The end of an era - and errors

21 August 2013 - 02:39 By David Shapiro

Sitting in my office on Friday after my 5.30pm crossing to Radio 702, I was overcome with melancholy, longing for times gone by. My wife warns me it is a sign of old age knocking at the door. She continuously counsels me to put the past behind me and embrace the future, Facebook and all.

Looking through my scribbles for my radio report, the JSE had closed at an all-time high on Friday, ending above 43000, an important psychological barrier.

More significantly, the resources sector, which has acted as a drag on the stock market's performance for the past two years, ran up nearly 8% over the week, with gold and platinum shares recording gains I've seldom seen in 42 years on the JSE.

Admittedly, the miners were clawing back some lost pride after being pummelled for most of the year. Regardless, their recovery was cause for celebration. On the old trading floor the noise levels would have lifted the ceiling as the market rose to new highs.

The activity of dealers rushing back and forth to their desks to report trades and collect fresh orders would have been exhilarating. And when the closing bell rang traders from all the firms would have unwound in the club or the adjoining restaurants.

The open outcry market had its pitfalls. It was inefficient and not always fair. Institutional clients were favoured above retail customers, and trades were not necessarily transacted in exact time order. It was understandable.

Dealers tried their best but juggling scraps of paper while markets were pulsating around them opened the way for mistakes. But with all its shortcomings, trading between the chains was exciting. It trained you to keep calm under pressure and it taught you the psychology of price formation.

I was pumped up with enthusiasm as I analysed Friday's share-price movements but was obliged to confine my high spirits to my brief radio report. Our office was virtually deserted. With the JSE's modern electronic trading systems, deals are executed at the touch of a button.

Nowadays a brokerage firm can handle 1000 times more trade than in the past with a quarter of the staff and a 10th of the problems.

What's surprising is that 65% of the daily turnover is generated automatically by computer programs. But with the introduction of electronic structures out has gone the soul of the trading floor, distinguished by characters like "General Custer" - Bert Todd - who was welcomed back to the floor every Friday after lunch to the sound of tom-toms after he confessed to young dealers that he had his last stand ages ago. Or Bob Fowles, who would slap the back of your head if you asked him if he had an interest in CHICs (Corner House Investments).

There was odd-lot dealer Jannie "Torso" van der Westhuizen, who earned his nickname after signing up for a Tromp van Diggelen bodybuilding course, or "Cadbury", who was double thick, or "Peg Leg", who had polio as a child.

Then the JSE ruled as the resource capital of the world, with gold shares occupying centre-stage and diamond giant De Beers a strong supporting act. The demise of our gold mining industry, the upshot of lower grades, higher input costs and labour issues coincided with the JSE's move from a manual to a mechanised trading environment. The easing of exchange controls opened opportunities for local businesses to expand their operations abroad. Deregulation of the broking industry brought global players to the JSE.

I do not include gold shares in my portfolios, believe it's too early to buy platinum and have selected BHP Billiton above Anglo American. My sentiments are shared by most of my colleagues , so it was reasonable not to expect outbursts of emotion after gold's surge last week.

For me, it brought back memories of good times on the exchange floor. My wife, though, was right. It was time to acknowledge the "Stompies", "Ringos" and "Robber Rouxs" were gone forever.

I cleared my e-mails, logged off and phoned Chris to record a podcast for our website.

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