:00:32,280 --> 01:00:35,000
Speaker 14: then get into. You know, when you think of davisifying

1115
01:00:35,560 --> 01:00:37,920
Speaker 14: and I think the important part there is you know

1116
01:00:38,000 --> 01:00:41,760
Speaker 14: what we call you know, correlations. Right, so you need

1117
01:00:41,800 --> 01:00:44,240
Speaker 14: to be careful that you know, as and when you

1118
01:00:44,280 --> 01:00:47,000
Speaker 14: think of DAVI is flying away from my currency, you

1119
01:00:47,080 --> 01:00:50,000
Speaker 14: don't end up with different assets you know, in your

1120
01:00:50,040 --> 01:00:53,640
Speaker 14: in your basket that actually behaves similarly. Right says that

1121
01:00:53,800 --> 01:00:56,840
Speaker 14: if you get one theme across you know, incorrect, you

1122
01:00:56,960 --> 01:01:00,320
Speaker 14: get hit multiple times. So so diversification on it, oh,

1123
01:01:00,840 --> 01:01:02,600
Speaker 14: you know, it's as well and good, but that the

1124
01:01:02,680 --> 01:01:05,720
Speaker 14: real trick comes in when then look at correlations. But

1125
01:01:05,800 --> 01:01:08,680
Speaker 14: it's the behavior of whatever the assets you have, you

1126
01:01:08,760 --> 01:01:10,960
Speaker 14: know in a basket, you know, towards each other. You

1127
01:01:11,040 --> 01:01:13,440
Speaker 14: want to make sure that those behave in a manner

1128
01:01:13,560 --> 01:01:17,200
Speaker 14: that is not highly correlated, such that if one or

1129
01:01:17,280 --> 01:01:19,280
Speaker 14: two don't work out, at least two got three or

1130
01:01:19,280 --> 01:01:21,360
Speaker 14: four that can still pull you through and you end

1131
01:01:21,440 --> 01:01:23,440
Speaker 14: up you know, with the portfolio that still you know,

1132
01:01:23,600 --> 01:01:27,560
Speaker 14: generate dissent returns irrespective of whatever currents you're investing in.

1133
01:01:28,040 --> 01:01:31,040
Speaker 14: So so yes, you know there has been moves to

1134
01:01:31,200 --> 01:01:33,920
Speaker 14: that fire way from the dollar. But again you know

1135
01:01:34,040 --> 01:01:37,160
Speaker 14: the trick thing is, you know, a lot of the

1136
01:01:37,280 --> 01:01:40,160
Speaker 14: assets one way or the other has got some correlation

1137
01:01:40,280 --> 01:01:43,000
Speaker 14: with the dollar, right, just because the US as an

1138
01:01:43,000 --> 01:01:44,919
Speaker 14: economy is the largest in the world, so you really

1139
01:01:45,040 --> 01:01:47,200
Speaker 14: can run away from it not that far. So you

1140
01:01:47,320 --> 01:01:49,560
Speaker 14: therefore need to pay a little bit more attention in

1141
01:01:49,720 --> 01:01:52,680
Speaker 14: terms of that correlation factor. Has Anne trying to put

1142
01:01:52,680 --> 01:01:55,320
Speaker 14: together your portfolio, Yeah.

1143
01:01:55,240 --> 01:01:56,840
Speaker 3: I think I think that's you. You mean, gett your

1144
01:01:57,240 --> 01:01:59,520
Speaker 3: sort of view on that. I mean, the problem is

1145
01:01:59,600 --> 01:02:02,040
Speaker 3: is that it's it's almost impossible to think of a

1146
01:02:02,120 --> 01:02:05,280
Speaker 3: world without the dollar, and not just without the dollar,

1147
01:02:05,400 --> 01:02:07,400
Speaker 3: but without the dollar being as strong as it's been

1148
01:02:08,280 --> 01:02:09,000
Speaker 3: or maybe as.

1149
01:02:08,880 --> 01:02:11,360
Speaker 16: Important as it's been. So, I mean, you know, to

1150
01:02:11,440 --> 01:02:15,120
Speaker 16: Patrick's point around the diversification and you know the correlations

1151
01:02:15,160 --> 01:02:18,000
Speaker 16: and that, I think it's important to make a distinction between,

1152
01:02:18,680 --> 01:02:21,640
Speaker 16: you know, the translational effect of the dollar and what

1153
01:02:21,800 --> 01:02:24,240
Speaker 16: you're invested in. So if you go and open a

1154
01:02:24,520 --> 01:02:27,160
Speaker 16: you know, offshore bank account out of man Guernsey wherever

1155
01:02:27,200 --> 01:02:28,640
Speaker 16: it is, and you stick a whole bunch of dollars

