Episode Transcript
The Finance Ghost: Welcome to episode 254 of Magic Markets. It is the end of 2025 – well, it's the end of 2025 for us and in terms of podcasts that we are going to do, because we are calling it here for the year. From next week, Moe and I are taking I think a very well-deserved break.
That's across Free and Premium, so if you are a Premium subscriber, that gives you a couple of weeks to go back and check out some of the research that you might not have had time to get to during the year. From a Free perspective, also, if you've missed some podcasts, please do go back and find some winners. There are lots of them in the library this year.
And we will be back early in January. So, this is goodbye from a 2025 perspective, and of course, that means that we're going to look back on some of the big stuff this year. Moe, more from a macro perspective. Me, some bottom-up stock stuff, some of the names in my portfolio, and just some of the stuff that I found interesting.
So, thank you for joining us this late in the year. Moe, looking forward to doing this one with you and then seeing you on your merry way for a nice holiday.
Mohammed Nalla: Indeed, Ghost. I finally decided that I need to take holidays on the South African calendar. With the public holidays coming through next week, pretty much everyone's away, and I'm sure everyone's looking forward to some downtime. That's why we figured some downtime is probably a good idea to just go back, reflect.
It's very useful. Not just in the bottom-up space, like you say, if people have missed some of the old research, they can go check that up in the library. Over 250 reports in the library there, so I don't think people are going to struggle to find content in Premium.
But then also on the macro side, it's really good to sometimes just switch off. Go away, digest. There’s been a lot that has gone on, and we're going to unpack some of that macro narrative. What were some of the big themes this year? So, I'm going to cover some of that. You're going to cover some of the bottom-up stuff that you've mentioned. And then, Ghost, I also want to wrap on just how performance has been across asset classes on a year-to-date basis.
We're almost done with the year, we've got a couple of weeks left, so it's a pretty decent time to just go and have a look. What were some of the best-performing asset classes? What were some of the best-performing regions? So we've got quite a bit to unpack.
I'm going to jump in first, though, Ghost. When we look at themes, what were some of the major themes this year? And I'm going to go through this fairly quickly, because again, we've covered it in some of our previous podcasts, but it will give us a nice foundation on which we can build the rest of the show.
And one of the most prevalent themes from early on in the year is: what was going to happen with inflation? We had the US tariffs – the ‘tariff tantrum’ if we want to call it that – in April. Very painful for some people. Then a sharp bounce thereafter. A lot of that was related to, again, uncertainty around US policy. That was obviously the major theme.
But then also, what does that mean for inflation? There was a lot of talk early on in the year to say that these tariffs are going to come through with pretty sticky inflation in the US. And the problem is that it takes a long time to play through.
So, we have seen inflation bottom out and then start to tick higher in the US, but the reason why this is relevant is that it then plays into what people's expectations are around interest rates. We've got a Fed meeting this week, in fact, so by the time this podcast is released, we'll know whether the Fed has actually cut rates at this December meeting or not.
The market probability on that alone, if you just mapped it over the course of the last month, was quite schizophrenic. It went from around 70% all the way down to around 50%. A lot of people saying, “No, we don't think the Fed is going to be able to actually cut at this meeting. We're concerned, there's no US economic data coming out.”
And then just over the course of the last two weeks, that has bounced very sharply. We're now pricing around a 90% probability, so the market's saying that the Fed's got to move by 25 basis points.
But with that inflation question mark still hanging over our heads over the course of the last year and going into the next year, the question is, how aggressive can the Fed be at successive meetings?
And so that forward guidance focus is going to be very important at this Fed meeting, and then successive meetings as we head into the new year. That's one major theme that we actually just have to touch on.
The other one was the AI theme. Everything's been about AI. It's this ‘arms race’, if we want to call it that. And this goes beyond semiconductors. If you had a look at some of the best performers over the last three months, it's been all of the semiconductor stocks. We know Nvidia has been the largest stock in the world for some time, pretty much most of this year as well.
But it goes beyond that, because you've got to look at energy stocks as well. What is the energy demand going to be around AI? What's happening with sovereign build out? So, that's another mega theme.
A third mega theme would be China. There are underlying shifts in China, lots of pressure stemming from the tariffs into China. Is China slowing down?
But what we've seen inside China is that they've reorientated, or are in the process of reorientating, their economy away from that old model of infrastructure-led growth, and they've been investing very heavily in AI, in clean tech. And so you can actually see the common threads that we're trying to draw between some of these mega themes.
