Category Archives: Investment Strategies

Santam


Suid-Afrikaanse Nasionale Trust en Assuransie Maatskappy Beperk (Santam) is the largest short-term insurer in Southern Africa. The company has been in existence for 100 years and has developed and grown with the South African economy. Santam does not get involved in any kind of investment insurance. Basically, it insures you against risks which you cannot afford to (or do not want to) take yourself. So you cannot get an annuity endowment policy from Santam – but you can insure anything else.  It is instructive to look at a long-term logarithmic chart of the Santam share (SNT) price going back to 1985:

Santam (SNT) Semi-Log Chart August 1985 to September 2018 – Chart by ShareFriend Pro (Click to Enlarge Image)

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Mental Posture


What separates an effective private investor from one who loses money continuously? The difference is what we call “mental posture”. To be a successful private investor you need to have a good mental posture. But what is mental posture? It is your emotional response to the share market in general – and to your shares in particular.

What are you feeling? Because how you are feeling will determine what decisions you make.

You may think that you are well in control of your emotions. You may consider yourself to be rational and objective in your investment decision-making. You may think that your emotions have no influence over your decisions – but they do. Read More

The Confidential Report – June 2018


Political

President Ramaphosa has been fortunate that his two main opposition parties for the 2019 election have been busy shooting themselves in the political foot. The DA’s extraordinary handling of Patricia De Lille now threatens to lose them their anchor support among the coloured people of the Cape Province. At the same time, Ramaphosa’s shrewd move to annex the EFF’s primary populist appeal in the area of land expropriation has forced that party to the extreme left where it has become blatantly and overtly racist in its message and at the same time made absurd suggestions about all land in South Africa reverting to the government on some basis. In the meantime, under Ramaphosa’s leadership, the ANC has been looking more and more like the balanced party of reason and common sense. An increased majority in 2019 will entrench Ramaphosa for the next ten years. Read More

Lessons From Steinhof


The loss by Coronation of R14bn in the Steinhof debacle shows the weakness of fundamental analysis when compared with technical analysis. Altogether, mostly big institutions lost at least R200bn from the Steinhof collapse.

Coronation, taking a primarily fundamental approach, focused its analysis on predicting the probable future dividends to come out of Steinhof – and then discounted that, using an internal rate of return (IRR), to arrive at a net present value for the share which they could then compare to the current share price. Read More

The Confidential Report – May 2018


Political

One of the legacies of the Zuma era is a massive and inefficient civil service. Years of “jobs for pals” and rampant nepotism has seen the civil service grow to unmanageable proportions. The economist Dawie Roodt has estimated that, including the state owned enterprises (SOE), the civil service now employs about 3 million people. In the February budget, the government estimated that it would spend in total R1,68 trillion – out of which more than R585bn would be civil service salaries. That is just over 35%. This means that the enormous civil service is sucking up funds which could be better spent on development. The challenge is to reduce the size of the government, beginning with the number of ministers. It has been estimated that South Africa could probably manage with roughly two thirds of the number of ministries that it has. Over time, the effect of that on the economy would be enormous. Read More