How SA investors can take advantage of global opportunities

Black Friday is widely known as the most anticipated event on the annual retail calendar. Picture: Independent Newspapers.

Black Friday is widely known as the most anticipated event on the annual retail calendar. Picture: Independent Newspapers.

Published Nov 25, 2023


By Roger Eskinazi

BLACK Friday is widely known as the most anticipated event on the annual retail calendar. Traditionally, it has earned a reputation for being a day on which retailers offer massive price cuts and discounts ahead of the festive season. As the global shopping frenzy approaches, now’s the time to keep a close eye on local and global markets, and for online traders to consider repositioning portfolios to take advantage of opportunities that may arise as a result.

From financial crisis to shopping craze

Around the world, Black Friday has become associated with shopping. It’s not uncommon to see media reports of long, overnight queues and surging crowds waiting eagerly for shops to open their doors. While Black Friday has become synonymous with shopping, many don’t know that the origins of Black Friday can be traced back to the 19th century American stock market.

The first recorded use of the term, “Black Friday” dates back to September 24, 1869 – a day that marked the crash of the US gold market. Leading up to the day, two unscrupulous financiers, Jay Gould and Jim Fisk, colluded to buy as much of the country’s gold as possible in the hope of stifling supply and selling it at astronomically high prices.

On that Friday in September however, news of the conspiracy was leaked, sending the US stock market into free fall, and causing large-scale disruption and bankruptcies. Thereafter, Gould and Fisk earned themselves the notorious reputation of being “robber barons”, and Black Friday became known as the first day of the 1860s financial crisis. Over time, news of this historical occurrence found its way into public discourse around America’s Thanksgiving holiday.

For many years, American retailers reported high spikes in sales volumes on the day following Thanksgiving – a time when many retailers touted unsold stock at considerably low prices to make space for new stock ahead of the festive season. As the story goes, many retailers operated at a loss (or ‘in the red’) for the major part of the year until the day following Thanksgiving, when they began to see major profits (and went “into the black”).

Along the way, thanks to the efforts and marketing tactics of public relations professionals, Black Friday evolved from its dark origins into something more positive – a day when shoppers could loosen their purse strings and buy essential goods and gifts ahead of the end-of-year holidays.

Markets to watch

Ironically, however, the advent of Black Friday continues to influence stock markets in several geographical territories. Although experts agree that the market shifts seen on Black Friday are more fleeting than they are impactful in the long run, there is still much potential for opportunistic online traders to take advantage of the spending frenzy.

The Bureau of Market Research (BMR) predicts that this year, South Africans would have spent more than R26 billion on Black Friday, November 24. While stagnant economic growth will likely prevent sales from returning to the record high R42bn spent in 2021, retailers across multiple product categories stand to realise substantial gains from the big day.

Ahead of Black Friday, online traders looking to cash in on the Black Friday hype would do well to conduct market research on fluctuations that have occurred over the years. Using tools like Tickmill’s Economic Calendar can provide traders with a holistic overview of the performance of certain financial instruments in response to Black Friday. These historical trends need to be analysed in conjunction with a comprehensive understanding of major developments in consumer spending. Together, this information can help traders make the most informed decisions.

Some of the most notable trends include the fact that according to Nielsen, Black Friday last year saw sales in the fast-moving consumer goods (FMCG) sector being boosted by over R1 billion. Stocks in companies within this sector may therefore warrant a second glance in the lead-up to Black Friday. Card transactions have also skyrocketed over Black Friday in recent years. This year, in light of the proliferation of Fintech start-ups and innovative payment gateways, companies in the payments space are likely to attract more investor appetite.

A word on discipline and staying on course amidst the chaos

Despite these market movements, online traders need to remain vigilant – to steel their nerves against the pitfalls of fear and greed. The allure of rapid-fire transactions and seemingly irresistible offers can lead to impulsive decisions that may not align with a well-thought-out trading strategy.

To avoid getting caught up in the whirlwind, traders should establish clear goals and set predefined limits on their investments. Implementing stop-loss orders and profit-taking strategies can help mitigate risks and prevent emotional decision-making. Additionally, maintaining a disciplined mindset involves staying informed but not succumbing to the pressure of immediate market reactions. By focusing on long-term objectives, conducting thorough research, and resisting the urge to impulsively chase fleeting opportunities, online traders can navigate the Black Friday frenzy with a steady hand and strategic precision.

So while it may be tempting to become caught up in the energy of the day, traders are encouraged to stick closely to their trading plans and to take risks – but make them calculated ones.

* Roger Eskinazi is the managing partner at the Tickmill.