Worldwide Markets - Episode 666 📊
18 February 2025
🇿🇦 South African Economic Indicators
- Unemployment hits 5-year low - but still a tragic 31.4%
- The Achilles heel: Need GDP growth to break below 20%
- 10-year bond yields at decade lows - 7.97% (down from 11% during load shedding)
- Government saving on new bond issuances, though impact is modest
- Potential budget windfall from precious metals next week
ZA 10-year yield | weekly
🤖 AI Valuations: Testing Anthropic's Opus 4.6
- Can AI do DCF valuations? Testing on Dell (NYSE: DELL)
- Opus 4.6 created detailed discounted cash flow model in ~10 minutes
- 148 formulas, zero errors (after self-correction)
- Fair value estimate: $172 vs current ~$115 (significant upside potential)
- ⚠️ Important caveats: Sensitivity assumptions critical (WACC, terminal growth, risk-free rate)
- DCF is just ONE valuation methodology
- Rate limiting kicks in with heavy usage ($20/month tier)
- US stocks work better than local stocks currently
💼 US Economy Update
- Strong fundamentals emerging:
- $600B+ capex spend by hyperscalers (Alphabet, Meta, Microsoft)
- Better-than-expected January CPI
- Unemployment at 4.3% (jobs report revised down 1M though)
- GDP tracking closer to 3% than 1-1.5%
- Two rate cuts still on the table for 2025
- Tech infrastructure spending providing economic underpin
🚚 The Karaoke Company Logistics Disruption (?)
- Algorhythm stock chaos: Up 222% Friday, another 15% pre-market Tuesday
- From karaoke company to AI logistics software ("SemiCab") in 6 months
- Entire logistics sector sold off on the news
- Reality check needed: Santova and others already doing this with Oscar software
- Market overreaction? Small operators still use fax machines
- Don't panic-short established players like Santova
📅 Upcoming Events
Powered by Standard Bank Global Markets, Retail and Shyft
"Look after yourself. If you can look after somebody else as well." 💚
Simon Brown
* I hold ungeared positions.
All charts by KoyFin | Get 10% off your order
