WEBINAR: Rand hedge paying dividends, as politics wins again

Alec Hogg takes us through the performance and current position of the Biznews.com Global Share Portfolio Webinar, which is proving to be highly successful. If you've just joined in on this journey, not to worry. Hogg provides a comprehensive breakdown of how the shares are doing and how the companies, split between the likes of Apple, Amazon, Berkshire Hathaway, Alphabet, IBM and Novo Nordisk are performing..Alec Hogg: Good afternoon, it has just gone 12:30 and we look forward to taking you for the next half hour through the latest developments on the Biznews Global Portfolio. I'm Alec Hogg and with me in the studio is Stuart Lowman, the one and only team from Biznews. We're coming to you from the richest square mile in Africa. Our offices here, at the Johannesburg Stock Exchange, which was quite an interesting place I believe, earlier this week but we weren't here..___STEADY_PAYWALL___.Stuart Lowman: It was. .We weren't here. We were all working at home..I think we are lucky to have that remote working facility, Alec as we had a sea of red running through Sandton. .There was something like 10,000 EFF….Forty thousand..Forty thousand, serious?.That's what they said..Reuters said 10,000, so depending on… I suppose Julius would have said 40,000. Anyway, Julius sat in that very same chair that you are sitting in now, this is Julius Malema but he was a lot more calmer on that day, then I guess he was when he came to the JSE. Anyway, we're not talking about the JSE. We're talking about the Biznews Global Portfolio and the reason we decided to go global a year ago, is related to something that happened, I guess, this week at the JSE. We feel that the country is being poorly managed economically. As a consequence, we're very strongly of the view here at Biznews that the Rand will weaken and not strengthen. We've changed our minds from our past approach, where we would always support reinvestment of capital into South Africa..Now we think that it's the right thing to do to, actually bring this government to its senses by investing where you can get the best return on your money and it is not in this country, unfortunately. Anyway, that's what we've decided to do with the Biznews Global Portfolio, and it's been a good move so far..Let's go into where we are at the moment. I'm going to get my technologically challenged right finger clicking, and away it goes. There is the portfolio. If you have a WebTrader account, you would recognise exactly what this is. The account overview. We started the portfolio on the 5th December 2014, so we're coming up for a year. We're 11 months in. In US Dollar terms it's grown from an initial amount of $200,000 to $224,000..It is always a high risk to do a portfolio like this because it goes into the public domain, so anybody can see if you're idiotic in your selections. We've been very fortunate in our selections over the year, as you can see here, but we did say from the outset that this is a portfolio where the period hold is forever, so just remember that..We are not going in to buy these shares on the basis that you trade them. We believe trading is for fools. We are investors. Not speculators and the portfolio overview there shows a reflection of exactly what we believed in. There is a big chunk of the portfolio is in the market overall, the Vanguard S&P 500 ETF. What that does is it mirrors the American Stock Market and it has not done a whole lot in the past year but it had a couple of fantastic months, and we'll bring you up to date on that in a moment..Then the individual share text, which is very easy to see when you have a look down at the profit and loss. The best performers by far were Amazon.com, which is up 88 percent in US Dollar terms, over 100 percent in South African Rand. Then a very good run for Alphabet, which is Google, the old Google. They've changed their name now, and then also a very good performance from Novo Nordisk, in US Dollar terms. Also in US dollar terms we have had our other three holding, Apple, Berkshire Hathaway, and IBM are all below the price at which we bought them out, in the portfolio, so it just reaffirms the view that these are long term investments..Just having a look at the prices at the opening. As you can see this portfolio began on the 5th December 2014. Those were the cost prices. The idea was to have one-third of the portfolio in Vanguard, in other word in the Overall Index, to then have 15 percent each, initially, in Google and Berkshire Hathaway because two companies that we believe were the best in the world. We then, after doing a lot of analysis, into Apple – we decided to go with that one as well, so we've got 15 percent stakes in those three companies – 45 percent, if you like in our three big star picks. Then the smaller star picks, Amazon, Novo Nordisk, and IBM, with eight percent in each. It's a very structured portfolio. It is 30 percent into the market overall – 15 percent each, into Alphabet, Apple, and Berkshire Hathaway. Then eight percent each into Amazon, Novo Nordisk, and IBM..We've been looking at a stock very carefully over the last month and a half, and are quite keen, I'm not absolutely sure