What’s going to happen?


We just don’t really know.

This is the answer to any question we ask about the future. In times of trouble, a lot of experts rise to the surface and they certainly don’t agree with this answer. Many people seem to know exactly what is in store for South Africa in the next couple months and even years ahead. Sho, these are some talented individuals (I get the irony that I send my own weekly email 🙂 ).

Please don’t think I have a cavalier attitude towards the noise we are faced with. At times I want to open my window and scream out, “Cry the beloved country. Oh JZ, what do thee to our beloved country” but dwelling on this will cause me to make some really stupid investment decisions. Our friends in Australia are still waiting for the country to fail and are probably wringing their hands with glee as they watch from abroad. We told you, they cry. (PS: I say you are only 23 years late).

The rule of law (while being tested) is still strong in South Africa. Real property rights and contractual law still exist. The Guptas need them to exist else all the one-sided contracts they sign will have no force :). Jokes aside, I believe a lot still has to go wrong before we cannot invest in South Africa. I am not a fortune teller and of course, I could be wrong. There is something we call Deep Risk. Those of you who have read the “Forget the Noise” book will know about Deep Risk. Deep Risk includes inflation (our biggest risk). It also includes confiscation. Confiscation is when the government takes things away from you unlawfully (i.e. real property rights fall away). To address Deep Risk, we make offshore investments in markets such as the USA and UK.  We don’t abandon our SA investments. We just broaden our investment universe.

So my point this week. Is stop trying to predict the future and rather be prepared for a few different futures. You never now how things will unfold. (By the way, I think we will be just fine and JZ has never been weaker).

What I have been reading

Preparing For the Next Bear Market by Ben Carlson

Dividend News

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