Then, if we come back to the US. Big concerns – we mentioned interest rates, we mentioned monetary policy, but big concerns around fiscal policy and fiscal dominance. Because a while ago, South Africa was running deficits north of 5%. They've trumped some of those back. But the US, the world's largest economy by many measures, is running a fiscal deficit in excess of 5% of GDP and no signs of that slowing down.
And so that is why, if you have a look at the US bond curve, yes, we're expecting a 25 basis point cut from the Fed. But last week, if you had a look at the 10-year curve on US Treasuries, that actually went up. And that's because people are concerned, at the longer end, around the fiscal story in the US.
Then lastly, Ghost, just wrapping up a couple of things here, there have been some moves in the oil market. That's been a really terrible market. OPEC struggling with their quotas; they're oversupplying. Big concerns around global growth, but it's really an oversupply story coming through there.
Other global stories. You've got global real estate corrections in specific markets, as well as a housing shortage in the US – lots of concerns around corporate real estate, offices in the US. We've seen stories in some of the big metros there.
And then, if we layer on top of that the geopolitical risks that bring in China, Taiwan; that bring in Russia and the EU, or Elon Musk saying the EU should be dissolved, and Europe not being happy about that.
Latin America has been a complete, wow, I'm not even going to say it. But in LatAm, you've had a change of leadership in Brazil, and so some concerns there. You've got Mexico, which looked as though they were falling afoul of the US, but now they seem to be making friends. It's really been a very, very busy year.
And as we head into the tail end of the year, pay attention to Japan. New leadership there, and Japanese bond yields have spiked. The reason I raise this is that it's so important to contextualise the global carry trade.
Yes, the US is easing, but if Japanese rates are going up, it could mean a repatriation of capital to Japan. And that is generally bad for risk assets, carry currencies like the rand, for example.
So, I know I've wrapped a lot up in there, but that was just a quick snapshot of some of the key themes that we had this year that will carry through into 2026.
The Finance Ghost: And Moe, what a year for you. Because you're a gold bug, and 2025 was the year of ‘gooold’, right? Fantastic Austin Powers skit.
Mohammed Nalla: [laughing] I left it out on purpose because you're kind of stealing my thunder. I'm going to have a look at what the best asset classes were. Gold, featuring very prominently there, so I'm going to keep quiet about that right now, but it's been a great year. I love gold. Gold's had a fantastic year.
The Finance Ghost: No, it has. So, I'll let you do the asset classes just now. Let me mention a couple of stocks that I thought were kind of interesting this year. In honour of the F1 season ending – a season that I must say I watched very little of. I'm not loving this modern era of cars. Nonetheless, McLaren takes the victory, and Ferrari's share price – down 20% year-to-date.
And those two things are completely unrelated, because the Ferrari share price could not care about their on-track performance. The last Ferrari world champion was in 2008, so that tells you that there is zero correlation.
But, where there is a correlation, is between growth and valuation expectations. And maybe Ferrari is a cautionary tale, as we head into 2026, of what happens when the market overpays for stocks.
What's sad with Ferrari is that management didn't do anything wrong here. They had a capital markets day where they basically said what they've been saying for the past how many years now.
They said, “Look, there is a certain number of cars we're going to make every year. It's manufactured scarcity. We can't grow at infinite growth rates forever. Yes, we can keep working on pricing, we can keep pushing personalisation, etcetera, but there's a practical limit to our growth rate.”
So, that caused a huge sell-off in the Ferrari share price, because the market suddenly got the message that, actually, this thing can't grow at high rates. Even after the sell-off, it's on a price-to-earnings (P/E) of 37x, which is just remarkable. It tells you how crazy it was. It was up at like 50x, sort of similar levels to Hermes.
And what is interesting is I was super tempted, after that big sell-off, to say, “Okay, maybe it's time to put some more Ferrari in the portfolio.” Or some Ferrari in the portfolio, actually. I think I'd avoided it because of the valuation, really.
And I'm glad I didn't, because it's pretty much now back to where it was after that sell-off. It had a little blip, and now it's back where it was. So, the market's not jumping at it. Because the problem is it's still on a P/E of 37x, as I mentioned, and that is a lot. That really is a lot.
So, big cautionary tale there. Even the best brands – I mean, that's one of the best brands in the world – they can't just trade at infinitely high multiples. So, think about that going into 2026.