yet. I think I'm not going to tell you even what the stock is but we'll wait for it to come back a little and then, perhaps make the investment in it. But it has to be, remember in line with the Warren Buffett way of doing business, which is what is the intrinsic value or what do you believe the intrinsic value is, of that stock? Then only buy in at a comfortable margin of safety, so we do our analysis – we find the intrinsic value, and then we would buy in 20 percent below the intrinsic value, which is all of the acquisitions in this portfolio have gone into that philosophy. Apple, incidentally, after its latest results, is trading at a six times EBITDA ratio, whereas many of the stocks, similar to it, are trading at 20 to 30 times, so I don't know why the market doesn't like Apple. We love it. If we had an even more aggressive portfolio, we would probably be adding to it..There is the thing that matters for South Africans. If you have a look here, down at the bottom, you'll see the exchange rate. On the day we began it was R11.27, is what it would cost you to buy one Dollar. It is now R13.73. That has made a very easy or rather it's given you a strong underlying performance, if you have been investing offshore. The reason we've gone into the United States is that we believe that this is the economy that is best positioned for economic growth in the long term..There's many issues in other parts of the world but the United States has a constitution and it has a system, which employs the most efficient or allows the most efficient application of capital. The most efficient distribution of goods and services. People just can't get in the way. They allow the market to do the real work, and the markets are just so much more efficient than individuals are. Particularly because most individuals who get involved in this kind of thing, don't even start to know what they don't know..You can send through questions to us. They are open. In fact, that's what you're here for Stuart..Yes, Alec. If the guys and ladies can please put the questions on the right hand bar. There's a questions tab – just click open and send it through, and then I'll convey the message to yourself..So you just type the questions in..Pretty simple, all right, so the questions are open. There's the performance of the Rand, we'll show you in just a little while, but it gave us 20 percent from a starting base, so the first idea – the first view was the Rand is going to be weak. Let's get the money offshore. That was the way we started and that's been a very good view, so far. The second view was to put that money into the various stock picks and the overall market. The overall market, as you can see, has gone up slightly – it is now 27 percent of the portfolio. It has given us a 24 percent return, so if you've just taken your Rands and put them into Dollars, you've got about 22. The U.S. market as a whole is two percent up, so you would have had a 24 percent return over that period but look at some of these..Google – 63 percent in Rand. Amazon.com – 129 percent, and then Novo Nordisk – 60 percent. We haven't got a single loser because of the impact of the Rand. Although Apple, Berkshire Hathaway, and IBM are all below where we bought them in, in US Dollars (in Rand terms) we haven't had a loser, so the portfolio annualised, well it's 11 months into the portfolio, it's at 35 percent return in Rands, and 38 percent annualised..Alec, I've got a question from Kobus. He just asked what the return in Dollars is, not the Rand return..The return in Dollars is 12 percent and that you can see from the previous graph, which is (let's just go back). If you were to take all of that together. We'll go into more detail later on, but the return is 12 percent and you then would add 22 percent – it will take you to 34, which is roughly, 34, or 35 – around there. Twelve percent in U.S. Dollars, which is comfortably outperforming the overall market, which is two percent up..Not too many portfolios do that but please remember we're not actually trading. This isn't a one-year punt. These stocks were carefully considered. They were invested in, to be held forever, so even though Amazon has gone up 129 percent, in Rand terms, we're quite happy to stick with it..Another quick question from Benjamin. He says he is 70 years old and wants to know how he joins and what's his minimum investment required..Benjamin, this is a facility that we do in collaboration with Standard Bank. Standard Bank have got a WebTrader service, so if you're a Standard Bank client it's quite simple, I think. Just to open a WebTrader account. In fact, it's very simple to open it. You can put up to a million Rand into the account. It is always your money, and that's without having to ask for Exchange Control approval or anything. Then you can allocate that million Rand in the way that you want to. It's a very user-friendly backend, and congratulations to Standard Bank for actually having come in, to assist in the way that they have to bring the world of investing to everybody in South Africa. It's the same way, as you would use a normal, online trading account. WebTrader just gives you access to international accounts as well..There you can have