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Welcome to Mind Matters week of 28 February 2022
Global news focus:
Russia - Ukraine: background, immediate and longer term impact
Commodities From Gold to Grains Rally as Russia Faces Isolation
Commodities from wheat and gold to aluminum rallied in a jittery start to the week, as traders grapple with a fraught geopolitical environment and an array of supply risks triggered by war in Ukraine.
This Bloomberg article will ease you into the clear impact that that the sanctions are having on the markets, especially those stocks tied to Russia. 3 min read.
Ukraine: how the Russian invasion could derail the fragile world economy
The invasion of Ukraine comes at a delicate time for the world economy, which was just beginning to recover from the ravages of COVID. Russia’s war could now have far-reaching economic consequences, as financial markets tumble and the price of oil soars.
A worrying comparison can even be made to the 1973 Yom Kippur war in the Middle East, which led to an oil crisis. This shook the world economy to its foundations and signalled the end of an economic boom which had done so much to reduce unemployment and raise living standards.
History does repeat itself, but the tension between Russia and the Ukraine has been there for over a century. Keep your mind open as to the elements involved. 4 min read available below in .pdf
Swift: ejecting Russia is largely symbolic – here’s why
Russia’s invasion of Ukraine is horrifying. Western leaders, fearing a broader war, are responding primarily with economic sanctions. A prominent economic sanction has been Russia’s exclusion from the international payments messaging system Swift, presented as a powerful means of undermining its economy.
This article explains how SWIFT works and its role in sanctions. It is a must read for this context. 4 min read available below in .pdf
The funds with the largest exposure to Russia
Citywire looks at which portfolios available to South African investors have meaningful positions in Russian equity or fixed income.
The fund available to South African investors with the largest exposure to Russia was the Coronation Global Emerging Markets Flexible fund. The portfolio had 10.3% of its assets in Russian stocks at the end of December, according to Morningstar. Based on its latest fact sheet, however, this had increased to 11.7% by the end of January.
An informative article. 3min read
WEBINAR RECORDING - FREE AND INSIGHTFUL
The Inside Track: Putin's War
Daily Maverick Editor-at-Large Richard Poplak speaks to Bill Browder, author of Red Notice and architect of the Magnitsky act.
This is a fascinating webinar and you will find that the way in which Putin and the Oligarchs have maintained wealth and power is very similar to the corruption narratives in SA. Bill Browder has so much to tell us that we really didn't know about. They have made the webinar freely available. It is a recording of just under one hour.
South Africa’s retail petrol price set to hit a record of R21.60 a litre
Retail petrol prices in South Africa are set to rise by more than 7% to record levels above R21 a litre from Wednesday. Domestic inflation will stay elevated as a result. Russia’s invasion of Ukraine is one of the main reasons behind this surge, which will ultimately hit South Africa’s poor and vulnerable the hardest.
Think about this quote by Jean-Paul Sartre when you read this article. "When the rich wage war, it's the poor who die." 3min read
Who was Jean-Paul Sartre? A French philosopher (1905 - 1980). More available here on his ideas.
The Gold Standard - why it emerged and why it is no more
PODCAST
A 49 min podcast on the history of the Gold Standard and why the world no longer operates on it. This is a superb radio interview aired by the BBC on RSSRadio.
RSSradio is an easy to use app to get your favourite podcasts on your iPhone or iPad.
Insurance
Discovery Insure cuts vehicle claims by helping to fill 80,000 potholes
Project in Johannesburg has reduced applications linked to road damage by 26%, company says.
Discovery Insure says a public-private partnership it is involved in with Dialdirect Insurance and the City of Johannesburg to urgently address the pothole crisis of epic proportions on the city’s roads has helped reduce vehicle insurance claims linked to road surface damage.
Almost 80,000 Johannesburg potholes have been filled in by the partnership, Pothole Patrol, since its launch in May 2021.
This is a Business Live article for members only, but your institution may have a subscription. This project has been ongoing for some time. See a related article below from November 2021.
Pothole Patrol - Driving change on South African roads
"We're proud to support the Joburg Roads Agency with this important initiative. We have no doubt that it will make our roads safer for everyone," says Discovery Insure Chief Executive Officer, Anton Ossip.
"Since the launch of Discovery Insure 10 years ago, we've endeavoured to push the limits and do things differently. We wanted to make people safer; we wanted to be more proactive about risk rather than reactive; and we wanted to share value with the broader society, as part of our ambition to positively impact the lives of people with whom we share our country's roads," he adds.
Here is a brilliant example of an ecosystem. Three entities, two businesses (one insurance, one tech) and one state agency work together to make each one more successful! 2min 3o sec read
COVID-19 leads to an increase in orphans
‘Heartbreaking’: South Africa has more than 134,000 orphans from COVID-19
In what researchers describe as a “heartbreaking hidden pandemic”, up to 6.7m children globally have been orphaned or lost a caregiver due to COVID-19. In absolute numbers, South Africa was estimated to have 134,500 COVID19 orphans, with “at least one in every 200 children in every age group having experienced COVID-19-associated orphanhood.”
This article is a reminder that there were more casualties than deaths from COVID-19. Note the manner in which these numbers were drawn from the research. 4 min read.