1156
01:02:28,680 --> 01:02:31,840
Speaker 16: in there, you're probably feeling pretty bruised after the last

1157
01:02:31,920 --> 01:02:34,360
Speaker 16: year thirteen percent fall. You're looking at the rand you're going,

1158
01:02:34,480 --> 01:02:36,440
Speaker 16: what did I do? I thought I was making the

1159
01:02:36,520 --> 01:02:40,880
Speaker 16: prudent move to diversify my assets overseas. The problem is

1160
01:02:41,080 --> 01:02:44,200
Speaker 16: cash is just about always a poor place to invest

1161
01:02:44,680 --> 01:02:47,560
Speaker 16: over the longer term. And while the dollar traditionally has

1162
01:02:47,640 --> 01:02:51,440
Speaker 16: protected South Africans in that the South African currency was weakening,

1163
01:02:51,640 --> 01:02:53,960
Speaker 16: I think around six percent a year is kind of

1164
01:02:54,000 --> 01:02:56,000
Speaker 16: the average, depending on where you take your starting point.

1165
01:02:56,360 --> 01:02:57,600
Speaker 16: You know, they look at the interest rate in the

1166
01:02:57,640 --> 01:02:59,400
Speaker 16: South African bank on Rand and they go, well, I'm

1167
01:02:59,440 --> 01:03:02,160
Speaker 16: getting six seven percent there, but I can get almost

1168
01:03:02,240 --> 01:03:05,440
Speaker 16: nothing on dollars. But don't worry, I'll appreciate by you know,

1169
01:03:05,480 --> 01:03:07,960
Speaker 16: I'll get this appreciation and I don't need to make

1170
01:03:08,000 --> 01:03:10,320
Speaker 16: an investment. And what's happened of the last year, that

1171
01:03:10,440 --> 01:03:13,960
Speaker 16: thirteen percent pullback has kind of made everyone reassess that

1172
01:03:14,000 --> 01:03:16,280
Speaker 16: assumption and going, wait a minute, Like I could have

1173
01:03:16,360 --> 01:03:18,600
Speaker 16: had six seven percent interest in rand and I could

1174
01:03:18,600 --> 01:03:20,640
Speaker 16: have had a thirteen percent lift in the value of

1175
01:03:20,720 --> 01:03:21,280
Speaker 16: my currency.

1176
01:03:21,640 --> 01:03:22,439
Speaker 3: This is really bad.

1177
01:03:22,520 --> 01:03:23,080
Speaker 16: What have I done?

1178
01:03:23,160 --> 01:03:24,720
Speaker 3: And I think that the issue is.

1179
01:03:24,760 --> 01:03:28,280
Speaker 16: That when you cash is a bad investment where it's dollars, rands, euros,

1180
01:03:28,320 --> 01:03:31,120
Speaker 16: Franks sitting on cash long term it's not a growth asset.

1181
01:03:31,160 --> 01:03:34,240
Speaker 16: These are fiat currencies that will devalue over time, so

1182
01:03:34,680 --> 01:03:37,200
Speaker 16: you need to deploy that capital. And as Patrick saying,

1183
01:03:37,240 --> 01:03:39,120
Speaker 16: into watch asset class does that go. But if you're

1184
01:03:39,160 --> 01:03:43,480
Speaker 16: buying stocks, if you're buying businesses that have operational assets,

1185
01:03:43,840 --> 01:03:46,640
Speaker 16: you know, whether the translational effect of a dollar weakening,

1186
01:03:46,960 --> 01:03:50,280
Speaker 16: that doesn't matter if you're buying a US dollar asset

1187
01:03:50,360 --> 01:03:52,280
Speaker 16: that's sitting in the like when I say an asset

1188
01:03:52,320 --> 01:03:55,720
Speaker 16: a US dollar security, but that security is a multinational company.

1189
01:03:55,760 --> 01:03:58,760
Speaker 16: I'm not going to say Microsoft because it's ten percent today.

1190
01:03:58,840 --> 01:04:01,720
Speaker 16: But if you buy a company that has a global

1191
01:04:01,840 --> 01:04:04,439
Speaker 16: reach and the dollar starts a week and that stock

1192
01:04:04,480 --> 01:04:08,280
Speaker 16: price naturally lifts. So your investors that might have dollar

1193
01:04:08,320 --> 01:04:10,880
Speaker 16: base portfolio and when I say dollar based, the translational

1194
01:04:10,880 --> 01:04:13,840
Speaker 16: effect that the reporting currency as dollars, but they're invested

1195
01:04:13,840 --> 01:04:16,760
Speaker 16: in high quality assets, have actually had a fantastic ride.