a look. The Rand profits since inception, or the Rand/Dollar is up 22 percent, so if you've just put your money into Dollars a year ago, from R11.27 to R13.73, you would have made 22 percent, and there are the other performances as well..It does become a little bit more difficult. I see there's Deon Martin – I see the question. What effect has dividends had on the portfolio? Well, there it is Deon. We've had $2 300 receipts in dividends. It's about one percent. It's not exactly a huge return. Remember we started off with $200 thousand to begin with, so dividends have certainly assisted but not in a big way..Interestingly enough we've got quite a nice dividend coming from Apple that will be paid in November. They have just announced another dividend, and they've been putting a lot of money into share buy-backs as well, so a small input from dividends. Okay, moving onto the individual constituents of the portfolio. First up is Vanguard. Vanguard is our preferred S&P 500 route. The S&P 500 is pretty much the market for the United States. What they do is they take the biggest 500 shares, and then they rate them in different ways..The Vanguard Index Fund, which we invest in – VOO, is the index abbreviation. It invests in those funds, and as you can see, it tracks the market just about the correlation is almost 100 percent..The stock market in the United States had had a fantastic month, up by just around about 11 percent in the past month, and that has helped our performance as well..If you go back to this point in time here, late September/early October – the market had taken an awful hiding, if you recall. There was lots of things happening around the world, including the Chinese stock market that had fallen completely out of bed, and that did have impacts. There were some who were panicking about it. We weren't. We were quiet excited at the opportunity and had we had more cash we would certainly have invested there. For those of you who were at the last Webinar in early October, which would have been around this point here, you would have seen that you already bounced off the bottom..In the period since then, the overall market in the United States has now just about, in six months, it's just about level to where it was six months ago. In the year, as a whole, it is up by two percent..A question from Dianne. It's a question on the admin side. If you want to realise your money offshore, when you do eventually sell – she understands that you need an offshore account from which to transfer funds to WebTrader – is this correct? I'm not sure if we can answer that..Dianne, I think that's the question, and we can give that to Stuart from Standard Bank, and to Brett Duncan and let them handle it, so Dianne if you would just drop me an email, alec@biznews.com and I'll send it on to Brett and Stuart, and they will be able to give you the answer to that question..I see there's another one here from Benjamin Pretorius – are you reviewing your portfolio from time to time? .Benjamin, it's important to understand that this portfolio is the purchase period is forever, so what we did, to start off with – was that we had 30 percent invested in the S&P 500 and the balance in our share picked six of them. If we find a share pick that we think is better than the market as a whole, then we do have the facility obviously, to sell part of the 30 percent, or now 27 percent that we have in the S&P 500 Index. Let's just say there was a stock Twitter, as an example, which is another one that I've been looking at. If we think that, the time is right to buy into Twitter, which it isn't right now. It's a little over priced it seems, then we would sell about a third of our holding in the S&P 500 and invest that into Twitter..What this tells you is that we've still got three more stock picks that we can take and at that point in time, if there is then something else that comes up that catches our attention – we would then have to make the very difficult decision to sell one of the existing holdings to replace it. This is not a trading portfolio. This is not a portfolio – we don't go to sleep on it because we review it every month and clearly, I keep on top of what is happening in these companies but every month we would, through that period, be looking for other shares that we can hold forever. We do still have the capacity now for another three potential investments but, as you've seen, a lot of work and a lot of study went into the portfolio before we started off and the only one in fact, that we've added in the year has been Apple..I've just got a question from Paul. He says please correct my thinking if I'm wrong. Money is only made when the share is sold. Will you be selling and taking profit with the weak Rand or will the profit be reliant on the fundamentals of the companies in the portfolio, outperforming the market and selling when they are perceived to be at full value?.I don't know who told you money is only made when shares are sold. That is definitely not. If you want to follow Warren Buffett's way, and remember this is a Warren Buffett portfolio. We believe in the Buffett way. We believe do your research, do your analysis, hold the shares forever. What Buffett recommends