Foreword | Issue 75 | 3rd Quarter 2025
DID YOU KNOW? FIAT CURRENCY
Most of the world’s money has value not because it is backed by anything tangible, but because governments decree that it does. This is the essence of a fiat currency — money created by order (fiat in Latin) rather than by convertibility into gold or another asset. Since the 1970s, when the United States ended the dollar’s link to gold, all major currencies have operated on this system.
THE AI REVOLUTION: LEARNING FROM PAST BUBBLES
Artificial intelligence is transforming industries and reshaping how we work, communicate and invest. History reminds us that every great technological leap attracts speculative excess. The railway mania of the 1840s and the dot-com boom of 2000 both began with genuine innovation, drew in enormous capital, and ended in overbuild and collapse. Portfolio Manager JC Xue considers whether the current AI cycle will follow the same pattern.
CHINA'S NEXT ACT
Despite its listing global emerging market stock indices, China already produces more electricity than the United States, India and the EU combined. It operates seven of the world’s ten busiest ports. It also ranks as the largest global economy, if you exclude the effects of exchange rates. Portfolio Manager Rashaad Tayob writes that China’s ‘emerging market’ label is starting to sound outdated.
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SA INC. SHARES — UNDERVALUED, UNDER-OWNED, UNDERESTIMATED
After years of selling pressure, South African equities are showing signs of revival. The JSE hit record highs in September, driven by mining stocks — after gold and platinum prices surged to all-time peaks. Yet the real story lies beneath the surface: years of foreign disinvestment have left SA Inc. shares deeply undervalued. Portfolio Manager Nancy Hossack explains why this may be the year SA Inc. equities reclaim the spotlight.
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THE FIXED INCOME OPPORTUNITY
Governments are again living beyond their means. In the United States, spending exceeds revenue by some $2 trillion a year. One-fifth of federal income is now devoted to interest payments. South Africa faces a similar problem: public debt has risen sixfold in 15 years, while the economy has barely grown. The world has left behind the era of cheap money, but not the habits it encouraged. Portfolio Manager Farzana Bayat considers how this shift is reshaping the bond market.
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THE RAND'S REMARKABLE RECOVERY
Only six months ago the rand seemed in freefall. In April, during the tariff-driven sell-off, it nearly breached R20 to the US dollar. By early October it was trading near R17, its strongest point in more than two years. For a currency that often serves as the world’s favourite shock absorber, the turnaround has been remarkable. Portfolio Manager Rashaad Tayob explains what lies behind the move — and what it means for investors.
RETIREMENT, REIMAGINED
The old idea of retirement — a single moment when work stops and leisure begins — no longer fits the modern world. Longer lives, shifting work patterns and uncertain finances are turning retirement into a gradual process rather than a fixed event. Christina Castle, author of Foord’s Teach Your Child to Invest series, explores how the boundary between work and retirement is becoming more fluid — and why that may be a good thing.
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MARKETS IN A NUTSHELL
We summarise the market movements for the latest quarter.
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