1196
01:04:17,280 --> 01:04:20,160
Speaker 16: And it's really it's the importance of having the funds invested.

1197
01:04:20,240 --> 01:04:23,280
Speaker 16: And I mean, I suppose with that translational effect, and

1198
01:04:23,600 --> 01:04:26,040
Speaker 16: we'll probably talk a little bit about citis, you can

1199
01:04:26,160 --> 01:04:28,440
Speaker 16: get the same exposure through other currencies. You can buy

1200
01:04:28,440 --> 01:04:31,160
Speaker 16: an S and P five hundred tracker reference the US

1201
01:04:31,240 --> 01:04:32,840
Speaker 16: dollars you can buy an S and P five hundred

1202
01:04:32,880 --> 01:04:36,040
Speaker 16: tracker referenced than Swiss francs. You're getting the exact same thing.

1203
01:04:36,120 --> 01:04:37,760
Speaker 16: It's just how it's being reported to you at the.

1204
01:04:37,800 --> 01:04:42,800
Speaker 3: End of the day. Okay. So, so I suppose this

1205
01:04:42,960 --> 01:04:45,720
Speaker 3: then gets to where you go when all of this

1206
01:04:45,880 --> 01:04:49,320
Speaker 3: volatility is happening, and Patrick, what it must do is

1207
01:04:49,440 --> 01:04:53,280
Speaker 3: make your investment decisions a little bit more complex than

1208
01:04:53,320 --> 01:04:56,160
Speaker 3: their previously were. Because even if you're just going to

1209
01:04:56,240 --> 01:04:58,360
Speaker 3: take something that we can all accept as doing very

1210
01:04:58,440 --> 01:05:00,200
Speaker 3: well at the moment, so take your video here in

1211
01:05:00,240 --> 01:05:03,320
Speaker 3: the US stock market, you suddenly have to do quite

1212
01:05:03,320 --> 01:05:05,480
Speaker 3: a lot more mass to work out what it's actually

1213
01:05:05,600 --> 01:05:08,720
Speaker 3: worth in rand terms for you. And just that alone

1214
01:05:08,880 --> 01:05:12,040
Speaker 3: might make some people cautious of investing in the US

1215
01:05:12,040 --> 01:05:14,919
Speaker 3: stock market, even though by almost every measure it would

1216
01:05:14,920 --> 01:05:16,080
Speaker 3: still be the place to invest.

1217
01:05:18,600 --> 01:05:19,880
Speaker 14: Yeah, absolutely, Stephen.

1218
01:05:19,920 --> 01:05:22,480
Speaker 15: I mean that we've seen this over the last a

1219
01:05:22,520 --> 01:05:28,080
Speaker 15: couple of years now, where previously, you know, just conventional

1220
01:05:28,160 --> 01:05:31,840
Speaker 15: wisdom was that the random always to appreciate. So so

1221
01:05:31,960 --> 01:05:33,919
Speaker 15: don't worry, you know, in terms of trying to figure

1222
01:05:33,920 --> 01:05:35,920
Speaker 15: out where it's going to land directionally is going to

1223
01:05:36,000 --> 01:05:38,800
Speaker 15: appreciate and whatever that you appreciation is and that will

1224
01:05:38,840 --> 01:05:40,720
Speaker 15: be a bit of pay and some came on top.

1225
01:05:40,840 --> 01:05:42,160
Speaker 15: You know, if you take you mone off shore and

1226
01:05:42,320 --> 01:05:44,560
Speaker 15: invest it in that the US or whatever.

1227
01:05:45,320 --> 01:05:47,560
Speaker 14: Clearly that has changed in the last year or so

1228
01:05:48,080 --> 01:05:50,160
Speaker 14: where we have seen the rent actually you know, come

1229
01:05:50,240 --> 01:05:53,360
Speaker 14: back quite strongly and cites that your rant based in

1230
01:05:53,400 --> 01:05:57,280
Speaker 14: our returns of your off your investment investments SARN don't

1231
01:05:57,280 --> 01:06:00,320
Speaker 14: look as fantastic because as very mentioned, you know, lost

1232
01:06:00,320 --> 01:06:02,840
Speaker 14: a little bit on the currency translation and even whs

1233
01:06:02,920 --> 01:06:05,360
Speaker 14: you know, if if that dollar based asset or that

1234
01:06:05,440 --> 01:06:08,440
Speaker 14: cren based asset has actually done badly for you, you

1235
01:06:08,560 --> 01:06:10,840
Speaker 14: get what you call it double wheming. So so yes,

1236
01:06:10,880 --> 01:06:13,560
Speaker 14: you know, the you know, to date, you know, trying

1237
01:06:13,600 --> 01:06:16,680
Speaker 14: to figure out where to invest has become a bit trickier.

