Maybe I'm just a spoilsport, but watching the Dow rise above 9000 points STILL doesn't get my all that excited...

Ok I'll be the first to admit that it was a bit more pleasant to actually some green in my portfolio today, but like I said - I'm not all that certain that the rebound has the legs that traders think it does...

Tribune Co., publisher of the Chicago Tribune and Los Angeles Times, sought bankruptcy court protection from creditors and the New York Times may have to mortgage its Manhattan headquarters as a major debt repayment looms.

In between that a couple of smaller hedge funds went belly up and of course we have the impact of job losses both in SA and abroad...

I suppose one "bright" spark is that the Big 3 auto firms look like they're getting their chunk of the bailout money although what good it will do is beyond me...

PLEASE can somebody explain to me how this is why share prices could be justified at being at the bottom?!

Couple of topics I wanted to touch on this evening.

1. Zim endgame
What happens in Zim has enormous social ramifications for us - no matter how our leadership tries to dress it up. My personal opinion - Zim is hitting rock bottom now. Cholera is likely to spread rapidly and it is unfortunately going to be a major social problem, but unfortunately its the only way that Mad Bob is going to be replaced.

In amongst the chaos, there might just be some opportunities to start positioning assets?

2. Empowerment plays
A while back I blogged about the empowerment plays in South Africa. Many of the weakly capitalised empowerment groups are starting to take some serious pain around their investments.

However the two empowerment heavyweights who may just flourish in an environment like this are Brimstone (BRT) and the Mvelaphanda Group (MVG) which I currently have in my portfolio.

For the first time in a while these well capitalised businesses can get in when assets values are weaker and take some meaningful stakes of distressed businesses. This is part of the reason that I have them in my portfolio at the moment.

I think they are made for a situation like this.

Conclusion:
As I said - I don't particularly buy this rally and still think that there is some sideways and downward movement to come.

There is still a lot of change left in the global corporate landscape and it is going to be intriguing to watch.

Carnage continued

But I don't understand - the fund managers promised us we were "near the bottom" and South Africa was insulated from the rest of the world.

They told us Gordon Brown was a HERO who had saved us from financial armageddon. Everytime he came on to TV I heard Tina Turner blaring out the Mad Max soundtrack.

I don't understand what went wrong....

Ok that was me taking the piss because its Friday.

Some pretty spectacular stuff yesterday. Gold index lost another 5.6% and we now have the platinum price within 100 dollars of the gold price and both are continuing to head south... So much for the "safe haven" theory for now.

Currencies are all over the show and problems in Argentina, Russia and other emerging markets is proving to be a bigger problem than most people expected.

The All Share index dropped below 20 000 points for the first time in a long while and if you're trying to pick a bottom to this then you're a braver man or woman than I am.... Ever tried to catch a falling piano??

Here's a hint - D O N T

That DBXJP X-Tracker has held up nicely actually moving ahead of where I bought it. That I suspect is largely a function of currency moves but I'll take the security its provided.

For the rest things look a little messy and the deluge of selling pressure doesn't seem to want to let up.

I'm pretty sure there are pockets of value out there. Things that look good to me include Standard Bank, Absa, Tiger Brands, Pioneer and PikWik. They're all pretty defensive, even if the banks do take some pain the next few weeks.

I also quite like the Mvelephanda Group (MVG) story. They're a nice diversified group and yet the share price has also been under a lot of pressure now. I bought MVG at around R5.60 and its now sitting at R4.90 (after paying out a dividend and special divvie). I think there is value in this story.

But if you are buying short term and you expecting the market to stage a big turnaround then like I said - go and stand underneath Ponte and have a mate drop a piano toward you - if you can catch it then we MIGHT have hit the bottom...

Empowerment Foursome

It has been an interesting week for my 'empowerment foursome"

Mvelaphanda Group
As per my last post, I got my paws on some Mvelaphanda Group (MVG) shares. My initial bid was a cheeky R5.95 but when it became apparent that it wasn't dropping below R6 I was happy to pay the R6.30.

The motivating factors for buying this company were:

A) The special dividend coming up in the middle of the month
B) The quality assets they seem to have under them that are being discounted by the market. You seem to be getting a lot of future earnings for next to nothing.

One of the things I like about the MVG story is that the general perception in the market, is that they don't think of themselves as an 'empowerment company'. They view themselves as an industrial company that happens to have a large black representation.

Personal opinion - over the next 10 years, this is going to become a serious player in the South African industrial segment off its own bat.

Sekunjalo
Intriguing things happening at Sekunjalo this week.

The company announced that they had gone into negotiations and the share price leapt up from 61c - 68c.

A nice bit of volume as well and no announcement that there were some director dealings so maybe it is not Surve buying shares.

According to website www.sharetips.co.za, there is a good chance that SKJ is going to be delisted in a management buyout by Surve.

I'm less convinced and think its an acquisition but nothing seems immediately obvious.

But I admit that I will be very irritated if this is a management buyout and delisting.

Brimstone
Investors seem to be recognising that there might be some disconnect between Brimstone's share price and the underlying operations.

The company is on a VERY undemanding price to earnings ratio.

The shareprice has jumped nearly a Rand (20% this week), admittedly on relatively thin volume. Even after this jump the share is still trading on a PE ratio of under 3 times earnings... must be money for jam.

Vunani
The company went under cautionary on Thursday afternoon. 24 hours later, Peregrine (of which Vunani holds 15%) also went under cautionary as it was announced that CEO Sean Melnick and management partners are planning to delist the business in a management buyout.

As a shareholder in Peregrine, I can't say I'm happy.

But Vunani has been doing some nice things since listing and the share price doesn't really reflect it.

The share is illiquid at the moment and there are some minor operational issues which need to be smoothed out.

But barring a huge disaster, I don't think this is a bad story. If they can retain their Peregrine exposure then they should do nicely over the next few years and re-rate appropriately.