New COVID data: South Africa has arrived at the recovery stage of the pandemic
A recently published South African study set out to determine sero-positivity against SARS-CoV-2 before the fourth wave of COVID-19, in which the omicron variant was dominant. Sero-positivity measures the presence of antibodies against the virus; it indicates past infection. The study focused on Gauteng, the country’s economic hub. Ozayr Patel asked Shabir Madhi to unpack the results and explain why the findings suggest that South Africa has reached a turning point in the pandemic.
A four minute read.
Investments
WHY EVERY FINANCIAL ADVISER SHOULD HAVE A CHAISE LONGUE Page 17 of the February edition of COVER Magazine.
The centrepiece of Sigmund Freud’s study at home in London and a symbol of psychoanalysis in general is the iconic chaise longue (pronounced ‘shayz long’ which is French for ‘long chair’).
Paul Nixon, head of behavioural finance at Momentum Investments tells us that advice demands understanding of investor behaviour. 3 min 30 sec read.
Time to think about investing
A redefinition of growth, putting a price on our natural assets to protect them and unexpected possibilities for South Africa. We look at three investment trends you can’t afford to ignore in 2022.
The number one anxiety of any practicing growth investor is this: will the business sustain its earnings growth? The principle of diminishing returns to scale is the reason they worry.
The article unpacks these trends but gives you examples so that you can relate to the writer's reasoning. 4 min read.
‘We should have sold more’: PMs react to Ukrainian conflict
With Russia's intensified actions in Eastern Europe, fund managers debate the implications for financial markets.
This is indeed an interesting debate if you are a quantitative analyst with portfolio management aspirations. 3min read
Fintech and Metaverse
FINTECH REVIEW & PREDICTIONS FOR 2022 Pages 55 -58 COVER Magazine
Fintech has gone mainstream and is no longer a niche sector. There are now over 26,000 fintech companies globally that employ half a billion people. The pandemic has changed consumer behaviour substantially, with 30% of banking consumers now using app banking and 64% of consumers using one or more fintech platforms. The future of fintech looks promising considering the maturity and funding of the sector. It is quite extraordinary how quickly consumers have adopted fintech; 96% of global consumers are aware of at least one fintech service or company, taking it from a niche sector to becoming mainstream.
A comprehensive review of Fintech, written by Dominique Collett, a senior investment executive at Rand Merchant Investments and head of AlphaCode. 5 min read.
Promising fintech solutions take the spotlight at Stitch hackathon
With fintech widely regarded as crucial in Africa's development because of its ability to drive financial inclusion, fintech startup Stitch challenged some of the top young talent on the continent to develop meaningful financial solutions for Africa at its hackathon on 19 February.
Keeping you up top date in the fintech space because many actuarial graduates find it appealing. 3 min read
A whole new metaverse for two SA companies
The ongoing metaverse and non-fungible token (NFT) hype is drawing the interest of South African companies.
MTN and advertising and marketing consultancy M&C Saatchi Abel have become the first local firms to buy virtual real estate in Africa’s first metaverse, Africarare.
Developed by Johannesburg-based innovation company Mann Made, the newly-launched Africarare is a 3D virtual reality (VR) immersive hub. It houses a metaverse marketplace that showcases African art, and provides a platform for businesses and artists to display their offerings.
Understand more about the metaverse and how NFTs are linked to it. 4 min 30 secs
More about you
Thought Experiment: How Einstein Solved Difficult Problems
Thought experiments are a classic tool used by many great thinkers. They enable us to explore impossible situations and predict their implications and outcomes. Mastering thought experiments can help you confront difficult questions and anticipate (and prevent) problems.
The purpose of a thought experiment is to encourage speculation, logical thinking and to change paradigms. Thought experiments push us outside our comfort zone by forcing us to confront questions we cannot answer with ease. They demonstrate gaps in our knowledge and help us recognize the limits of what can be known.
Wonderful read because you can learn how to conduct thought experiments and use these to enhance your learning and understanding of difficult concepts and even prepare for exams. 10 min read
Matthew Walker: The Power of Sleep [The Knowledge Project Ep. #131]
Renowned sleep scientist Matthew Walker discusses everything you need to know about what a better night’s sleep can do for your life, and how to prioritize and perfect the way you sleep. Walker breaks down how to identify when you need more sleep, how to deal with insomnia, the best devices to track your sleep, and some unconventional sleep hygiene tips, including why it’s never a good idea to count sheep.
This is an interview of almost two hours BUT it is broken down into sections and you can listen to the ones you find interesting.
Even if you don’t know it by name, I’ll bet you’ve experienced recency bias. That’s the formal name for the human tendency to remember recent events over more distant ones.
Recency bias, which was identified by the relatively new field of behavioural economics (in which Nobel-prize winning Daniel Kahneman — author of the best-selling book Thinking Fast and Slow — is a leader) seems to most seriously affect investors and business executives. But it also has an impact on writers as well.
Many of us have a bad test or a lousy tutorial and then we avoid studying for the next test or tutorial because of that experience. However, if we saw that experience in the total accumulations of tests and tutorials we will realise that it was a once off which we are treating as the norm. Daphne Gray-Grant shows us that we can overcome recency bias that holds us back from doing what we need to do. 3min 30 sec read
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P R O C R A S T I N A T I O N
B Y D A N I E L W O N G ( W W W . D A N I E L - W O N G . C O M )
Below is a .pdf of this article courtesy of Daniel Wong