Obviously, what I'm alluding to here – tech, AI. We'll see what happens in 2026. I think a lot of the questions around whether it's a bubble or not will be answered, and we'll see what ends up happening there. But Ferrari, certainly a cautionary tale, Moe.
Mohammed Nalla: Indeed. I mean, luxury – if you cast your mind back just a little further than a year ago – was all the rage. Everyone was speaking about luxury stocks. Ferrari, we contextualise as a luxury stock. It's not an automotive stock.
And you've seen a similar kind of lacklustre performance come through from the likes of LVMH, one of the world's largest luxury groups. They sold off so sharply up until around three months ago, there and thereabouts, and then you've seen a recovery come through in that share price.
But again, it's largely tied to that valuation story that you mentioned. Because, at the end of the day, you've just got to be sensitive to what you’re actually paying for an underlying business. How much of a growth story is priced into that?
We've covered stocks on Magic Markets Premium, where we've seen those valuation multiples really extend. And eventually, the share price doesn't have to correct. It can just go sideways for a very long period of time as the company's underlying operational performance improves.
And this is assuming that the company is doing the right thing and they're actually doing good business. They slowly grow into that multiple. What it means for you as a shareholder is that, if you've overpaid, you're going to go sideways even if the underlying business is performing well, just on the basis of the fact that the company has to grow into its reality.
So I think that's a great example, Ghost. What else do you have for us in that stock analysis or that bottom-up view that you were looking at?
The Finance Ghost: Yeah, so there are some goodies. I wanted to talk about banking. Two of my core positions, Goldman Sachs, JPMorgan. Very good year for both.
Goldman Sachs, 52% – wonderful, monstrous performance in a volatile market with lots of activity. Goldman Sachs is basically like going long volatility in developed markets where there's activity in the US. That's what Goldman Sachs is.
And given the geopolitical climate we're in and everything going on there, and the depth of capital on Wall Street, thematically, I'm therefore very happy to be a Goldman Sachs shareholder.
JPMorgan. They aren't as heavily focused on the advisory side. They do have a big retail banking operation, etcetera. They're up 32% year-to-date.
So, I basically use those two together to give myself a tilt towards the investment banking side, but to still have this nice, deep US banking exposure. And obviously, that's been a wonderful combination, those two.
For context, Capitec – best of the local banks again this year, Moe, again, it's quite incredible actually. Capitec did 26% this year. Now, the rand has had a good year against the dollar, so you would theoretically need to put that into dollars to be directly comparable. But again, Goldman Sachs 52%, JPMorgan 32%. Capitec’s 26% and still not as exciting as the names that I can go and buy in the US, even though they're doing so well locally.
So, it just shows. You don't have to be buying the AI names, etcetera, to make some money in offshore markets. I remain very happy with my banking exposure there.
Mohammed Nalla: Yeah, Ghost, what's so interesting is if you look at the S&P 500 Financials Index, it hasn't done half as well as the banks. So, I think that's so skewed, because you've got the big, powerful, strong, high-quality players. Remember in the US, you've actually had some regional banking wobblies, right? So that pulls the overall index down.
And again, I think for me, the takeaway there is that if you are playing in some of these spaces, sometimes there is merit in just backing the biggest, baddest names that are out there. You don't get bigger and badder than JPMorgan. That's been a favourite of both of ours for quite some time. Goldman Sachs, yes, you're picking up some of that underlying volatility.
What's also been interesting, that you've got to go and have a look at, is the performance of some of the underlying platforms that are out there. So here, you would look at something like Robinhood. Robinhood, having a phenomenal year. They're kind of a financials platform.
And again, that's based on the fact that a lot of people are out there investing in markets. It's the financialisation of the economy – ‘meme-stocking’, if you want to call it that. And it hasn’t just been Robinhood.
Even if you look at other brokers that are a lot more, let's call it, ‘respectable’ (some people don't like Robinhood, too much gamification in there). If you go and have a look at a stock like Interactive Brokers. That's the broker I use (no advertising for them, but obviously just mentioning the stock here).
Interactive Brokers has also had a phenomenal year. So, I think the story for me in financials is that it's been a very active year in the markets. The beneficiaries of the mergers and acquisitions (M&A) and the funding and all of that – that's the big banks. The beneficiaries of all of this volatility and activity on the markets, that could be the banks on one hand, it could be wealth managers on the other hand, and then also some of these trading platforms where you can get listed exposure to that.