people who own Berkshire Hathaway shares, what they should do – he says, if you need to realise, if you need income from your Berkshire Hathaway shareholding then have a look at the period that you need to generate that income in, and then sell shares in Berkshire Hathaway to realise some of that capital. Let's just use this as an argument. You're a 70-year-old. You think you're going to live to 100. You've got 100 thousand Berkshire shares (you should be so lucky – but you know where I'm going with this). Then what you would do is you think you're going to live for 30 years. That means cash in three percent or sell three percent of your shareholding to realise the cash that you might need at that point in time..This idea of you don't make a profit until you sell or you don't make a loss until you sell – is absolute bunk. Investing is not speculating. Speculating is what you do when you buy something, hoping to pass it onto someone else at a higher price. Investing is you become a co-owner in the business and co-owners in businesses that don't distribute dividends can realise their cash, can realise their capital by selling a small percentage of their shareholding to do that when they need to and are in need. I hope that actually helps you, and certainly it's my philosophy and that's the way Buffett looks at it, and he's the greatest investor in the world and the person that I would recommend everybody reads more and more about. In fact, my new book is coming out in January. It will be in a print version. We're going through the editing of it right now. It's a bit late for a Christmas present but I'm sure it's going to help in the New Year..The post-Christmas blues..Yes, help to overcome the post-Christmas blues. Let's look at Berkshire itself. As you can see underperformed in the market, generally. It continues to do so. This is a company that we still haven't got the quarterly results out from Berkshire but what I can tell you was that Buffett bought more shares in IBM. He loves buying shares that are cheap. He doesn't like buying shares that are expensive. The same way you should look at your investments, from a similar philosophy. He has, at the moment showed a loss in his portfolio. The portfolio of Berkshire is about $106 billion at the last count – it started at zero by the way. He's shown a loss there of one-point-seven billion on paper, on IBM but he would never look at that. He would just say, "Yippee, IBM is cheaper. Let me buy more," and that's the strategy and the philosophy that Buffett uses and the one that we should be using too..In fact, we did that with Apple, when Apple dropped to around $110 a share. We decided to buy more. We changed our rules and put an extra eight percent because it was such a great investment and I think it is still very good at the moment..There's a six-month graph. Not that poor performance, relative to the S&P 500 Index but as you can see, it's been a good October, a very good October, even for Berkshire..This is from Denver. Looking at the new age stocks – the Tesla's of the world. Do you see any potential in Elon Musk's Tesla or Biotech stocks? .I don't know anything about Biotech. Denver, I'm sorry I can't help you there. I know there are people who are experts in that field and jumping on the bandwagon. I don't know. That's another thing Buffett teaches us right from the beginning. 'Stay within your circle of competence'. It's outside my circle of competence. I will research and I will try and find out more about it but at the moment, I'm sorry I can't help you there. Elon Musk (Tesla): I'm still looking at it and I'm still researching it. I love the story. I love the fact that he's South African. I love the fact that he's just this amazing entrepreneur and I love the fact that his cars score 103/100 in their research – in the reports of magazines. It's impossible. How do you score 103/100? Well, Tesla have done it. The Tesla story is one, which is just going to get better and better but you've got to find the right entry point. I love the company..The entry point into the shares at the moment is a bit high for my comfort. Remember, what we need to is you get an intrinsic value or at least a view of the intrinsic value and then make sure that you only buy in at a 20 percent or higher discount. There are many great shares on the market, many great companies in the market but if you can't get that margin of safety then you're not protecting it. You don't have that buffer against something that could happen. Even Berkshire Hathaway in one year, dropped by 50 percent. Fifty percent. If you didn't have that margin of safety, even on a wonderful stock like that, you could [in an emergency being forced to sell it] lose money and that's not what we're trying to do here..Moving on to Google (or now called Alphabet). What can we say about this company? We bought into it at a time that it wasn't that popular. In fact, for some months our shareholding in Google was below that of the market as a whole, but now the market loves Google – just absolutely adores it. The latest set of quarterly results that came out saw the shares hitting a new high. It's now also (this is Alphabet. It's called Alphabet Today) structured