1238
01:06:17,280 --> 01:06:19,640
Speaker 14: What we tend to do though, for our multi asset

1239
01:06:19,720 --> 01:06:23,720
Speaker 14: products is being South African investors investing with the Afican clients.

1240
01:06:24,120 --> 01:06:27,440
Speaker 14: We try and maximize on the local allocation first to

1241
01:06:27,520 --> 01:06:31,000
Speaker 14: see where I resume opportunities domestically, and then once we've

1242
01:06:31,040 --> 01:06:33,040
Speaker 14: reached what we call our max and from a restuar

1243
01:06:33,080 --> 01:06:35,360
Speaker 14: what point of view, then the residual then look or

1244
01:06:35,400 --> 01:06:37,760
Speaker 14: show to say, okay, where can we get the best returns,

1245
01:06:38,320 --> 01:06:41,320
Speaker 14: you know, given what we're seeing out there, And then

1246
01:06:41,360 --> 01:06:43,920
Speaker 14: the rant can be a big deciding fact on that.

1247
01:06:44,040 --> 01:06:45,760
Speaker 14: And yes, we do have a few tools you can

1248
01:06:45,920 --> 01:06:48,920
Speaker 14: use to try and hedge yourself from that ran STrenD

1249
01:06:49,000 --> 01:06:51,360
Speaker 14: coming back to you and the form of derivatives, but

1250
01:06:51,640 --> 01:06:53,520
Speaker 14: it is a consideration. So even if you're going to

1251
01:06:53,640 --> 01:06:55,920
Speaker 14: buy insurance in the form of a derivative, you know,

1252
01:06:56,000 --> 01:06:58,680
Speaker 14: bet comments at some cost, which will obviously eat into

1253
01:06:58,760 --> 01:07:01,160
Speaker 14: your returns whatever you see them. And then the third

1254
01:07:01,280 --> 01:07:04,240
Speaker 14: part is then once you've got the rand sorted or

1255
01:07:04,320 --> 01:07:06,760
Speaker 14: the currency sorted, then obviously you tould pick you know,

1256
01:07:06,840 --> 01:07:09,520
Speaker 14: which which region, which stocks that can give you the

1257
01:07:09,600 --> 01:07:12,680
Speaker 14: best return of your of your money. And then to date,

1258
01:07:13,360 --> 01:07:16,120
Speaker 14: you know, despite all the issues with that would be

1259
01:07:16,840 --> 01:07:19,800
Speaker 14: with the dollar itself, you know, it's kind of tricky

1260
01:07:19,960 --> 01:07:23,480
Speaker 14: to see the growth elsewhere in the world, right that

1261
01:07:23,720 --> 01:07:26,160
Speaker 14: that that that can take over from the US. So

1262
01:07:26,280 --> 01:07:28,640
Speaker 14: you do therefore tend to deflect back to the US

1263
01:07:29,040 --> 01:07:30,920
Speaker 14: and try and pick stocks that you think will do well.

1264
01:07:31,280 --> 01:07:33,520
Speaker 14: And then that's what the actually vidias and all it

1265
01:07:33,600 --> 01:07:36,040
Speaker 14: can stuff which sort of come up. From a growth

1266
01:07:36,080 --> 01:07:38,320
Speaker 14: point of view, you have to think about valuation. But

1267
01:07:38,440 --> 01:07:41,800
Speaker 14: what I'm suggesting is despite all the issues with the US,

1268
01:07:41,960 --> 01:07:44,000
Speaker 14: you know, from a growth point of view, you know

1269
01:07:44,080 --> 01:07:46,080
Speaker 14: it's it's it's it's kind of tricky to find other

1270
01:07:46,160 --> 01:07:49,200
Speaker 14: regions that can grow faster and and you know, good

1271
01:07:49,280 --> 01:07:50,720
Speaker 14: quality arnings and that kind of stuff.

1272
01:07:51,400 --> 01:07:55,160
Speaker 3: Patrick Matitious, head of Multi st Strategies at Aliwani Capital Partners,

1273
01:07:55,200 --> 01:07:57,440
Speaker 3: Gary boys and director at rand Swiss. Should you that

1274
01:07:57,680 --> 01:07:58,160
Speaker 3: the dollar?

1275
01:07:58,720 --> 01:07:58,919
Speaker 9: More?

1276
01:07:59,160 --> 01:08:02,360
Speaker 3: In just a moment on Investment School ten minute state The.

1277
01:08:02,400 --> 01:08:05,160
Speaker 8: Money Show with Stephen Quotas is brought to you by

1278
01:08:05,240 --> 01:08:08,720
Speaker 8: abs as cib a Pan African bank invested in your

1279
01:08:08,800 --> 01:08:11,960
Speaker 8: story and the potential it can unlock it because your

1280
01:08:12,040 --> 01:08:13,280
Speaker 8: story matters.

