Going farming

It is damn tricky to make any money trading in this environment so I guess sticking to simple strategies is probably the best way to try and accumulate wealth while the world is tumbling around you.

Somebody asked me the other day why I am buying equities in a market that continues falling.

That's easy

1. Nobody can pick the bottom to the cycle. We've seen huge sell-offs and maybe we will see more losses but I think that we're getting to a point where some of the good SA businesses are starting to offer some value.

2. I am young enough that I need some kind of long term nest-egg and forced savings method to ensure I'm not blowing what I have grown. If I depend on monthly salary cheques or income from my businesses and I blow all of that, then in reality I am going backwards. By sticking some money into quality, income generating stocks trading well below their NAV I am creating a type of forced savings to carry me through that I won't be tempted to dip into.

Good old Jim Rogers was on Bloomberg yesterday and he said that he reckons it will be the farmers driving the Lamborghini's in the coming years and that kind of ties in with some of my thinking that farming and agriculture are going to be great places to invest over the next few years. I've got a few shares in Zeder - who announced a pretty interesting deal yesterday with KWV - and I'm planning to add to the Pioneer Food Group shares in my portfolio as well as look at adding Crookes Brothers as well.

Otherwise, selling pressure remains constant in the US and the Nikkei bounced off intra-day lows.

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...