Jesse Livermore once said that “a bull market climbs a wall of worry”. Globally, it couldn’t be more appropriate when considering what transpired this past year. Despite the exorbitant amount of worry about the fallout of the trade dispute between the US and China, Brexit, slowing global, and particularly Chinese and European economic growth, global markets have been strong, and the US has kept reaching new highs.
In fact, every major US index closed at a record high the day before Thanksgiving on 28 November, which also marked 125 months of economic expansion, the longest in history. Interestingly, it also marked 109 consecutive months of jobs growth, the highest-ever home prices and a period in history during which we saw the most accommodative monetary policy imaginable.
Nonetheless, people are becoming increasingly vocal about the global economy slowing down and the inevitable recession just around the corner. Yet, the market keeps climbing the wall of worry. Jesse Livermore was one of the greatest traders to have ever lived, by the way.
South Africa has not been so lucky, though. The market has made very little progress over the past year, even though most global markets have all fared very well. We are plagued by corruption, alarmingly high unemployment, a lacklustre economic performance, state-owned enterprises that drain the fiscus and a laundry list of other issues. On the bright side, things are starting to look slightly better for us.
Yes, the headlines around SAA are disheartening, although for the first time it feels like the government is dealing with issues instead of just throwing money at the problem, hoping it will go away. The same can be said for Eskom. This is a refreshing change.
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