1281
01:08:13,720 --> 01:08:15,080
Speaker 5: That does the rast f SP.

1282
01:08:16,680 --> 01:08:19,200
Speaker 2: The Money Show, Investment School.

1283
01:08:19,040 --> 01:08:21,599
Speaker 3: Eight minutes now to eight the time. Patrick Matidi's head

1284
01:08:21,600 --> 01:08:25,000
Speaker 3: of Multi sid Strategies at Aliwani Capital Partners, Gary Boysen's

1285
01:08:25,040 --> 01:08:27,280
Speaker 3: director at rand Swiss. We're talking about should you ditch

1286
01:08:27,479 --> 01:08:29,800
Speaker 3: the dollar? Garry. One of the issues is what you

1287
01:08:29,840 --> 01:08:33,680
Speaker 3: would call the d dollarization trade, and there's been a

1288
01:08:33,760 --> 01:08:36,640
Speaker 3: little bit of talk about sort of trading another currencies,

1289
01:08:37,400 --> 01:08:40,320
Speaker 3: perhaps the sort of bricks kind of digital currency, which

1290
01:08:40,360 --> 01:08:42,719
Speaker 3: for the moment doesn't look like it's going to go anywhere.

1291
01:08:43,160 --> 01:08:45,920
Speaker 3: It might in the future. But just that talk, the

1292
01:08:46,000 --> 01:08:48,519
Speaker 3: fact there's so much of it, the fact that digital

1293
01:08:48,600 --> 01:08:51,040
Speaker 3: currencies make it more of a possibility, all of that

1294
01:08:51,200 --> 01:08:53,920
Speaker 3: must weaken the dollar. We know it infuriates Trump, so

1295
01:08:54,040 --> 01:08:56,080
Speaker 3: it must do certainly.

1296
01:08:56,240 --> 01:08:59,120
Speaker 16: So if you look at it when I say thesolars

1297
01:08:59,360 --> 01:09:01,840
Speaker 16: reference current, you know, think about it just in terms

1298
01:09:01,880 --> 01:09:04,880
Speaker 16: of how we do an offshore transaction. For example, you know,

1299
01:09:04,960 --> 01:09:07,439
Speaker 16: if I want to go and buy you know, let's

1300
01:09:07,439 --> 01:09:10,240
Speaker 16: say New Zealand dollars for a client today, I don't

1301
01:09:10,280 --> 01:09:12,760
Speaker 16: get to go into the Swift system and go and

1302
01:09:12,920 --> 01:09:15,320
Speaker 16: buy New Zealand swap my South African rand for New

1303
01:09:15,400 --> 01:09:17,559
Speaker 16: Zealand dollars. I've got to swap my South African rand

1304
01:09:17,560 --> 01:09:19,519
Speaker 16: into US dollars. Then I've got to swap US dollars

1305
01:09:19,560 --> 01:09:22,559
Speaker 16: into New Zealand dollars. That is the mechanism. And that's

1306
01:09:22,640 --> 01:09:25,080
Speaker 16: that's when I say how crucial the US dollar is

1307
01:09:25,160 --> 01:09:27,519
Speaker 16: to the system. And I mean this is all like

1308
01:09:27,600 --> 01:09:29,960
Speaker 16: all international payments at the mode or most run through

1309
01:09:30,000 --> 01:09:32,280
Speaker 16: the Swift system. And you'll remember, you know, when the

1310
01:09:32,439 --> 01:09:35,960
Speaker 16: Russia Ukraine conflict started. How you're one of the tools

1311
01:09:36,040 --> 01:09:38,360
Speaker 16: that the West used was to freeze Russia out of

1312
01:09:38,439 --> 01:09:40,800
Speaker 16: the swift system. And I think what happened there is

1313
01:09:41,120 --> 01:09:43,680
Speaker 16: you know that that was kind of unprecedented. It was

1314
01:09:43,800 --> 01:09:47,519
Speaker 16: saying like, wait a minute, these this this massive financial

1315
01:09:47,600 --> 01:09:50,160
Speaker 16: infrastructure that the globe has relied on for so long,

1316
01:09:50,560 --> 01:09:54,360
Speaker 16: is now almost being weaponized in geopolitical conflict. Immediately, You've

1317
01:09:54,400 --> 01:09:56,320
Speaker 16: got the likes of Russia, China, bris all looking at

1318
01:09:56,360 --> 01:09:58,439
Speaker 16: this going wait a minute, if it happened to Russia,

1319
01:09:58,479 --> 01:10:00,400
Speaker 16: it can happen to us as well. And I think

