Since mining companies do not control commodity prices, they forecast demand to drive decisions on production and capital investment. As no communication occurs between the various players globally, mining companies fall prey to the strongest form of game theory; they all do the same things

In January this year, cyclical companies assumed market leadership from high quality companies.  Yet our portfolio kept up admirably with this regime until June.  Since then, resource equities have put on a spectacular show of pace.  As these companies do not lend themselves to quality,

At First Avenue, we focus extensively on the ability of a company to build, and invest in, a sustainable economic moat that drives value creation. However, disruptive business models are often the ‘curveball’ that can destroy existing value. We therefore pay close attention to these

Let’s take it from the top. The top of the cycle, that is.  As the market corrects, anticipating a roll-over in the economy, investors behave in a way you would expect any rational, thinking person to do: either they abandon the equity market – if

The value of gold is the price of gold You will have noticed the stand out performance of South African gold equities since the start of the year and perhaps wondered why they are doing well this time. Gold equities are in fact (poor) derivatives

SUSTAINABILITY OF THE SA MINING INDUSTRY The investment case in South African resource equities, as in all other equities, should be premised on sustainability.  In other words, if factors responsible for economic value creation in mining are not renewable, then mining companies cannot sustain the valuations

ICASA TAKES STRONG STANCE AGAINST HIGH TARIFFS. In our previous note, we explained how the structure of the local mobile telecoms industry has led to inefficient outcomes for consumers.  An effective duopoly of MTN and Vodacom has resulted in pricing and tariffs that are amongst the

Over the past year, Cell C and 8ta have disrupted the SA mobile market by introducing aggressively priced data and voice offerings. These come against a backdrop of an implicit duopoly in the local industry that is protected by a strong ‘network effect’. Initially supported

Since our last communication, we have observed the labor troubles that have gripped the platinum group metals ("platinum") industry and the world's attention morph into a broader political issue. In our view, these events, in fact, represent a grand failing of South Africa's industrial policy.

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