It's been a pretty exciting sector, but you've got to be very careful because, like I mentioned, if you just went with S&P 500 Financials, that hasn't had a fantastic year, and that's largely because of the drag that you've seen from some of those regional-banking and other issues in the US.
The Finance Ghost: Yeah, another one that I'll mention there, while you talk about platforms – Uber. That's been amazing. That's up 45% this year. I'm very happy with the mobility platform.
And the whole thesis there (and this is something we covered in Premium) is just that there's so much runway for the average Uber user to do more with them. Take one more trip a month or two more trips a month, get one more item on Uber Eats.
You don't need people to base their whole lives on Uber. It's not a Microsoft situation or Apple. You just need them to use it a little bit more over time. And so, I really like that story. That's doing well.
And I've made sure that I still hold some more resilient names in the portfolio. So NextEra Energy (that's one that we talked about on Magic Markets Premium – that's why I hold it), up 13% year-to-date. Solid, dependable performance. It's nice to see that doing well.
There's some ugly stuff as well, which I will obviously mention shortly. But let me see what else you've got in your box of goodies you want to talk about, and then maybe I can mention some of the things that didn't work so well this year.
Mohammed Nalla: Yeah, I think we've got to be fair, right? I mean, NextEra Energy, I'll take that as a win. It was one that, when we covered it in Magic Markets Premium, I don't think you had heard of them. I liked it because it was quasi-defensive, it was a utility (and this goes back now just over a year ago). I like that defensive element to it.
But there's also the AI mega theme that we've touched on, where the energy demand has kind of gone off the charts. So NextEra, I'm very comfortably long of that in my portfolio.
When you're looking at platform businesses, you mentioned Uber, they've had a great year. But I do want to just sound some caution out there, because if you go and have a look at another player – go and look at Airbnb, for example. They haven't had a fantastic year.
And so I don't think it's “Platform businesses are good. Capital-light businesses are good.” At the end of the day, you've just got to be very circumspect. I think Uber's been doing a lot of things right, but I wouldn't look at that as a platform mega theme, because I think, if you just roll down a little bit deeper, lots of pressures.
Yes, Airbnb have had some challenges. They've had some regulatory challenges coming through there. I would say maybe a little bit more cautious on that particular aspect.
Ghost, give us your big, bad stories for the year. Let's see what you've got.
The Finance Ghost: Now, there are some howlers. So, here's some of the ugly stuff, Moe. I'll start with a relatively small one (for me, at least, because of the levels I bought in at; for others who have held it the whole year, not so small, unfortunately). That is Accenture.
Now, Accenture should be up spectacularly this year, because this is very much a tech-focused management consultancy. They should be making plenty of cash in an era where people are investing in Cloud and AI and looking for advice. Instead, the share price is down around 22% year-to-date. I'm personally down around 6.5%, still really irritating.
And what's frustrating here is it's not the risk you might think of AI displacing them. It's actually because Accenture is just not on the right side of the Trump administration, and they actually lost out on quite a lot of government work as a result.
So, maybe a lesson here around public sector exposure in a year where government changes. These things do happen. It hasn't worked out. I mean, good luck guessing who's on the right side of Trump at any point in time. That's not a trade I want to try and guess, at any stage, but it is frustrating with Accenture, obviously.
Another one that is luckily a small position for me and certainly has gotten smaller this year, and I just can't, I just can't decide if I need to get out of it or not, that is Adobe. Much like its friend Salesforce, these two old software-as-a-service (SaaS) giants have had a horrible year. Adobe's down about 22% year-to-date.
Again, lots of concern there around AI and disruption. Even though Adobe is including AI in its offering, there are still big questions around the creator economy, and I don't know where that's going to land.
That's why sometimes I'm happy to just have a smallish position, where it's annoying if it goes wrong, but Adobe is certainly not the size of Microsoft in my portfolio, for example, or the likes of JPMorgan.
But now for the biggest offender. Moe, which has been the biggest offender this year for me? You might know this one. You'll know it when I tell you.
Mohammed Nalla: I know, I know. I'm going to guess…Lululemon.
The Finance Ghost: Mhmm!
Mohammed Nalla: Yeah, let's go!
The Finance Ghost: You are correct, sir. You know me well. Lululemon year-to-date down 51% – which is pretty diabolical, let's be honest. I'm down like over 40% because of my timing of the dip, and then the dip dipped, and then that dippity-dip-dipped, and it just dipped all the time, and it's not fun. And it's down like 50%, which sucks.
