Plague diary, week 3: In the past few days it has become increasingly difficult to shake off the cobwebs of morbidity. I fully appreciate the seriousness of Covid-19, but I can’t handle being hemmed in. It was worse when it rained on Sunday, and I could not even trudge around the property, hunched under the burden of the damned medicine ball and chafing from ill-fitting ankle weights.
How I long for the simple pleasures of a head-clearing 5km run and — especially — the therapeutic high jinks of my pals at the Fish Hoek Tennis Club. Cunning plans to modify an automatic tennis-ball machine into a missile launcher (by loading it with petrol-soaked balls and taking potshots at the bowling club’s flagpole) provided a welcome distraction on WhatsApp, for a while.
Eventually, my "lighten the hell up" effort was helped — not by the reckless sampling of the toadstools growing in the pool filter box, but by receiving the e-statement for my American Express card. This must be the first time ever my Amex statement has reflected a positive balance.
I would attribute this to one main factor — the flattening of the Uber curve. With my son passing his driver’s licence in February, the demand for Uber has dropped off a cliff.
A win on the balance sheet is always a big victory — though there is a nagging foreboding that I should perhaps be impairing the value of my vinyl stock to take into account that Covid-19 has turned the tables on the local record market.
In terms of investments, the Hasenfuss Reverse Indicator (HRI), I’m unhappy to report, appears to be functioning perfectly. After a robust discussion with my wife — who keeps a beady eye on the outstanding bond — I decided to cash out 80% of two global unit trusts to use hard currency to cull some of our soft-currency debt. Perfectly prudent, I’d contend.
Of course, only hours after tapping out the unit trust funds, the rand stumbled through the R19/$ mark.
Never doubt the HRI.
In truth, this has not been a terrible period for the portfolio. British American Tobacco keeps smouldering away, and my positions in hedge instruments like NewGold (along with various NewWave currency plays) remain a source of comfort.
Pharmaceutical group Adcock Ingram has proved a tonic, while Ascendis even perked up briefly (at least enough to facilitate some profit-taking). Hosken Consolidated Investments also found traction, and its rebound inspired me to flirt with another two investment companies. I thought the much-overlooked Sabvest at less than R30 offered good value, while RECM & Calibre (RAC) looked a worthwhile punt, having slipped to below the level at which it listed in 2010.
In terms of RAC, I still believe its large investment in alternative gaming business Goldrush will pay off handsomely over the longer term. What I am praying for is that prevailing circumstances prompt RAC to think twice about mobilising the cash gained from the Astoria takeover to buy into struggling retailer CNA.
I can’t see that ending well, and the last thing RAC needs is another dud investment after Distribution & Warehousing Network and Trans Hex.
I also fortified, albeit slightly, my rand hedge position with forays into Trencor and property counter Atlantic Leaf.
The significant losses this week were again in the veggie patch. At one point the crops were looking as wholesome as the Oklahoma! soundtrack, but the persistent baboon raids are reducing the yield markedly. The baboons have adopted a divide-and-conquer strategy — one male taunts the Jack Russells from the roof at the front of the property, while the rest of the troop raid the veggie patch at the back before the sentry can draw a bead on them (with the unloaded pellet gun). We probably did well to lose only a few carrots, but the subsequent "sniff out" by the dogs is when the real damage happens.
Thereby hangs a tail
Dexter, a cross between a Jack Russell and a pit bull, ploughs his way through chicken wire (disappointingly cheered on by my children) like a torpedo through a bed of kelp … emerging, wire-clad, like an extra from Mad Max. I probably need to temper my expectations of attracting the now cash-flush agribusiness investor Zeder as an equity partner.
Speaking of Zeder, I might be tempted — after the Pioneer Foods special dividend is paid — to have a gander. The business is well capitalised with some interesting listed and unlisted positions that feed into the food security thrust — most notably fruit producer and exporter Capespan and seed business Zaad. I will be particularly fascinated to see the value Zeder accords to Zaad (at last count more than R2bn) in the upcoming final results.
For the week ahead, I’m watching the share prices of Libstar, Distell and Spur Corp — hoping that I might have an opportunity to buy in at levels I previously could only fantasise about.
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