Cannon Asset Managers: Making cents of crazy stupid love
Compiled by Samantha Pauwels & Rynel Moodley
| Highlights The nation of South Africa gathered to watch our President, Jacob Zuma, deliver his state of the nation address last night. As expected, there was no lack of drama as the Economic Freedom Fighters' (EFF's) MPs were forcefully removed from the National Assembly and the Democratic Alliance (DA) staged a walkout shortly thereafter. Subsequently, the speech commenced, focussing predominantly on the energy crisis that currently cripples the economy. The South African rand fell to its weakest level against the dollar in 13 years ahead of the President's speech, coupled with the Greek and German showdown that is weakening investor appetite for risky assets.Wall Street continues to rise, helped by Apple as it became the first U.S. company worth more than $700 billion! Finance ministers and central bankers met this week in Turkey for the Group of 20 (G-20) meeting. The Group is faced with a two-speed growth challenge, pushing for structural reform in areas such as trade, education, health, labour and product markets, as well as creating efficient infrastructure. |
| Graph of the Week: Crazy Stupid LoveHow much do Americans love playing the lottery? More than they love music, movies, books, video games and sports teams – combined. Last year Americans spent a total of $70.2 billion on lottery tickets – topping $62.7 billion spent on all other different forms of leisure and entertainment as per the adjacent graph. This shocking figure is exaggerated by the scary statistic that 1 in 4 Americans have saved nothing at all. Furthermore, more than half of American households have less than one month of income available in readily accessible savings to use in case of an emergency. |
| Source: Recording Industry Association of America, Box Office Mojo, NPD, Publishers Weekly, PricewaterhouseCoopers, Graphic: CNNMoney |
| "THERE ARE MANY HARSH LESSONS TO BE LEARNED FROM THE GAMBLING EXPERIENCE, BUT THE HARDEST ONE OF ALL IS THE DIFFERENCE BETWEEN HAVING FUN AND BEING SMART"~ Hunter S. Thompson |
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Quote of the Week
"The hard part is discipline, patience, and judgment. Investors need discipline to avoid the many unattractive pitches that are thrown, patience to wait for the right pitch, and judgment to know when it is time to swing."
~ Seth Klarman
Did you know?
Rather than reducing indebtedness, all major economies today have higher levels of borrowings relative to GDP than they did in 2007. Since the Great Depression, global debt has increased by $57trillion, raising the debt to GDP ratio by 17 percentage points and overtaking world GDP growth. This poses risks to financial stability and threatens global economic growth.
THE COMPOUND ANNUAL GROWTH RATE IN THE GLOBAL STOCK OF OUTSTANDING DEBT FROM 2007-2014 IS AS FOLLOWS:
| Total: 5.3% | Government: 9.3% | Corporate: 5.9% | Financial: 2.9% | Household: 2.8% |
The McKinsey report pinpoints three areas of emerging risk: the rise of government debt, the continued rise in household debt and the quadrupling of China's debt since 2007.
Source: McKinsey&Company
Cannon Media
Cannon's Head of Business Development, Andrew Newell chatted to Business Day TV about his stock pick Adcorp Holdings. Click here to find out more: http://www.businessdaytv.co.za/shows/stockpick/2015/01/27/adcorp
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