like Warren Buffett's Berkshire Hathaway. It's now in a position where it's going to start with share buybacks. It's going to be spending $5bn (or has approval to spend $5bn on share buybacks). It just shows you that the model is mature. The money is just pouring in. There's no way that you're going to displace Google with anything we know in the area where it's strong, which is in Search and in online advertising..It's also making some very interesting investments into other spaces like the space that Elon Musk is in with electric cars, although Google is much more on the basis of self-driving cars. The reason why the market loves it is that they appointed Ruth Porritt as the Financial Director. She came from a Wall Street bank and she has applied the disciplines from a Financial Director's perspective that Wall Street loves. Up until the time that Ruth came in, Wall Street was a little dubious about whether Google (or Alphabet, as it's now called) could ever claw back the techies and get them to spend less. Well, she's managed to do that and every time the results have come out since she's been there – it's for the last two quarters – the market has found a reason to push these shares higher. They are at an all-time record at the moment and as you can see in the last six months, they've put on 31 percent as against the market..The NASDAQ, which is up one-point-four percent, Google is one of the market's darlings..David Melville is looking for an allocation in terms of sectors – industrials, financials, and resources because he says it looks very bearish in resources..Sorry David, I'm glad you're joining us here. We're not doing that. We're just not going to do that. To try and read the big picture, you need more expertise than Warren Buffett possesses. He says he just can't read the big picture and the best investors that I've read about in the world such as the late John Templeton who's company is named after him, Phil Fisher and of course, Benjamin Graham…They never went for sectors. They never went for the big picture. This is an invention of business schools. This is a philosophy that maybe, is used by asset management companies to justify why they launch new unit trusts or products into individual sectors. What you need to do when you're investing in shares, is realise two things. 1. You're a co-owner of the company – that's the company you're buying and not a sector. 2. You're buying shares in a company where those people who are managing the assets of that company are able to leverage those assets so that they can grow in excess of the economic growth rate..What you're doing is you're actually buying intellectual capital and you've got to buy cheap because you buy the assets that they're leveraging, so you need good management and good assets in that business, and it has to be in a good sector as well. All of that you will see when you have a look back and see what the track record of that company is and clearly, of the managers too. When you're betting on those managers it's like you're giving money to me. You invest in Biznews. You're giving money to me. I've got to take your money and make sure that I can apply it, that I can allocate that capital more efficiently than for instance, those people in Government. That's a no-brainer maybe for those people in other businesses. I can't give you a sectoral breakdown, David. I'm sorry..Okay, onto Amazon versus NASDAQ. Here's our star performer again..Amazon came out with results. Again, the market went dilly for them and again, it helped our star performer in the portfolio to just keep getting better and better. We love Amazon. We loved it for the reasons that I've tried to articulate a moment ago. You have one of the smartest guys on earth in Jeff Bizos, who runs this company. They are growing the business at an exponential rate. Amazon got past Walmart as a market cap some months ago, and it's just getting stronger and stronger. Last year, Amazon's turnovers were up 20 percent. This year, their sales are going to be up 21 percent, and that's in US Dollars. They had a blowout quarter, a fantastic quarter – I suppose 'blowout' means different things to different people – for the three months to the end of September..Remember, these American companies do come back to us and report every three months. Imagine this for a business: your customers are up 13 percent. What your customers bought…they sold 26 percent more units through Amazon.com and the existing customers bought 11 percent more than they'd done the same time a year before. Operating profit, which the street thought was going to be $40m came in at $406m. If you understand business, it's all about your margins. Gross margins there were up 300 basis points to 33.9 percent. This is a very, very strong business. It's got its market sewn up and where it's really making money now, is somewhere where it has a seven-year start on everybody else in the Cloud. Amazon Web Services has generated 78 percent more revenues in a year than it did the year before..Those revenues are now running at $8bn per year – something like R110bn. This is an incredible business. The traders would say to you, "Gee, you made 129 percent. Cash in. Put the money in