1320
01:10:00,479 --> 01:10:02,479
Speaker 16: that's where you've seen And if you if you look

1321
01:10:02,520 --> 01:10:04,360
Speaker 16: at a chart you know of kind of central bank

1322
01:10:04,439 --> 01:10:07,320
Speaker 16: assets and aggregate, you can see it quite clearly. Central

1323
01:10:07,360 --> 01:10:09,760
Speaker 16: banks around the world have been selling off their dollar

1324
01:10:09,800 --> 01:10:12,680
Speaker 16: assets and replacing them with gold. The other assets that

1325
01:10:12,720 --> 01:10:15,280
Speaker 16: sit on central bank balance sheets have actually been pretty stable.

1326
01:10:15,680 --> 01:10:17,760
Speaker 16: It has been a deed dollarization trade. It's been a

1327
01:10:17,800 --> 01:10:21,160
Speaker 16: move away from US dollars selling US dollars, picking up

1328
01:10:21,439 --> 01:10:24,000
Speaker 16: precious metals as a as a counter and it's I

1329
01:10:24,040 --> 01:10:26,840
Speaker 16: think to remove the reliance. And where the endgame is

1330
01:10:26,880 --> 01:10:29,920
Speaker 16: I think is still years away. But for anyone very

1331
01:10:29,960 --> 01:10:33,000
Speaker 16: interested in monetary policy, it's it's a big shift. It's

1332
01:10:33,040 --> 01:10:35,760
Speaker 16: a big shift, and it's it's you know, it's one

1333
01:10:35,760 --> 01:10:37,479
Speaker 16: of the reasons that we've got the gold price above

1334
01:10:37,520 --> 01:10:39,880
Speaker 16: five thousand dollars an ounce at the moment and doesn't

1335
01:10:39,880 --> 01:10:42,519
Speaker 16: look like that's going to stop anytime soon, because until

1336
01:10:42,560 --> 01:10:45,240
Speaker 16: the central banks stopped doing this, it's going to keep going.

1337
01:10:46,600 --> 01:10:49,040
Speaker 3: Patrick Matidi, one of the key questions to all of

1338
01:10:49,120 --> 01:10:51,640
Speaker 3: this is where we think the dollar will end up,

1339
01:10:52,120 --> 01:10:54,120
Speaker 3: As always in a possible question when you're looking at

1340
01:10:54,200 --> 01:10:57,840
Speaker 3: currencies or the gold price or whatever. And it's one

1341
01:10:57,920 --> 01:10:59,720
Speaker 3: thing to say, as Gary pointed out, that on the

1342
01:10:59,760 --> 01:11:03,200
Speaker 3: dollar index, it's still within kind of historical norms. My

1343
01:11:03,320 --> 01:11:05,759
Speaker 3: own sense of it are no experts on American politics,

1344
01:11:05,800 --> 01:11:09,000
Speaker 3: but unfortunately we've all become kind of experts. My own

1345
01:11:09,040 --> 01:11:11,280
Speaker 3: sense of it is that Trump is only just beginning,

1346
01:11:12,320 --> 01:11:14,559
Speaker 3: That the attacks on the independence of the US Federal

1347
01:11:14,640 --> 01:11:18,120
Speaker 3: Reserve and your own power will continue, That whoever succeeds

1348
01:11:18,200 --> 01:11:21,400
Speaker 3: power will be more inclined to listen to Trump, That

1349
01:11:21,640 --> 01:11:24,280
Speaker 3: that sort of anchor of the world economy will possibly

1350
01:11:24,360 --> 01:11:28,400
Speaker 3: fall away. I mean all of those things again, everything

1351
01:11:28,439 --> 01:11:31,200
Speaker 3: that pushes a higher goal price is likely to lead

1352
01:11:31,240 --> 01:11:34,200
Speaker 3: to a week a dollar and then that means if

1353
01:11:34,240 --> 01:11:36,200
Speaker 3: you don't know where the sort of floor of the

1354
01:11:36,280 --> 01:11:38,200
Speaker 3: dollar is in the next three years, how do you

1355
01:11:38,280 --> 01:11:39,760
Speaker 3: make investment decisions from there?

1356
01:11:42,720 --> 01:11:45,320
Speaker 14: Yeah, Steve, and those are the issues we crap them

1357
01:11:45,360 --> 01:11:47,800
Speaker 14: with in term of trying to see you know that

1358
01:11:47,920 --> 01:11:51,680
Speaker 14: they are another light on this one. Look on the

1359
01:11:51,760 --> 01:11:54,000
Speaker 14: politics side, I meanly Trump.