Tariffs are part of it, and maybe there's a lesson here. The frustration is it's the brand that I wanted to have shares in for a long time because it was doing so well, and then I waited. I waited for it to actually have a wobbly and then to get involved and be like, “Okay, cool, this valuation is somewhat more palatable here.”
It certainly could have been worse. We're talking about a stock that peaked here at like $510, roughly. It's now down at like $180. So that would have been much, much worse. What's that? That's a drawdown of – oh, it's awful – like 65% from that level. The year-to-date is not much better, but at least it's slightly less aggressive.
So yeah, Lululemon not good, and unfortunately, that position is not as small as I would like it to be. I'm still not quite sure what to actually do about that one, but it is what it is. Overall, it's been an okay year.
As I said, there've been some really, really good names that have done really well. I've obviously just cherry-picked here. Lots of exposure to tech still. That's the thing that I'm just not sure about going into next year – but no one knows, right?
This is going to be the literally trillion-dollar question in 2026, Moe. Are we in an AI bubble or not? We've discussed it many times. Everyone's talking about it, no one actually knows. But we're going to find out in 2026, aren't we?
Mohammed Nalla: Maybe. Who knows? You could have argued we were going to find out in 2025. It's like trying to guess who's on the right side of the Trump administration. You use that reference tongue in cheek.
I'll tell you who's on the right side of the Trump administration. It's a stock I don't like to follow, but here's the clue: their CEO was bouncing up and down in his chair earlier this week, and was all over social media. Palantir. Alex Karp, you either love him or hate him. That's a stock I avoid in general. I just don't like…
The Finance Ghost: Cross-country skiing. They actually said “cross-country” skiing on X. For younger viewers, I'm not going to go into the clear thing they're pointing to here, but, for goodness' sake. It's just so blatant.
Mohammed Nalla: For me, I mean, there are some of those just weird, murky underbellies in the market, but Palantir has been a strong performer. It's one I've avoided. I guess your Lululemon is the bad performer because that's really been probably one of the worst stories out there.
My biggest drawdown for the year came around the tariff tantrums. Listeners of the show will recall that back then, I was very successfully deploying a high-frequency intraday strategy. It was working so well. And then Trump literally threw a hand grenade into that, and it cost me a real bucket load of money that I spent the better part of the rest of the year trying to claw back (because this is what people don't realise).
And I clawed back in my trading portfolio. The long-only portfolio, that's done pretty well. In the trading portfolio, if you started out with 100 bucks, for example. And let's say you took a big drawdown and, for ease of reference, you took a 50% knock, and you’re now sitting on 50% of your capital.
To get back up to your 100, it's not a 50% gain. You've got to make a 100% gain to get back up there. So that was obviously quite painful for me. No, it wasn't those numbers specifically, but it was a painful April that I then spent the rest of the year in my trading portfolio trying to claw back.
Thankfully, a lot of things have gone well, and probably more things have gone well than they've gone badly this year. Ghost, I'm going to use this as an excuse to wrap on what were some of the best-performing asset classes, regions, even sectors in the US.
What's performed? That's probably the easy one. If we start off on sectors in the US, it's still been a tech story. It's the Infotech segment, it's the Communication Services, which is where things like Google and Meta go into. And, in aggregate, those sectors have been the biggest performers.
Do you want to hazard a guess at what the worst performers were on a sector basis in the US?
The Finance Ghost: No, I don't want to hazard a guess, Moe. It's too late in the year, and I'm too tired. Just tell us. Tell us what it was.
Mohammed Nalla: So, I'll tell you what surprised me is if you go and have a look at consumer stocks in general (and it almost doesn't matter whether you're looking at consumer staples or if you're looking at consumer discretionary stocks), they've actually had a very lacklustre, single-digit, low single-digit year.
Still positive, but I would say that surprised me a little bit. Because we've spoken about the resilience in the US economy and so forth, but that's really just been a tech story.
Then understandably so, because tech and growth have rallied so strongly, stuff that's more value-orientated – if you're looking at utilities, you're looking at healthcare – they didn't have a fantastic year.
So that's kind of what your sector split looked like in the US. Not too surprising, other than like I say, the consumer sector for me was a little bit worse than I would have anticipated, certainly with the kind of inflation backdrop that we have going in the US.
Usually, inflation is good for retailers, but again, maybe it's just that the confidence was hit so much. People don't know what's happening with tariffs. That might have actually taken some of the steam out of those stocks.
