Trevor Manuel not going for top IMF post

Minister in the Presidency and head of the National Planning Commission, Trevor Manuel, says he is not in the running for the MD position at the International Monetary Fund. No economic qualifications Oversaw popular decreases in taxes and increase in social handouts but did nothing for infrastructure, competitiveness or efficiency of our country Oversaw the […]

This is not (only) why bitcoins are a bad idea

The USD value of bitcoins decreased by 30% in one day on Friday. This isn’t the only problem with bitcoins, but it is a natural result of not having a central bank / government behind the currency saying “we are committing to this currency and requiring it to be accepted as legal tender”. There are […]

Pension funds don’t have enough junk

Junk Bonds are debt instruments issued by corporates that have relatively low credit ratings. ¬†They pay interest at high rates as a result. Typically viewed as risky investments, the junk bonds boom of the 80s showed that there is more to junk than just a risky investment. Locally, our pension funds and other retirement savings […]

Implied Pension Return Assumptions and the Equity Risk Premium

When companies value pension obligations and required contribution rates, they make assumptions about the expected future investment returns. (Accounting standards require market-based rates reflecting fixed interest returns, but that’s a separate point). So what assumptions are pension funds making? The WSJ has an interesting article showing that the average US pension fund is assuming future […]

Clear, Simple and Wrong

The reason opinions are so cheap is that everyone has one and nobody wants to buy anyone else’s. I’m no different. I’m not going to try to sell you mine. I would like to present you with some ideas to think about before you overpay for someone else’s though. Jon commented on a recent post […]

Junk bonds in place of an IPO

The 30 second intro to Junk Bonds Junk Bonds, also known as High Yield Bonds, are debt instruments issued by companies with poor credit ratings, or are the debt instruments of companies that were issued as high quality bonds from strong companies that have since fallen on hard times (“Fallen Angels”). Typically these are any […]

Risk, liquidity and the triumph of economics over alchemy

Sharemax appears to be spiralling to its doom. Multiple stories today report that they are late on dividend payments to investors and may not be able to pay dividends in the forseeable future. Cash has run out. The overvalued, over-geared properties cannot support the income stream that was demanded from them. No surprises here then. […]