By Alec Hogg
Over the weekend the Greeks will finally decide their economy’s fate (The Greeks voted ‘No’ with a 61.31% victory). Perhaps they’ll sober up and appreciate that after the Ouzo and breaking of plates, someone has to pick up the tab. Greece’s days of leaving the cost of their party to other Europeans are drawing to a close.
As a recent article in Vanity Fair pointed out, in the last decade the wage bill of Greece’s public sector has doubled in real terms (i.e after removing the impact of inflation). An example of the profligacy is at the national railroad which has a wage bill four times its annual revenues of e100m (average employee earns R885,000 a year). A former Finance Minister calculated that it would be cheaper to close down the railroad and pay for all the passengers to use taxicabs.
Greece’s education system is among the lowest ranked in Europe but it employs four times more teachers per pupil as Finland, the highest rated. The official retirement age for Greeks is 50 for women and 55 for men in 600 “arduous” professions (where they qualify for generous pensions) like waiters, radio announcers, musicians and hairdressers. And so on.
Will the turkeys vote for Christmas and finally accept austerity is the best way out?
The other big investment focus of the moment is in China where a stock market bubble is deflating even faster than it expanded. Three weeks into the Crash, share prices have dropped almost 30%, despite attempts by the Chinese Government to stem the selling tsunami.
For many South Africans, China’s developments are deeply concerning – virtually the entire market value of high flying JSE-listing Naspers is accounted for through its 34% stake in Hong Kong listed Tencent. So far the Hong Kong market has been little impacted. But with Shanghai investors having punted just as heavily in the south, as their losses mount the risk of contagion grows.
The Biznews Global Share portfolio avoided all this drama because it is focused on the US. We took this approach for a couple reasons – first, New York has deep and transparent capital markets; second, the US economy is best structured to reward human initiative which, after all, is what you’re betting on when buying shares.
Our portfolio has been flying but that’s not really the objective. Its real purpose is to provide a guideline from which you can build your own offshore portfolio through the Standard Bank Webtrader platform, which opens up the world and keeps costs to a minimum.
We also hold an interactive webinar on the portfolio every month, making it easy to keep updated on the holdings and their performance. And if you miss it the live half hour, there’s also a recording and transcript available on Biznews to access at your convenience.
When you get some free time, go have a watch of the June webinar. It provides detail on how we’ve made the investments, the structure of the portfolio and how it’s been doing. If you like the sound of 12% US Dollar growth in seven months…
From Biznews – June’s best read Global Investment articles
Lighten up Eskom: The way we get electricity is about to change forever!
Once more last month, the best read Global Investing story among the Biznews community is one which focuses on the exploding field of renewable energy. With prices falling, there’s a very important message for Eskom: Be very cautious about becoming too committed to a plan that relies on expensive “dirty” power plants.
China Stock Market crash continues, losses take three-week drop to 24%
Many South Africans haven’t been paying as much attention to the Crash in Shanghai as they should be. Biznews community members, however, are up with the news with the possibility of contagion growing, especially with Hong Kong (where Naspers’ 34% share price driver Tencent is listed).
Tesco & “Stockspin” – lessons for Pick n Pay & other retailers?
Warren Buffett buys stocks “forever”. Except when he discovers management cannot be trusted. So when he dumped his Tesco shares last year, taking a $450m loss, he sent a strong message. In this excellent contribution independent analyst Ted Black outlines some lessons to be learnt from the Tesco nightmare.
An interview to catch up on:
Biznews Classic: Sir John Templeton’s 16 Laws of Investment
Billed as a Classic, this truly is. The late Sir John Templeton was once asked why he based himself in Nassau, Bahamas. His response tells us much about the masterful investor’s belief in staying away from the crowd: “Because the Wall Street Journal arrives here a day late.” This video was made by his old firm to celebrate what would have been Templeton’s 100th birthday. We’ve added his famous 16 Laws of Investment – a guide for everyone who aims to build their wealth.
And don’t forget to visit the dedicated Global Investing section of Biznews.com updated daily for the freshest news of investment opportunities available outside of South Africa.
