A positive spin on South Africa, by top US analyst

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Came in via email recently, prety good reading, makes me feel positive ;-)

Interesting letter by John Mauldin, one of the US’s top investment advisors – recently voted second only to Warren Buffet as an investment guru

I start this week’s letter somewhere over the Atlantic, halfway through an 11-hour flight from Frankfurt to Dallas. It has been an altogether marvellous 11 days in South Africa, speaking to over 1,000 people at 12 venues, giving a half dozen media interviews, and meeting with many individuals.

This week, I want to give you some impressions of not only South Africa, but talk a little about emerging markets in general.

Finding Value in South Africa

I realized about halfway through my recent trip that it had been sometime since I was in an emerging-market country. I have been to over 50 countries over the past 20 years, but recently most of my travels have been to Europe and Canada, with the occasional vacation trip to Mexico.

As I observed South Africa, it was forcefully brought home to me that there is more to the emerging-market story than China, India, and Brazil. There are any number of countries that are seeing robust growth and contributing to the world economy. It was reported at Davos this year that for the first time the developing world has a larger share of world GDP than the developed world. Today, we focus on an emerging-market country that does not make as much news as it should.

As I mentioned above, the mood among those I talked with in South Africa in the early 1990s when I was travelling often to South Africa was quite pessimistic. The economy was not good, due to international economic sanctions stemming from worldwide protests over the policy of apartheid. Changes and elections were coming, and it was not clear what would happen.

I travelled for (mostly) business into 14 other sub-Saharan countries in Africa. With a few notable exceptions, most countries were not doing well and things had progressed from bad to worse over the previous 10-20 years. It was a tough time to try and do business, but it was a great education.

The contrast today is amazing. Before we get into some facts, let me give you a few impressions. First, there are construction cranes everywhere in the four cities I visited: Johannesburg, Pretoria, Durban, and Cape Town. Twelve years ago the thirty miles from Johannesburg to Pretoria was mostly agricultural land. Today it is one big city, with offices, malls, and homes lining the freeway. There was a significant number of rather nice new housing developments, many if not most being built on speculation all along the freeway.

Johannesburg is a world-class city, on a par with New York or London or any major city in terms of facilities, shops, infrastructure… and traffic. There were new shopping malls all over, and the stores were busy. The restaurants were excellent. The hotels I stayed in and spoke at were excellent and modern. The Sandton area is particularly pleasant.

Durban is a tropical jewel on the Indian Ocean. Again, there was construction everywhere – a green, verdant city of 1,000,000 people, with modern roads and great weather.

I have been to Sydney, Vancouver, and San Francisco. I love all of them. But for my money, Cape Town is the most beautiful city I have been to in the world. Amazing mountains, blue water harbours, white sand beaches, with wineries nestled in among the mountains and valleys. The Waterfront area, where I stayed, is fun and vibrant. Again, an amazing amount of construction everywhere, especially in the waterfront area, as investors from Dubai are pouring huge sums of money into creating a massive residential/business/ retail/restaurant development. There are several similar, quite large developments going up in different parts of Cape Town.

I ate dinner on Friday night at a restaurant called Baia at the Waterfront. I find I really love the better South African chardonnays. My friends know I am something of a chardonnay snob. I like the better California wineries. I was pleasantly surprised to find more than a few South African chards the equal of their US counterparts, but at a third to half the price for the same level of quality. (I should note that a decent chardonnay in London or Europe is twice the US price.) The two of us had the best chardonnay in the restaurant and one of the better meals I have had in a long time, and the bill was less than $100.

The next day my partner Prieur du Plessis informed me that Baia was one of the most expensive restaurants in town. By way of comparison, you can easily spend 2-3 times that at a comparable restaurant in Dallas, and 4-5 times that in New York. Forget London.

I began to ask about the bills for food, drinks, and such for the rest of the trip. The country was uniformly about half what I would pay in Texas for the same quality. I stayed in a very nice five-star hotel (The Commodore) for six nights for less than $1,000, including several meals, laundry, and my bar tab. Their walk-up price was much higher, but clearly you can get deals, and it is tourist season at that. The service was terrific and uniformly delivered with smiles. The exceptionally nice private game reserve (Itaga) we stayed at when I first arrived, trying to get over jet lag, was only a few hundred a night, including meals, wine, and game runs. In short, after having been to London and Europe for my last few overseas trips, South Africa seemed like a bargain.

And it was not just the people I spoke to that were optimistic. Grant Thornton (a large international accounting firm) did a survey in the 30 countries in which they do business. The four countries with the most optimism and confidence were India, Ireland, South Africa, and Mainland China. Why such confidence? I think there are several reasons. The economy has been growing at a reported almost 5% a year for the past several years, which is quite strong. They have had 32 consecutive quarters of positive growth. But the official figures may understate the reality by a significant amount. If you look at the VAT (value-added tax) receipts, as well as other tax figures, some economists estimate the economy may be growing by 7% or more. Why the difference?

