Primed for disruption

I spent the weekend in Johannesburg celebrating my brother’s engagement. I met a whole new bunch of new people. The conversation turned to investments. They all had some form of investment. These were either through the usual suspects (Think Old Mutual etc) or a provident fund (Alexander Forbes). I felt that no one really knew exactly what they invested in. All they knew is they got pretty rubbish customer service and believe they pay excessive fees. This talks to my theory it is better to be a shareholder of Old Mutual, Liberty etc. Personally, you won’t find any life insurance policies or financial products in my investment portfolio. I am, however, quite happy to be a shareholder of an Old Mutual or Liberty. They are fee-generating machines. (As an aside, I do sometimes feel bad investing in these companies as I don’t believe in what they do. However, you can’t take that stance when investing because then you wouldn’t be able to invest in most listed companies then.)

What makes me most excited is that the industry is broken. The industry encompasses financial companies and financial advisors. We need the tech industry to step in. Fintech is the buzz word of the day but it is a threat that will catch financial services napping. Fintech means automation, better decision-making and time-saving. I chuckle when I hear people say things like “We will always need human advisors.” This may be true for the next 5, 10 or 15 years (who knows) but change is coming. I don’t know when and I don’t exactly in what form. I do, however, remember hearing things such as “We will always need people to drive cars. They want to be in control”. We now know that self-driving cars are no longer science-fiction.

Disruption is coming. One day there will be a cost-effective solution for the average person to invest in. And they will do it themselves. It will be transparent and easy to understand. Let’s call it “investing for normal people”.

What I have been reading

Charlie Munger’s Investing Principles
Shoe Dog by Phil Knight (current book I am reading)

Dividend News

We finally have some dividend news.

  • Woolworths (WHL) kept its interim dividend unchanged at R1.33 per share
  • Truworths (TRU) also reported an unchanged interim dividend (R2.70 per share)

Click here for the latest dividend table

Follow Geoff Noble on Twitter or LinkedIn