US, SA market turmoil - Rational perspectives from Piet, Sean on how to not just survive, but thrive

Solid records of consistent outperformance in difficult times add credibility to insights on the current turmoil shared here by Re:CM founder Piet Viljoen and Sean Peche, his counterpart at Ranmore. Both delivered star turns at the BNC#7 conference in Hermanus a month ago. In this interview with BizNews editor Alec Hogg, they provide dollops of common sense to guide fretting stock market investors..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here:.Listen here:.BizNews Reporter.It’s been a bruising few weeks for equity investors. Market volatility, geopolitical noise, and rising interest rates have pushed even seasoned investors to the edge. But amid this turbulence, two investment veterans—Sean Peche of Ranmore Fund Management and Piet Viljoen of RECM—are urging calm, clarity, and a hard look at valuation..Their message, delivered in a conversation moderated by Alec Hogg, is simple: in a world gone mad, rational investing may lead you straight to South African assets..A global shake-up.The Five-Year Investment Challenge between Magnus Heystek and Piet Viljoen has turned into a closer contest than anyone anticipated. Once trailing significantly, Magnus’s offshore-heavy portfolio—recently boosted by an allocation to Peche’s Ranmore Global Equity Fund—is now neck-and-neck with Viljoen’s domestic-heavy selection. As Alec Hogg pointed out, Magnus is "full of beans" as the offshore bet gains traction..Read more: BN Briefing – Mbeki, Zille on Big Business prodding GNU unity; What SA should do about Trump Tariffs.Peche, who’s long expressed caution over the United States, argues that the chaos unleashed by Donald Trump’s return to the presidency is not only reshaping markets, but upending decades-old assumptions..“This is a change in world order,” says Peche. “Normally in a crisis, the dollar strengthens. But this time, the euro and the yen have gained. ETF flows suggest investors aren't panicking yet—but they should be diversified.”.The case for South Africa.Viljoen is sticking to his guns. He hasn't changed a thing in three years, having parked the entire R500,000 portfolio in the Merchant West Value Fund. And despite the recent pressure on South African banks and equities, he believes the fundamentals still favour local assets..“We’re seeing a global return to home bias,” Viljoen explains. “Tariffs, capital controls, and government interventions will drive capital back into domestic markets. The U.S. is 70% of the MSCI World Index, which is completely disproportionate. South Africa, by contrast, is massively underweight and deeply undervalued.”.Viljoen highlights banks like ABSA trading on a price-to-earnings (P/E) ratio of just five, equivalent to a 20% earnings yield. That, he insists, is “a wonderful proposition” in a world where U.S. tech stocks are trading at 60 times earnings..“Cheap assets over the long term will outperform,” he says. “Even if South African politics feels chaotic, we have real debates about fiscal matters. That’s more than can be said for the U.S. or the U.K.”.Trump, tariffs, and a broken America.The conversation quickly shifts to the real elephant in the global room: Trump 2.0..Peche outlines the macro implications. “He’s alienating bond-holding countries like Japan and Canada, who are now seeing diminished returns and currency losses. The dollar is weakening when it should be strengthening, and foreign capital is slowly retreating from U.S. treasuries.”.Read more: ANC’s shocking stance: Call to cut ties with France threatens South Africa’s economic growth.Viljoen concurs, explaining how the U.S. has essentially “vendor-financed” its consumer boom by issuing bonds to the world at low interest rates. With debt-to-GDP ratios at alarming levels, the only way forward is higher interest rates—bad news for equities, especially the overvalued American kind..“Higher U.S. interest rates will depress valuations,” he warns. “And if 70% of the world index faces a headwind, where will the capital go? Into under-owned, under-valued places like South Africa.”.What Investors should do now.Both Viljoen and Peche agree: don’t panic—but don’t sit idle either..“Diversify properly,” Peche advises. “Owning Amazon, Apple, Microsoft, and Tesla is not diversified. Value stocks, especially those trading on five to seven times earnings, are a better bet. Keep some cash handy to pounce on bargains. And remember Buffett’s advice: be greedy when others are fearful.”.Viljoen adds that South Africa offers opportunities not only in banks but in cash-generative companies like Naspers and British American Tobacco. “China is the future, the U.S. is the past,” he quips, pointing to Tencent’s dominance in the MSCI China Index as an indirect exposure that can be accessed through Naspers..He also offers a warning: “There’s no free lunch. Every asset carries risk. But if you’re getting a 20% earnings yield or 12% bond yield while inflation is at 3%, you’re being paid to take that risk. That’s the key.”.A time to be smart.As Alec Hogg rightly summarised, “This is a historic moment. The world is changing—much like it did during COVID. If you’re not positioned correctly, you could get badly hurt.”.Whether you agree with their outlook or not, the insights from Viljoen and Peche provide a compelling counter-narrative to the herd mentality that’s gripped global investors. The U.S. is no longer the no-brainer it once was. Europe is unsteady. China is playing the long game. And South Africa, battered and noisy as it may be, could be one of the few places where rational, value-driven investing still has room to thrive..As the BizNews tribe gears up for the second Business Investment Conference in Hermanus this September, one thing is clear: the safe bet may no longer be where the crowd is running—but where the value lies hidden, often in plain sight..Read also:.FT: Peter Navarro – Why Trump’s tariff plan will fix the broken system of international tradeJoshua Meservey in Washington: What SA must do urgently to transform the USA from Foe to FriendDA divided over staying in South Africa’s coalition – Bloomberg

US, SA market turmoil - Rational perspectives from Piet, Sean on how to not just survive, but thrive

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