There is a large “informal” economy in South Africa. While much of the income may not be reported, when something is bought and sold in the retail sectors, taxes are collected.

The stock market has grown by over 25%, 47%, and 41% for the last three years. Such a bull run is always a boost to confidence. But there are also some real fundamentals underlying the emerging-market Bull markets. South Africa has a strong commodity sector, with numerous commodities and not just gold. JP Morgan thinks that earnings growth for South African companies, even adjusting for some anomalies, will be 20% this year, which should mean another good year for their local markets.

This link between commodities and stock market prices is reflected not just in their stock market, but in emerging markets worldwide. Look at the close correlation for the last ten years between the prices of commodities and the emerging-market equity index. I think this rather clearly shows the link between the recent rise in commodity prices and emerging markets. It is more than just a China story.

Football as an Economic Driver The attention paid to football (or soccer in the United States) is rising to fever pitch in South Africa. And for good reason: they will host the World Cup in 2010. They expect some 3,000,000 fans to show up. The government is using the occasion to spend some 400 billion Rand (a little over US $50 billion) on all sorts of infrastructure projects. They are doubling the size of the major airports, which had already been significantly improved. Walking past the construction at the Johannesburg airport, you have to be impressed with the size of it. New roads and other forms of infrastructure are being added to prepare for the influx, but it will have the added effect of making the country more competitive, just as infrastructure in China has been a boost to that country, and a lack of infrastructure has limited India.

The World Cup will also be a boost to tourism, already one of the most important sectors of the economy. Cape Town is becoming an international destination for vacations and conferences. The growth in tourism has been strong, showing 20% growth last year from 2005. 2006 was a record year.

Interestingly, 75% of the traffic reported in the tourism growth is from Africa and the Middle East. While a lot of the people are vacationers, I think a goodly portion are businessmen and women from all over sub-Saharan Africa who look to South Africa as a deal-doing financial centre. South Africa has a quite strong, very competent, and growing financial services sector that is a magnet for entrepreneurs from all over Africa seeking to find capital. South Africa also has a strong entrepreneurial class which is the base for much of the new business and development, not just in South Africa but in all of Africa. The rest of the world rightly sees South Africa as the place to launch into the rest of Africa.

Are there problems in South Africa? Of course, and some of them are quite serious. But that is the case in nearly all (I cannot think of an exception) emerging-market economies. While the overall crime rate is dropping, it is still far too high. Some rather high-profile crimes of late have resulted in a strong outcry for serious change.

Corruption is an issue, but that is the case in almost every emerging-market country. The high levels of poverty are evident. Although employment is growing and more and more of the poor are being brought into the economy, there is still a lot of room for progress.

The telecommunications infrastructure is hampered by a lack of serious competition. Access to the internet is limited in many areas, and it is really slow where it does exist. This will improve in the coming years, but it is a serious handicap to business. There are power shortages and the need for more power-generation plants to keep up with the growth.

But all these areas are (mostly) going to improve. I see a lot of opportunity in South Africa in particular and Africa in general. Let’s look at one area where there may be more than a little potential in the future.

I think there is deep long-term value in African (not just South African) farmland. Right now, given the nature of US and European subsidies to agriculture, it is hard for developing-world farmers to compete. But that will change in the next decade.

As I have written before, “Old Europe” the US and even Australia are going to come under intense government budgetary pressure due to the high levels of pension and medical costs they have promised their retiring boomers. Europe is particularly vulnerable. Quite simply, Europe cannot afford to keep the pension promises they have made and pay for any other normal government expenses without raising taxes. Except that they already have economy-stifling high taxes.

Budgets are going to have to be cut in other areas. At some point, sooner rather than later, agricultural subsidies are going to come under pressure, as politicians must decide where to find the money to pay for the promised pensions and health care. There are more voters who are older and on pensions than there are farmers. I can count votes, and it is not hard to predict the result. It will be with a lot of fighting, but in the medium run, the agricultural subsidies in Europe are going to have to go.

When the writing is clearly on the wall, Europe will start to negotiate on those subsidies, trying to get something for what they will have no choice but to give. Part of that will be to reduce US subsidies as well. Africa will become a breadbasket for much of Asia. With China pressed for water and much of its agricultural land being used for development, China will need to import more food. And as the rest of the world becomes more developed, there will be an increased demand for meat, which means an even bigger demand for feed grains for livestock. The growing use of ethanol is increasing demand for corn, absorbing more of the world’s land use for energy corn rather than for food.

