Market Commentary: (Don't) Sell In May And Go Away

Market Commentary: (Don't) Sell In May And Go Away

Stocks on the JSE got off to a strong start to the trading week, continuing to move higher from last week’s close and taking it’s cue from global equities which are ticking higher following last week’s US Jobs report. For now, it also seems that the old market adage of “Sell In May and Go Away” is not applicable to the 2018 financial year. Perhaps there is a lesson in that we as investors should not allow market lingo and popular phrases to scare us out of our ownership of stocks which over the long run should provide capital growth and dividend income providing the business continues to grow and management strives to create long term value for all stakeholders.

This past weekend legendary investor and businessman Warren Buffett’s company Berkshire Hathaway held it’s annual shareholder meeting in Omaha, Nebraksa. The meeting is a gathering where shareholders are able to hear firsthand the knowledge distilled by Mr Buffett and Vice Chairman, Charlie Munger.

Investors who were able to recognize the opportunity in Berkshire Hathaway early on have become immensely wealthy by just sitting on their holdings and allowing it to compound year after year.

Yes, there are times when stocks should be sold, perhaps due to valuation concerns as well as when a stock becomes a “trading/technical sell”, whereas some companies (and there are very few of them sadly) should be in a portfolio over the ultra long term to achieve the maximum benefit of management’s astute capital allocation skills, which should ultimately lead to revenue growth, profit growth, share price appreciation and streams of yearly dividend income. Here’s a thought: Imagine if the shareholders of Berkshire Hathaway, PSG, Remgro, Shoprite, Clicks, Naspers, British American Tobacco or Mr Price Sold in May and Went AwayWhy not buy some more and enjoy the rewards?

Market Scorecard:

JSE All Share Index +0.40%
JSE Top 40 +0.54%
Financial 15 +0.72%
Industrial 25 +0.35%
Resource 10 +0.56%

In currencies, the South African Rand trades as follows:

USDZAR +0.22% to 12.55
GBPZAR +0.16% to 17.01
EURZAR +0.03% to 14.96

Gold trades at $1312, Platinum at $910 while Brent Crude Oil is at $75.41.

International Markets

This morning, Asian equities are as follows:

Nikkei 225 (+0.19%)
Hang Seng (+1.19%)
Shanghai Composite (+0.91%)

Latam Markets closed as follows:

Merval 25 (-3.22%)
Bovespa (-0.49%)
INMEX (-1.18%)

Aus miners:
BHP Bil (-0.44%)
Rio Tinto (-0.59%)
S32 (-0.65%)

FANGs:
Facebook (+0.77%)
Amazon (+1.21%)
Netflix (+1.93%)
Google (+0.80%)

FTSE Miners:

Anglo American plc (+1.12%)
BHP Billiton plc (+2.79%)
Glencore plc (+0.20%)

Alibaba closed higher by 3.42%, while Tencent is higher by 2.53% in afternoon trade in Hong Kong.

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