the bank." Not on your life. You stick with this baby..Let's go onto the six-month graph. There you can see Amazon's 43 percent growth as against 1.43. It seems to now be really, really, hitting its straps. When you look at the underlying story there, you can see that everything's pointing in the right direction..David Staedtler is looking for shares that aren't in the portfolio. What do you like?.It's irresponsible to even suggest it, David. I must stay within my circle of competence. There's nothing outside the portfolio that I would even hazard a guess with. Remember, you're buying stocks. If you're an investor, what you buy is forever. The only time you sell the shares is when you've got something better to invest in, and then you must make sure that you know that it's a better investment or if the guys who are running the company are crooks. Buffett sold Tesco. He took a $450m knock. He loved Tesco, the big U.K. retailer but when he saw that they crooked the books, he sold. He just dumped it. He said that in a case like that, you've just got to get out. There's nothing at the moment that we would… That's just not the way we operate..Okay, here's IBM. What I can say to you though David, is that there are three stocks in our portfolio that are trading at lower the prices we were prepared by them, in it. In other words, their margin of safety has improved still and those three are IBM, Berkshire Hathaway, and Apple. Of the three, I love Apple the most. Maybe Apple's just so big that people just don't understand how to value it anymore, because it is the most valuable stock in the world. To me, Apple is an absolute standout investment. We'll get onto that in a moment. IBM came through in the quarter again. Here's a typical example of a value share that is out favour with the market because the speculators have not done their homework and understood what is going on at IBM. IBM has a very good, consistent process..They're going to the Cloud in a big way. They're behind [unfortunately for them] Amazon, but they are still up there with Microsoft so they're one of the big investors in the Cloud. They took a decision in the business some years ago, to shift it away from the existing businesses to new (or what they call strategic) areas, which are now about 25 percent of the business already. This means new, fresh areas that will be high-growth areas into the future. They consciously sold off a lot of the old IBM business. Wall Street doesn't like to see sales falling but IBM selling off the antiquated parts of its company so of course, the sales are going to fall. The important thing is that the new areas it's going in – those sales are growing at 30 percent per year. The biggest proponent/supporter of IBM is Warren E Buffett from Berkshire Hathaway in Omaha..He is now the biggest shareholder individually in the company. He keeps acquiring stock. He is sitting on a paper loss of $1.7bn. Buffett paid $169.00 on average for his shares. As you can see, you can get them at $140.00. Do you need more of a suggestion or a recommendation?.I don't. There it is. IBM's trading at $140.00 at the moment. When Amazon and Google come out with the results (because Wall Street absolutely loves them), they move up. As you can see, when IBM comes out with the results, the results recently released had a bit of an uptick but down again thereafter. The desk jockeys on the street don't like this kind of company but you should love it because it is the kind of business that you put away and… Well, we love it and we're going to stick with it in the long term..Moving on to Novo Nordisk. This is one of the most fantastic businesses in the world. I told you a little bit earlier that with Google, there's no way you can get into that. To try and unpack or to beat that business model is something that Warren Buffett and Bill Gates – two of the smartest investors on earth – have tried to do. Bill Gates is the Founder of Microsoft. Buffett said at one of the AGM's in Omaha, "We can't find a hole in their business. We can't find a way to puncture their bubble". As a consequence of that, value investors of the 40,000 people who were in attendance, went out and started buying Google shares and they've done very well out of them. Novo Nordisk is in the same kind of category. Novo Nordisk owns 50 percent of the global Insulin market and with lifestyle disease (people don't listen to Tim Noakes)….Unfortunately. If the world converted to Tim Noakes, maybe that's the time to sell Novo Nordisk but as long as we carry on with Insulin and Diabetes being a major problem, Novo Nordisk's strategy is going to be in the right direction. Their CEO has just won a huge award for being the best sustainable business in the world. I think that was provided by the Harvard Business Review and as you can see, the share price – although it didn't do that great in the last month – is still up by six-and-a-half percent..When you look at it over the last six months, it's outperforming the market and of course, in our portfolio with the Rand kicker it's 50 percent stronger. We love Novo Nordisk. Shall we get onto that last question, Stuart?.It's a statement from Alan saying Apple should buy Amazon and