The simple fact is that as the world grows more prosperous we are going to need more grain and other foods. Where is the land we are going to need to feed the world There is an abundance in Africa, along with the needed water and labour. And as African countries upgrade their infrastructure, it will improve the ability of farmers to get their grains to market at profitable levels.

There is much to like about emerging markets. That is where a great deal of the real potential growth in the coming decades will be. And South Africa will be one of the better stories. If you are not doing business there already, you should ask yourself, why not?

Home Again, Tulsa

I want to give special thanks to my South African partners Prieur du Plessis and Paul Stewart and the rest of the team at Plexus Asset Management. I have never been treated so well on a trip. They made all the hard work a pleasure, taking care of a thousand small details so I could focus on the tasks at hand. And they did arrange for some fun, relaxation, and great sightseeing. I am looking forward to going back soon. I was particularly impressed with South African Air. Very comfortable business-class seats, impeccable service, and great wines. I have trouble sleeping on planes, but I could actually sleep in these seats. But it still took over 40 hours to get to Johannesburg, rather than under 20, so I was exhausted when I got there. Jet lag this trip was as bad as I have ever had. Coming back has been easy. It is getting late and time to hit the send button. Have a great week and enjoy the ones you’re with.

Your tired but happy analyst, John Mauldin – http://www.johnmauldin.com/.

Checkout O3Spaces – billed as alternative to Sharepoint

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From the Using Sharepoint with Firefox post a while back…
_ O3Spaces Workplace – About the software

About O3Spaces Workplace

O3Spaces Workplace is a Web 2.0 Document Management & Collaboration Solution for OpenOffice.org, StarOffice and MS Office users.
O3Spaces document collaboration

O3Spaces Workplace brings document management and document collaboration features to OpenOffice.org / StarOffice and Microsoft Office, including real-time version control, automated check-in/check-out and document security.

O3Spaces Workplace offers you freedom of choice. You can use the office suite of choice on your (MS Windows, Linux, Solaris or Mac OS X based) computer, and have O3Spaces Workplace offer its unrivaled user friendly Document Management and Document Collaboration solutions for (distributed) teams, workgroups & departments.

Looks pretty interesting – anyone using it?

50 Useful Tools for Evaluating Your Website

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Check it out, you might find something new and interesting here:
_ Internet Service Deals » Is Your Site Hot or Not? 50 Useful Tools for Evaluating Your Website

You may think your website is great, but if you really want to know the truth, you need to call in some help. Whether you’re assessing your popularity, traffic, or usability, there are plenty of tools out there to do the job. Here, we’ve shared 50 of the best tools that will tell you just how good your site really is.

Job: Social Media Manager in Johannesburg

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(Directing strategy, content and actions on niche social networks)

Context: Social media and digital technology offers business powerful ways to interact and collaborate with their customer, channel and employee communities. This speed and flexibility offered by innovative Web 2.0 tools and Social Networking platforms is one of the only remaining avenues for competitive advantage.

The Virtual Works are an 11 year old business that supply outsourced expertise, creativity and engagement systems and management services to help clients build and engage their enterprise communities. We run niche social networks – for business reasons – and offer our clients a REAL rate of return on Web 2.0 platforms. For a live example – check out www.designmind.co.za.

Roles: 4 key functional roles exist at The Virtual Works:
1.Strategy: We help our clients develop community engagement objectives and strategies.
2.Data: We gather and capture profile data and the opt-in consent to engage members.
3.Systems: We configure open source Web 2.0 platforms to help our clients manage their interactive relationships.
4.Engage: We create the content, the value and invent tactics to get community interaction, engagement and commitment – and measure our results.

Social Media Manager: Drive community interaction and engagement to get community commitment – profitably:
1.Design social networks (Strategically – this isn’t a development position! Just be at home with Web 2.0…)
2.Implement widgets / Web 2.0 measuring tools and plugins
3.Implement the strategy/Build community eco-system. Make sure the right people exist inside the network – it’s the only way to trade value for loyalty.
4.Create and Manage content and value distribution. Work with writers to direct the content strategy.
5.Administrate the network
6.Set up moderation processes to keep content focussed.
7.Invent and innovate.
8.Promote, blog and market the niche social network. Liase with PR to make it famous.
9.Analyse and measure. Web analytics. Sales analytics. ROI.
10.Grow the network in terms of member base, interactions and client sponsors.
11.Rinse. Repeat. Refine.

