My Brain Food This Week...
Problems at the port of Durban lead to loss of revenue, Warren Buffett has trimmed half of his Apple stock in the last 6 months, Akon City is facing problems, and I wrote about Ark Venture Fund
Hi everyone
Read: my note about how Ark Venture Fund is pioneering a new structure for venture capital.
Here’s what caught my eye this week:
Durban’s port issues and bad reputation hamper local tourism as business diverts to Maputo. What’s happening?
The Durban port is responsible for the majority of shipping trade in South Africa. For example in September 2023 the port of Durban was reported to handle 7.4 million tonnes of cargo and 228 000 TEUs (64% of all TEUs handled in SA in that month); however the port of Durban is facing continuous bottlenecks and has been operating at increasingly lower capacity for months. There remains no concrete plan to fund reforms in the Durban ports as they continue to struggle with deteriorating infrastructure and equipment to service volumes required. The knock on effect is that shippers are increasingly diverting their cargo to Mozambique, which results in a loss of revenue for the Durban ports, making the affordability of investment difficult. The expected acquisition of key operating activities by ICTSI is also facing snags due to stakeholders querying the deal based on process and job worries - further exacerbating the challenges in Durban.
Between the end of 2023 and June 2024 Warren Buffett’s Berkshire Hathaway has dumped ~56% of its Apple stock. Why?
In a previous note I wrote about how Apple was once Berkshire’s largest single public holding, which showed confidence in Apple’s future because Buffett believes in holding shares of great companies, forever. This downsizing signals 2 things: 1) Apple’s recent product announcements have been disappointing according to Apple followers. This may mean Buffett no longer has strong conviction in Apple’s product plan and growth prospects. 2) The S&P 500 gains since 2020 can be attributed mostly to 7 companies (Apple, Microsoft, Google, Nvidia, Meta, Tesla, Amazon) who together account for 33% of the value of the S&P. This is obviously unsustainable as you’d question the performance of the 493 other companies and wonder whether this signals a broader issue to worry about in terms of the economy. By heavily trimming his Apple holdings Buffett may be signalling the top according to his mantra: be greedy when others are scared, be scared when others are greedy - while also signalling broader economic concerns.
Singer Akon’s multibillion-dollar futuristic city in Africa gets final notice. What’s happening?
In 2020 American-Senegalese singer Akon was granted 136 acres of land to build a futuristic city called Akon City, at a cost of ~$6 billion. To date not a single brick has been laid and Sapco-Senegal, the state-owned entity charged with developing the country’s coastal and tourism areas, has given Akon formal notice to start work on his project or the government will take back 90% of the land granted to him. The grandiosity of the project should have been red flag number one. Sure, a new city would be lovely but why not start small and scale up, build a school first, then a hospital, then a business centre or industrial park. The showman approach has an air of selfishness which takes away from the positive that large investment could bring to a region in need - with some now calling the idea a “scandal”.
Other reading…
Electric Power Supply Shouldn’t Slow The Development Of AI Data Centers
Japanese Central Bank Raises Interest Rates for Second Time Since 2007
Podcasts & Video 🚀
Which piece of content sticks out for you?
Let me know in the comments!👇🏾