1360
01:11:53,840 --> 01:11:57,479
Speaker 15: Is highly unpredictable and and anything is possible, you know

1361
01:11:57,479 --> 01:12:00,559
Speaker 15: when it comes toships in politics. But I think there

1362
01:12:00,600 --> 01:12:02,240
Speaker 15: is a bit of a backstop coming up. You know,

1363
01:12:02,280 --> 01:12:04,720
Speaker 15: it may still be a bit further away and they

1364
01:12:04,800 --> 01:12:06,840
Speaker 15: do that is the mid terms, and then a little

1365
01:12:06,840 --> 01:12:09,160
Speaker 15: bit more imminent could be you know, sort of what

1366
01:12:09,240 --> 01:12:12,360
Speaker 15: they shut down where that maybe can sort of sober

1367
01:12:12,640 --> 01:12:14,920
Speaker 15: up a little bit. But but you know, there is

1368
01:12:14,960 --> 01:12:17,479
Speaker 15: called being a political analyst, which I'm far from being.

1369
01:12:17,640 --> 01:12:17,880
Speaker 16: Fun.

1370
01:12:18,880 --> 01:12:22,960
Speaker 14: I suspect, you know, the end, assuming is survived this

1371
01:12:23,439 --> 01:12:26,280
Speaker 14: upcoming events, you know, the end of you will obviously

1372
01:12:26,400 --> 01:12:29,080
Speaker 14: be when he's out of you know, out of office,

1373
01:12:29,600 --> 01:12:32,080
Speaker 14: and and then hopefully we get someone a bit more taen,

1374
01:12:32,160 --> 01:12:35,000
Speaker 14: a bit more understanding. But also you know, I think

1375
01:12:35,040 --> 01:12:37,559
Speaker 14: the average American can can start to feel the brand

1376
01:12:37,560 --> 01:12:39,840
Speaker 14: of his policies and hopefully, you know, they start to

1377
01:12:39,880 --> 01:12:41,960
Speaker 14: do the right thing in terms of their boating patterns.

1378
01:12:42,320 --> 01:12:44,720
Speaker 14: But that being a side and to which again a

1379
01:12:44,840 --> 01:12:47,280
Speaker 14: huge disdain and moder an expect on I think on

1380
01:12:47,439 --> 01:12:50,400
Speaker 14: the on the finance side, where do we have some

1381
01:12:50,560 --> 01:12:54,160
Speaker 14: little bit of insight? I think they do the one thing.

1382
01:12:54,120 --> 01:12:54,800
Speaker 5: You can do.

1383
01:12:55,680 --> 01:12:56,680
Speaker 14: You can't call you know.

1384
01:12:56,720 --> 01:12:59,920
Speaker 15: Any currency, but what you can do is established by yourself.

1385
01:13:00,320 --> 01:13:02,560
Speaker 15: And also that way it ends accused to for a

1386
01:13:02,560 --> 01:13:05,240
Speaker 15: few more leaders in your portfolio that you're not hit

1387
01:13:05,400 --> 01:13:09,000
Speaker 15: by taking massive directional views that you have not yell

1388
01:13:09,800 --> 01:13:12,080
Speaker 15: insight in terms of being able to call. So so

1389
01:13:12,240 --> 01:13:15,040
Speaker 15: that that that is probably I guess, as they say,

1390
01:13:15,200 --> 01:13:17,320
Speaker 15: you know, the one freelanted when it comes to investing,

1391
01:13:17,640 --> 01:13:19,840
Speaker 15: I just adversify yourself, make sure that you know you're

1392
01:13:19,880 --> 01:13:24,200
Speaker 15: not pinning or hopes on one singular event that may

1393
01:13:24,280 --> 01:13:26,040
Speaker 15: or may not play out, and if it doesn't, you know,

1394
01:13:26,120 --> 01:13:27,519
Speaker 15: you find yourself on the wrong side of things.

1395
01:13:28,800 --> 01:13:31,840
Speaker 3: So interesting, Gary, there's another way to look at all

1396
01:13:31,880 --> 01:13:33,320
Speaker 3: of this, which is that if you want to get

1397
01:13:33,360 --> 01:13:37,200
Speaker 3: into the US stock market, and it's expensive right now,

1398
01:13:37,720 --> 01:13:39,400
Speaker 3: but in two years time, maybe it won't be.