Skills required:
1.Social media / Web 2.0 / internet savvy.
2.Trained in marketing communication discipline. [Degree/diploma]
3.Good communication/writing and presentation skills.
4.Strategic thinking ability.
Personality attributes
1.Results orientated.
2.Over the top passionate about the web as a medium… but clever enough to think strategically though its impementation.
3.Good planner/co-ordinator. Inventive/creative
4.Self starter. No spoon feeding. Take the ball – web with it.
Package: R20k to R25k p/m CTC and a 20% profit share on the community. Run a business, within a business!

www.virtualworks.co.za

Email CV’s and a reason why you’re great to [email protected]

Recommend: Posh Eyes for specs (& good SEO optimisation)

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While on a business trip recently, I left my black glasses case on the black leather back eat of a cab, and didn’t get the returned despite the £50 reward offered inside… Which was a bummer. But hey, I’m not likely to do that again ;-)

Anyways, so I went to my optom to find the same frames that I like and they didn’t have them, then went into the optom to find new ones, and couldn’t really find anything I liked. So faced with more shopping, I decided to try online to see what I could find, armed with the make and model of the frames (I had an older spare pair of the same).

So, take home is that through Google and good SEO I came accross Posh Eyes online, made a call once I found my frames, and hey presto about a week and half later I had my new frames all the way from Italy, at about £60 cheaper than if I were to get them from the high street optom.

I found the service was personal and prompt, and as a result will continue to use them, and will probably try contact lenses too when my current batch are finished.

Check them out, might be a good find if you’re in the UK.

_ ACUVUE Contact Lenses from Posh Eyes

We’ve complemented our product range with the best customer service. In over 10 years in the optical industry, our Managing Director, Julian Gooddy, has led teams which have won the top customer service awards in the UK, including the prestigious Daily Telegraph/Energis Customer Service Award.

We’ve also made it much easier for you to purchase your contact lenses. Join our Posh Eyes Plan and your lenses will arrive automatically at your chosen address every 3 or 6 months without the need for you to reorder them. As a Posh Eyes Member you will also receive a 5 % discount off our already incredibly low contact lens prices.

Our designer range of glasses both looks great and provides amazing value for money, with complete glasses starting at only £64.99! There is a superb range from which to choose including designer names such as Emporio Armani, Jai Kudo, Silhouette, POLICE, GUESS, GANT, ELLE, Tommy Hilfiger and others. To help you decide which frame suits you best, many of our frames can be viewed on a face. You can see colour options online, and view a high quality magnified image of every frame design. All of our top name designer glasses come with scratch-resistant and anti-reflective coated lenses as standard. Our extensive range of lens options includes sunglass, photochromic and ultra-light thin lenses.

Because we are based in the UK there are no hidden additional duties, taxes, or delivery charges.

So why don’t you browse through our store and let us help you look good and feel great about yourself!

Kaelo for health and wellness in Johannesburg

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I’ve known John since we played hockey together at Jeppe Quandom in Johannesburg in the mid 90′s… and even back then he was always into holistic health, as well as a good party ;-)

So after 6.5 years of being in London, it’s super cool to see him (re-)launch something that is clearly aligned with his interests…. Kaelo.

If you’re in Johannesburg and are looking for someone to look after you and yours, then I’d highly recommend John, he’s an awesome guy.

It is with great excitement and anticipation that Kaelo unveils our new identity, which extends well beyond a visual re-branding, to reflect the physical growth and continuous evolution of our business.

When Kaelo first launched, our intention was to provide corporate Africa with workplace HIV/AIDS solutions – which we continue to do with much success. But Africa needs a much more comprehensive, holistic approach to health and wellness. We are successfully partnering with African companies to meet that need; together we are improving the health and well-being of their people and ensuring a positive return on investment and greater profitability for their businesses.

Kaelo’s work has always been driven by a need to ensure that all Africans can achieve their right to health and wellness – for life. But this cannot be accomplished by addressing HIV/AIDS alone. To support overall health and wellness, we cannot exclude the increasing prevalence of chronic illnesses and disease – and the lifestyle factors that contribute to their prevention or onset and management. Our goal is to ensure an improved quality of life for all working Africans and their families for life.

The time has come to align Kaelo’s corporate image with who and what we have become – a guardian of health and a leader in the journey toward both wellness and lifesaving lifestyle changes.

Kaelo is a seTswana word meaning “guardian” or “guide”. Our new logo is a symbol of Kaelo – our work and our passion for and dedication to the health, well-being and happiness of Africans.

The arms extended represent Kaelo as ‘guardian angel’, offering care, protection, strength and openness, while the circle encompasses wholeness, endurance and perfection. We chose the color green as it is the healing color of nature and of life, symbolizing health, growth, well-being and harmony. Accompanied by our name in grey font, the logo is balanced with sophistication, stability and respectability.

We hope our new look resonates with you and we look forward to continuing to reap mutual and greater benefits as our rapid growth persists. We encourage you to visit our new website at www.kaelo.co.za, but please bear in mind it is a work in progress as we complete our changes. If you have any questions or feedback, please drop us a line – we would be happy to hear from you.

Yours in Health…For Life,
The Kaelo Team