Google..Okay, Alan. Amazon's not for sale. Google's not selling. I'll tell you an interesting story about Google. Between the three holders, because they have a different share structure (they have high voting shares and low voting shares)…between Larry Page, Sergei Bryn, and Eric Schmidt they own 60 percent of the votes so Google/Alphabet isn't for sale..Look at this one. I just love this business..Apple come out with financial results in the quarter. It did help this time around. The results went up but any way you want to look at Apple, everything is going in the right direction. Maybe what the street is worried about is that perhaps, they don't believe that Apple can continue to achieve or deliver what it has been delivering. In the year-to-September (the three months to September quarter) – the final quarter – this company generated a growth in it's bottom-line of 30 percent..It's just going in the right direction. Revenues were up 28 percent. It sold 231-million iPhones as against 169-million the year before. You cannot get an iPhone 6S Plus. You can't get them anywhere at the moment, unless you're on a long waiting list. The App store, which is part of the whole ecosystem that the great entrepreneur Steve Jobs understood and put together, is hitting new records. The Apple Watch has now been exceeding expectations of the people internally. Their revenues in China were double year-on-year. This is a company that's on a rip..The only thing that isn't on a rip is the share price and as you can see, in the past six months Apple has underperformed the NASDAQ Index. It's down by seven-and-a-quarter percent in the past six months, whereas NASDAQ is up by one-and-a-half percent. They bought back 330,000 shares ($35bn) in the past year so they've given back to shareholders – $35bn through share buybacks this year and $45bn last year. They're continuing to buy shares when the shares are cheap, which they are at the moment and that is one way (in addition to dividend payment) that Apple is giving its shareholders part of the incredible success story that its achieved. Why doesn't the market like Apple? Why do they not give Apple a better rating than many of the other companies in a similar sector? Maybe they don't believe the story. Maybe they believe that Apple's going ex-growth. Maybe they believe or don't actually understand exponentiality and the network effect – two of the big, big stories for new economy companies..If you get that…if you get the network effect (in other words, the more people you've got in your ecosystem, the more people you revolve around each other)… As with Amazon.com, they have all the customers now. The customers are being given other options. They've grown the customer basket 11 percent in the past three months because of those options and because of the network effect. Amazon's a great example of it. Apple's another great example of it. Google's another example of it as is IBM. Remember, IBM supplies into virtually all of the Fortune 500 companies. They are customers. What it's now doing is it's taking those customers and helping them to go into the new economy. The network effect. If there's one way that exemplifies this portfolio, it is the network effect and that's what you have to understand, to realise why some of these shares are forming the way that they are..Well, I hope that you've enjoyed the discussion today. Thank you for all the questions. I also appreciate the feedback. Thanks. There are quite a few guys who've thanked us for it and for the response. To overlay, again, the situation that we're at in this portfolio: we've been helped a great deal by the Rand but that was a conscious decision to go offshore rather than to stay on-shore. It's something that I believe you need to continue going with. The other thing is if you look at the various constituents of the portfolio, remember we've bought them all forever. We're not wanting to sell these shares. At some point in time, it could be a situation where we find something better and then we will swop some of them, but we're not going to sell Amazon even though it's our best performer. Where we will be changing perhaps, would be when we find the new investment. We would sell part of the overall Index Fund and allocate part of that resource into it. Even with the Index Fund, thanks to the Rand, that's up 24 percent. Next month, we will be coming back to you on a similar day..Yes, a similar time..Right at the end of November and then the portfolio would have been in place for one year. Thank you everybody for sacrificing. Paul, I see you said "Thanks for a great presentation –worth sacrificing your time for". Hopefully, it wasn't too much of a sacrifice. We appreciate the investment of your time and we look forward to being back in your company again. Remember, we do cover all of the portfolio to a large degree as we go through Biznews every day. We're up early. Stuart and I are finding the great stories to do with this portfolio and how the performance is. Keep visiting us on Biznews.com and we'll keep supporting you in every way we can. Thanks again. We look forward to being back with you next month..Thanks and cheers, Alec.

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