As any parent of young children will attest, the need to know “why” and “when” is a natural human tendency.
It is also the mainstay of daily market commentary and investment articles. Human beings believe that if we know why something happened, it will help us to make sense of it and form a better basis for future decisions. We want a thread of causality - and, if at all possible, a linear one with a timeline.
When considering an investment that is in any way connected to what happens in South Africa (notably, shares and local government bonds), investors are sceptical.
They ask why the investment case will materialise, why the value the buyer sees will be recognised by the market, and why low valuations will improve. Investors want a checklist that states what needs to be in place for the thesis to be proved right, and by when.
Checklists can be useful in investment decision-making, but even when used well, they come with no guarantees. Although they can help to assess and determine the investment case and the quality of the investment, they don't tell us when a revaluation will happen.