Can AI Value Stocks? Local | Yields at decade Lows

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Worldwide Markets - Episode 666 📊

🇿🇦 South African Economic Indicators

Unemployment hits 5-year low - but still a tragic 31.4%
The Achilles heel: Need GDP growth to break below 20%
10-year bond yields at decade lows - 7.97% (down from 11% during load shedding)
Government saving on new bond issuances, though impact is modest
Potential budget windfall from precious metals next week

ZA 10-year yield | weekly

🤖 AI Valuations: Testing Anthropic's Opus 4.6

Can AI do DCF valuations? Testing on Dell (NYSE: DELL)
Opus 4.6 created detailed discounted cash flow model in ~10 minutes
148 formulas, zero errors (after self-correction)
Fair value estimate: $172 vs current ~$115 (significant upside potential)
⚠️ Important caveats: Sensitivity assumptions critical (WACC, terminal growth, risk-free rate)
DCF is just ONE valuation methodology
Rate limiting kicks in with heavy usage ($20/month tier)
US stocks work better than local stocks currently

💼 US Economy Update

Strong fundamentals emerging:
- $600B+ capex spend by hyperscalers (Alphabet, Meta, Microsoft)
- Better-than-expected January CPI
- Unemployment at 4.3% (jobs report revised down 1M though)
- GDP tracking closer to 3% than 1-1.5%
Two rate cuts still on the table for 2025
Tech infrastructure spending providing economic underpin

🚚 The Karaoke Company Logistics Disruption (?)

Algorhythm stock chaos: Up 222% Friday, another 15% pre-market Tuesday
From karaoke company to AI logistics software ("SemiCab") in 6 months
Entire logistics sector sold off on the news
Reality check needed: Santova and others already doing this with Oscar software
Market overreaction? Small operators still use fax machines
Don't panic-short established players like Santova

📅 Upcoming Events

Power Hour Thursday 5:30pm - Tax efficiency & ETF revolution (Standard Bank Rosebank or webcast)
ETF database updated with FNB, 10X, 1nnvest, Satrix funds
Budget next Wednesday - Simon will be in Cape Town

Powered by Standard Bank Global Markets, Retail and Shyft

"Look after yourself. If you can look after somebody else as well." 💚

Simon Brown

* I hold ungeared positions.

All charts by KoyFin | Get 10% off your order

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