A DE­BAT­ABLE MOVE

Finweek English Edition - - INVESTMENT -

A bunch of mixed con­struc­tion re­sults have been hit­ting the JSE Sens with most lo­cal com­pa­nies mov­ing into the rest of Africa or Aus­tralia to cover for stressed lo­cal op­er­a­tions. Aus­tralia, how­ever, wor­ries me. It is a re­source­based econ­omy and is no longer f ly­ing as it once was when com­modi­ties were boom­ing, leav­ing many of these con­struc­tion com­pa­nies well en­trenched, but in a mar­ket that now looks very sim­i­lar to South Africa. Con­struc­tion re­mains a sec­tor that I am stay­ing away from and the cycli­cal na­ture of the sec­tor is such that I never want to in­vest in it. Sure, there will be an­other boom in the share prices but the first ques­tion that we need to be ask­ing is when ex­actly will this be. The sec­ond is, will we man­age to exit at the right time?

I have no idea when this will be and we, more than likely, won’t exit at the right time.

Hence I am stay­ing away.

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