Let's pivot from that into a global lens here, because we've spoken a lot about the US. If you're looking at world markets, I'll tell you what I've covered here, right? So I've got all of the major commodities – oil, gold, platinum. I've got copper in there as well.
And then major markets, so South Africa. China, regionally. Euro Stoxx. Emerging markets as a whole. Japan, the S&P. Let's throw in India as well. And then let's say US Treasuries – so you can go with like a 20-year US Treasury (TLT is the stock code that you would get on an ETF that gives you that exposure).
In that subset – all based in dollars, so that we've got a common currency – what's your top pick for the number one podium spot? McLaren, we know, but in this subset.
The Finance Ghost: Geez, I don't know how South Africa ranks on the global scale, but we've actually had quite a good year from an equity perspective, especially with the rand, so that can't be too bad. Emerging markets have had a decent year.
I can tell you it's not oil. Oil's had a horrible year. You didn't mention Bitcoin, but it's definitely also not Bitcoin, so that's something to think about.
Mohammed Nalla: Let’s put Bitcoin on the list, let’s see where Bitcoin will come.
The Finance Ghost: It’s not Bitcoin, it’s not. [laughing]
Mohammed Nalla: But give me your top three podium spots here.
The Finance Ghost: Isn’t South Africa somewhere on that podium? That's the one I care about.
Mohammed Nalla: I can't cheat and tell you. You're going to have to guess. Come on.
The Finance Ghost: I have one guess, Moe. My guess is South Africa. One, two, and three, then I've got to get one of them right. Where is it on the list?
Mohammed Nalla: South Africa does make it onto the podium, so if you look at…
The Finance Ghost: Tada!
Mohammed Nalla: …and with good reason. So, South Africa is number three on that podium, right? If you look at the two asset classes broadly that pipped South Africa to the podium spot, it will make sense why South Africa is on that podium.
Because we know even in South Africa, this has been a resources story. That resources sector has been on fire. It's been gold and platinum names.
And so, on the number one spot, you've got platinum. Platinum on the year-to-date basis has actually outperformed gold.
The Finance Ghost: It's remarkable, actually. That is amazing.
Mohammed Nalla: It’s remarkable. I mean, we spoke a lot about gold, but platinum, the number one spot. Gold, the number two spot. Again, solid double-digits, 85% and 60% in US dollars. That is a strong, strong performance.
South African equities coming through, in dollar terms, over 50%. Now that's obviously as at today, we've got two weeks to go to the year end. So, that's obviously for the year-to-date. We've got another two weeks to run on that.
That's what rounds up the top three podium spots. But then I'm going to run down the list for you, because then you've got China.
I know there was so much bearishness around China. When we were speaking around this time and even early this year. China is my Ferrari trade, like a long-suffering Ferrari supporter in F1. I believe that China was actually undervalued, and you've seen some of that come through – and I still believe it's undervalued.
So, China coming through in the number four spot there. And they've had a pretty strong year. Because early on in the year, around March, they were the outperformers, solidly outperforming all of the other markets we've mentioned. Then they kind of went sideways, and then refound some of that momentum following August. So, China coming through.
Then, no surprises here, the Euro Stoxx. The Euro Stoxx, outperforming the US. So this again, something I'm very proud of. With my institutional clients, we were discussing relative positioning – geographically, where do you want to be? And I was long China, long Europe. So, Europe coming through quite strongly there.
Pretty much on par with Europe, emerging markets as a whole. Now, I don't like this as a bucket, simply because, if you look at emerging markets as a whole, there's a lot going on in there.
You've got China that kind of pulls it up, and then you've got other players that kind of pull it down. So it's a very broad bucket. But in aggregate, emerging markets are outperforming the US on a year-to-date basis. That's pretty decent.
Then Japan. Japan was a fairly strong performer, but has gone sideways from around the middle of the year. So, pay attention. Some political change in Japan. I do have some concerns. I'm less bullish on Japan now than I was two quarters ago.
Then the S&P 500. So, it's remarkable that, amongst all of these global markets, the S&P 500 – okay, and remember that's the index as a whole, so it's not just Nvidia and the tech stocks that have done really well, you've got to throw in the rest of the underperforming US markets – the S&P 500 coming through with a pretty average year versus some of those global peers.
