Le Roux International - Summit Push

Gerhard le Roux

July 2020

Nobody climbs mountains for scientific reasons. Science is used to raise money for the expeditions, but you really climb for the hell of it. Edmund Hillary

My wife sent me this quote last night while researching quiz topics for their daily ritualistic corporate bonding exercise. It made me smile. The truth is, the comfort we humans derive from routine in the face of complete uncertainty is fascinating. The effort people and companies are willing to expend to create a version of normality and routine with their associated positive benefits is worth reflecting on.

However, the reality is that our current global predicament of lockdowns and pandemics is not normal. Still, I want to do my part to create a bit of ritual in a realm that many consider scary and chaotic, investments, and markets. I want this letter to be an open and honest platform to discuss the prominent investment-related topics that would be of value to my clients and create a bit of colour where possible by sharing content I find interesting or personally valuable.

News and Markets

You probably do not need another voice telling you its bad out there. Still, South Africa and the US have seen a massive spike in the number of COVID cases, hospitals are filling up, and consumers might only re-emerge in the spring. If you look at markets, all is well.

It was another stellar month for equities globally as the COVID recovery rally surprised even the most optimistic investor to the upside.

·      The US markets traded up 4.5% for the month

·      JSE Top40 had a roaring month up 7.8%

·      SA 10-year bonds are trading at an attractive yield of 9.2%

A possible case of "bad news is good news" as markets treat the possibility of mass infections and company shutdowns as a trigger for another round of stimulus in the US, pushing markets even higher. Its also election season in the US, and the stimulus could easily continue till the election in November. Trump and his mates are the "ends justify the means" type that is happy to wager the long-term stability of financial markets to hold onto power.

Actions to take

You will have to get in touch to find out more.

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For some time, I have been interested in decision making, and in my search, I found Farnam Street, and I could not recommend their work more highly. In the time of COVID, it might be of benefit to you to develop your decision-making muscles.

In keeping with the golden thread of this letter, I found the Farnam Street podcast with Jennifer Garvey Berger: Creating Routine in Chaos [The Knowledge Project Ep. #84] super valuable as we deal with loss and the blizzard of emotions in our daily realities.

This was fun. Chat soon.