Arthur Buchner: BOE


BROADCAST TRANSCRIPT: Time now to talk about single-stock futures. Arthur Buchner of BoE Securities is with us. Just to let you know that today we took a view. Remember, the Moneyweb portfolio that is sponsored by the JSE and BoE Securities has given us the opportunity to play with some money. All profits that are made from it go to the Noah operation, which looks after Aids orphans. And today we closed out our BHP Billiton short position. Arthur, we took a view that the market reacted a little bit too aggressively to the resignation of Brian Gilbertson. Do you think we are being premature here?

ARTHUR BUCHNER: No, I think it’s actually a very good move. If you look at any trading books, reminiscence of a stock operator, market wizards, all those great traders will say to you if something happens, you are on the right side of a position, but it’s something you didn’t expect, nine times out of ten the best thing to do is take your profit on it.

MONEYWEB: And if a windfall gain here, let’s cash in?

ARTHUR BUCHNER: Correct, because it’s not going down for the reason that you sold it. It’s actually almost a lucky escape, and therefore you should take your profit on it. Because those short-term developments normally right themselves out within a week or two.

MONEYWEB: We also decided today to buy into Anglo Platinum. If that’s something that you are questioning, or that experts might be questioning, the reason there is that the platinum shares have horribly underperformed the rand price of platinum for the last six months.

ARTHUR BUCHNER: I think Amplats is a fantastic buy. The reason that I say that is that it has first of all underperformed Implats, purely on the fact that they’ve had all these expansion plans. And if you are taking a look a little bit longer into the distance, it’s a good buy. At R316, there was a huge amount of buyers. If there are any people that are still in that stock that are weak hands, I would be very surprised. The guys that are still long of Amplats, those are guys that have held on to it. And even with the rand, which has been strong over the last three weeks, it hasn’t fallen. And that’s a great buy.

MONEYWEB: That’s the good news. The bad news is that we are showing a technical paper loss on Anglo American. I’m quite happy with that, because the strong interest in platinum and gold should come right. But Nampak’s the one that worries me. It’s bouncing up and down and today it went down quite badly.

ARTHUR BUCHNER: Yes, I’m not quite sure of it, but we did discuss it last at their results. And South Africa has an amazing ability not to help shares that have done well. They almost say, well they can’t do well any more, and I think it’s just a couple of the weak hands getting out of Nampak – and it is driven really by thin volumes. It moves up 50c on a day on a R14 stock. That’s a big move, and then it moves down 50c again. I think hold on to the Nampaks. The Anglos I think are good, hold on to those, because I think the rand may have bottomed or stabilised around here and you might see some negativity on the rand for the next two or three months.

MONEYWEB: So we are well positioned for the Aids orphans?

ARTHUR BUCHNER: I think we’re looking good and the portfolio is slightly in the money at the moment, anyway.

MONEYWEB: Arthur Buchner is from BoE Securities. David Shapiro has just pointed out to us that Nampak was ex-dividend. So if you also hold the Nampak shares, don’t worry – that 40c decline today was largely a technical issue.

Posted in Market commentary

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