the dream run, page-20

I was going to shoot down posters the other day who were stating that it was purely the risk in SA that has caused CCC to go in a bit of a stir. I was going to post the chart since Jan of both CZA and CCC to show how they differ...

Then I realised they were essentially identical- Both saw good gains late in '10 only to retrace back nearly to where the respective runs started from. Obviously, CCC moved on greater % (as you would expect for such a heavily traded share)

I personally believe the fundamentals of SA are fine, however I believe (looking at the chart between CZA and CCC) that the fear of sovereign risk in SA has been playing at least a minor role in CCC's down slide.

I personally believe this is a 'good thing'- It gives somewhat of a concrete reason as to why the drop. In my opinion, it decreases the risk that we are simply dumb and are missing some glaring obvious fact that has intrinsically devalued the company 20%.

If we are 'correct' about SA being a lot more mine friendly (especially for BEE compliant companies) than the sentiment suggests, we should see the money come flowing back in as people regain confidence. Articles that suggest money is flowing into bonds in SA and that Indians are looking/investing in SA will strongly assist in getting the general investing community looking more positively on South Africa.

Also proof of good quality cash flow tends to lessen the impact of sovereign risk- If you are producing 5MTPA you are more likely to take less notice of a crazy man in a Youth league associated with the ruling party.

If we are wrong then we all knew the risk and live with our decision- But I really dont see this as likely... Why create a BEE policy that so far seems to have the potential to work, just to destroy it and implement a policy that is known to destroy a country's wealth? The ANC mining minister essentially said the same when talking in Perth at the Africa Down Under conference.

I cant remember the exact excerpt- you might be able to find it if you google it or hunt back through 5000 odd CCC posts!

Good night to all. I continue to hold.