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APC 2016 Weekly Update – Part 3

BUSINESS NEWS – FALLING COMMODITY PRICES

Commodity prices have come crashing down. These are the one-year returns of some commodities, as at the end of February 2016:

Natural Gas Down 39%
Brent Crude Oil Down 38%
Copper Down 19%
Platinum Down 18%

 

South Africa is not as dependent on commodity prices as it was in the past, but still you see the likes of Anglo American stating that they are disposing of 70% of their assets. Times are tough. The main driver is that China is slowing its consumption of these materials, just as extra supply has come on-stream.

A fascinating case is that of Brent Crude Oil. A little bit of reading here will reveal the massive impact of fracking (much more oil is getting produced), to which OPEC responded by doing nothing (when really they should have cut production to boost the oil price). Then there is the wildcard element of Iran re-entering the oil market as sanctions are lifted and their 800 000 barrels per day (second only to Saudi Arabia) is released.

If the Rand starts strengthening, then we will finally see the win of lower petrol prices!

INTERESTING BOOK

The Talent Code by Daniel Coyle

The author travels around the world to find centres of excellence. Places which have consistently produced outstanding athletes – and what he learns are the 3 ingredients, that together combined, develop talent. All writers of the APC in 2016 are Knowledge Athletes and all 3 ingredients explored in this book are applicable – and they will be the focus of our first lecture next week – so I will stop here for now!

INTERESTING PODCAST

One of my favourite podcasts is called Planet Money. Here are 3 great episodes to get you started:

DECEMBER 23, 2015 #671: An Insider Trader Tells All

Today on the show: A man who got caught insider trading explains everything – what he did, how he did it, and why. Though he’s still struggling with that last one. (This was the Audit Partner for Herbalife and Skechers.)

DECEMBER 2, 2015 #216: How Four Drinking Buddies Saved Brazil

Two decades ago, shoppers in Brazil would run ahead of the worker who raised prices every day. Inflation was crazy. Today on the show: How four economists – who were also drinking buddies – fixed it.

NOVEMBER 18, 2015 #416: Why The Price Of Coke Didn’t Change For 70 Years

Prices go up and down. But for 70 years, the price of a bottle of Coca-Cola stayed a nickel. On today’s show, we find out why. The answer includes a half a million vending machines and a 7.5 cent coin.

CONCLUSION

With the results being delayed, the good news is that you can register for our APC Professional Programme, attend our first lecture and then de-register if the results released on 18 March are not what you expected. Why not explore this option by registering over the weekend?

See you in lectures next week!

Paul