Then, below the S&P 500, India. And India, again, the darling of everyone speaking about emerging markets. My concerns on India were that valuations were just way, way overcooked…
The Finance Ghost: 100%
Mohammed Nalla: …I said this on the show so many times. And that's gone sideways – barely cracking a positive performance. So, it's on the knife's edge as it speaks right now, more or less in line with if you had invested in US Treasuries.
And then, the disappointment – oil coming through negative double-digits, in the teens, there.
You mentioned Bitcoin, so let's throw Bitcoin into the mix there. I'm going to have to go and check this, because I didn't have it on my original list. But if we look at Bitcoin, down around 3% – 3.5%. So, very volatile.
And again, I think the frustration here is that last year, people were all talking about the demise of fiat currencies and, “Crypto is the answer,” to all of these things. The only winner of that argument has been gold and hard assets – I'm a long-term gold bull, so I'm not going to go down that entire narrative.
Bitcoin has correlated very strongly with risk assets. So, I think some big concerns there. The concerning thing for me on Bitcoin specifically, Ghost, and I have to unpack this, is the amount of leverage that's coming into the system.
You've got players like MicroStrategy (or it's now just called Strategy, I guess), these Bitcoin treasury companies that are out there, that are layering on leverage. They’re issuing shares at these ‘premium multiples’, if you want to call it that, or valuations at a premium to their net asset value (NAV).
They're going out there, they're buying Bitcoin, and so the question mark is, when Bitcoin sells down below certain levels, at what point in time are they forced to sell? That, for me, has done a lot of damage to the Bitcoin narrative.
I'm not anti-crypto. I do think that there is a space in portfolios for crypto. But I think some of the characteristics behind the market have lent a toxic edge to that, so that's the reason why I'm being a little bit cautious on that front.
The Finance Ghost: So, I've got two stats to take us home, and then it's time to go on holiday, Moe. First one is with Brent Crude down 19% year-to-date, roughly, just based on the charts I've got in front of me, Sasol is up 18% year-to-date! Now, some of that (or a lot of that) is because of the chemicals business, and some signs of life there. A lot of that is South African sentiment, infrastructure locally, but that is fascinating.
I don't think anyone would have had that on their bingo card coming into 2025 – that oil would be down by almost 20% and then Sasol would swing totally the other way, by a pretty similar percentage. Really interesting.
And then, just because I enjoy this a lot, actually. As you said, platinum. So, I've got platinum here, dollar price for the year up like 88%. Tesla, up almost 11%. So, that’s pretty interesting. Electric vehicles, not quite getting the adoption everyone thought.
Tesla, obviously suffering from Elon Musk's overarching, well, ‘Musk-iness’ really, and how he upsets Europeans basically for sport. And they are the biggest buyers of electric cars for him, leaving aside stuff like China. Of course, that's been another big thing this year. The emergence of these Chinese automotive brands.
So, I think we'll have to leave it there, because we could talk for 10 hours about this. It has been an incredibly interesting year.
Our listeners, thank you for joining us on this journey. We love talking about the markets here on Magic Markets. We do it every week. Be sure to join us in 2026. We've got a few interesting things coming, which we'll tell you about at the time, but you're going to hear some additional voices next year. Some interesting insights, as always.
So, thank you very much. And Moe, I suggest we call it a day, and call it a year.
Mohammed Nalla: Ghost, the show has just been so much fun, and I could go on for another hour. There's so much to unpack. I think we've touched on a couple of key points.
And I guess that's why, as listeners, you've got to keep coming back to Magic Markets, because at the end of the day, there's so much going on in the markets. It changes week to week. We're always trying to keep something relevant out there for you to learn from.
And if you haven't yet subscribed to Magic Markets Premium, go and have a look at that. It's only R99 a month. We think that's the best value that you can actually find there, in terms of ‘do your own research’.
Again, I can't stress that enough, Ghost. We haven't increased our prices in five years, because we've tried to keep this affordable over that entire time period, but that value proposition is certainly worth a lot more than R99. So, if you haven't checked that out, go and check that out.
We hope you've enjoyed this. We look forward to seeing you back with Magic Markets in the new year. To everyone out there celebrating, have some great holidays! Christmas, New Year's. Stay safe, and we'll see you on the other side of New Year's.
Until that time, thanks so much, and cheers.
The Finance Ghost: Ciao.
Let us know what you thought of the show. Hit us up on social media. It's @MagicMarketsPod, @FinanceGhost and @MohammedNalla all on X, or go and find us on LinkedIn. Pop us a note on there.