1399
01:13:41,400 --> 01:13:43,519
Speaker 16: Problem is where do you park in the meantime, because

1400
01:13:44,360 --> 01:13:46,360
Speaker 16: you said, you know, with a with a weekening dollar

1401
01:13:46,479 --> 01:13:49,600
Speaker 16: worth three years left, you know of the Trump administration

1402
01:13:49,680 --> 01:13:53,479
Speaker 16: at least you know it doesn't look like the momentum

1403
01:13:53,560 --> 01:13:54,920
Speaker 16: is going to slow at any point. Where do you

1404
01:13:55,040 --> 01:13:56,479
Speaker 16: not want to be and you don't want to be

1405
01:13:56,560 --> 01:13:59,280
Speaker 16: in cash, So you need to find some way to park,

1406
01:13:59,600 --> 01:14:01,479
Speaker 16: some sort of safe av in the parking and wait.

1407
01:14:01,560 --> 01:14:03,080
Speaker 16: If you are going to wait for a dip in

1408
01:14:03,160 --> 01:14:06,879
Speaker 16: financial markets. The problem is that trying to time markets

1409
01:14:06,920 --> 01:14:11,439
Speaker 16: and call the slide is incredibly difficult. And despite incredibly

1410
01:14:11,520 --> 01:14:14,760
Speaker 16: negative news headlines that we've had over the last say

1411
01:14:14,880 --> 01:14:17,720
Speaker 16: twelve months, the mark, other than the Liberation Day sell

1412
01:14:17,760 --> 01:14:20,360
Speaker 16: off that we had last year, markets have been remarkably

1413
01:14:20,479 --> 01:14:23,720
Speaker 16: robust and you know, waiting for a sell off in

1414
01:14:24,040 --> 01:14:28,920
Speaker 16: the US companies where we have very strong GDP predictions,

1415
01:14:29,400 --> 01:14:31,439
Speaker 16: you're looking at the earning season that's rolling through at

1416
01:14:31,479 --> 01:14:34,000
Speaker 16: the moment. I mean, yes, there's been missus here and there,

1417
01:14:34,120 --> 01:14:37,080
Speaker 16: there's been a couple of big stock moves. In aggregate,

1418
01:14:37,120 --> 01:14:40,840
Speaker 16: it's been very, very strong, and it's not rarely the

1419
01:14:40,920 --> 01:14:43,280
Speaker 16: kind of earnings momentum that you'd probably want to better

1420
01:14:43,439 --> 01:14:45,599
Speaker 16: against you. You might take a view on the valuations

1421
01:14:45,600 --> 01:14:48,920
Speaker 16: because the US stock markets do look expensive, but they

1422
01:14:48,920 --> 01:14:51,240
Speaker 16: are expensive kind of for a reason, because there's a

1423
01:14:51,280 --> 01:14:52,840
Speaker 16: lot of earnings momentum at the moment.

1424
01:14:53,400 --> 01:14:56,519
Speaker 3: Gary Boyson, thank you so much, director at rand Swiss

1425
01:14:56,560 --> 01:15:00,240
Speaker 3: and Patrick Matidi's head of multi asset Strategies at One

1426
01:15:00,520 --> 01:15:03,679
Speaker 3: Capital Partners. Gentlemen, really to appreciate your time. I hope

1427
01:15:03,680 --> 01:15:05,400
Speaker 3: you're going to ask some I hope we've given you

1428
01:15:05,520 --> 01:15:08,360
Speaker 3: some insight on whether or not you should ditch the dollar.

1429
01:15:08,439 --> 01:15:10,200
Speaker 3: On Investment School, The.

1430
01:15:10,280 --> 01:15:13,040
Speaker 8: Money Show with Stephen Curtis is brought to you by

1431
01:15:13,120 --> 01:15:16,599
Speaker 8: abs as cib a Pan African bank invested in your

1432
01:15:16,680 --> 01:15:21,160
Speaker 8: story and the potential it can unlock because your story matters.

1433
01:15:21,600 --> 01:15:24,559
Speaker 3: That is a raised f sp Well, while we've been

1434
01:15:24,600 --> 01:15:27,439
Speaker 3: talking about whether it's time to ditch the dollar, splash

1435
01:15:27,479 --> 01:15:30,120
Speaker 3: on roses that Trump plans to announce his Federal Reserve

1436
01:15:30,240 --> 01:15:33,920
Speaker 3: chair next week. Something to look forward to. I suppose

1437
01:15:34,360 --> 01:15:37,200
Speaker 3: in the meantime, US markets not having a good day.

1438
01:15:37,240 --> 01:15:39,400
Speaker 3: The Dow Jones is flat down point zero one, the

1439
01:15:39,479 --> 01:15:42,160
Speaker 3: Nasdaq is down one point four to three. In the

1440
01:15:42,320 --> 01:15:45,000
Speaker 3: s and P. Five hundred is down zero point sixty five.

1441
01:15:45,080 --> 01:15:47,479
Speaker 3: Aubrey Maasuanle will be more uplifting. Good evening. It's eight

1442
01:15:47,520 --> 01:15:47,880
Speaker 3: o'clock