Employee Share Options became popular during the tech boom of the last millenium. They were used before, but the explosion across more companies, across more levels of employees and as an expected part of executive remuneration was a product of the Silicon Valley boom. There are pros and cons for share options. Used correctly, they…
Was watching CNN last week, and heard that at least one major US airline, South West, has been making significant use of hedging to manage their fuel costs. Many other US airlines have not been hedging significantly. Another article mentioned that Lufthansa hedged around 83% of their fuel requirements for this year. Air France-KLM hedged…
GDP growth below expectations and Standard Bank is likely to miss it’s already previously downwards revised earnings target. We can’t forecast. Our biases, overconfidence, wild anchoring on anything out there, herding instincts so as not to be wrong and obvious about and general inability to understand how little we know about the future are clear. So if we can’t forecast, and so many of our decisions depend on knowing the future, who are we kididng?
Nationwide Airlines is on the ground. A series of business and operational problems met the global economy of skyrocketing avgas prices and left them insolvent by R172m (assets of R46m less liabilities of R218m). They’ve also left friends of mine stranded in South Africa after a trip from Ireland for another friend’s wedding (congratulations Kay and…
The South African Reserve Bank increased the Repurchase Rate today by 50 basis points. As usual, all the talking heads are out explaining why this was exactly the right thing, exactly the wrong thing, exactly the right thing for the wrong reason and several other combinations. Historical levels of Repo updated graphs – Short memory…
Jérôme Kerviel, a 31 year-old banker at Soc Gen is blamed for losses of €4.9 billion incurred through rogue trades spanning over a period of some months. The story has a remarkable similarity to Nick Leeson, the Original Rogue Trader who is blamed for the demise of Barings Bank in 1995. Unfortunately for Soc Gen,…
I was reading the recent news about ICBC’s large investment in Standard Bank and had a thought. If Standard Bank’s shares are suspended from trading, why not plunge into Satrix Fini? If you really wanted to get fancy, you could probably find SSFs on most of the other large players within the Satrix Fini (a…
Amongst the stormy seas of markets recently (off the back of a credit and liquidity crunch apparently initiated by ongoing and deepening problems with sub-prime loans in the US and the related CDOs), bobs the grey and bloated bodies of a clichéd failure. Unwavering belief in trends, normal market conditions and trading rules developed out…
