Do what you will, I'm going Dutch with my play money
If you are as baffled as the best of us about market movements, maybe it's time we all revisited some basic truths. As many a bruised value-manager can attest, fundamental valuations appear to have gone out the window.
Stocks seem to be bouncing and dipping at the behest of forces that can best be described as nebulous.
Analysts like to say these swings in sentiment are based on investors' appetite for risk, with one eye on macro-economic trends that can change like the wind.
Forget about it. I've heard enough wayward risk-on/risk-off calls to last me a lifetime. And watching stocks, bonds and currencies over the past year, in particular, has given me vertigo. Nothing is going to plan, and thank heavens I don't have to advise millions of investors when I haven't got a clue (not that it ever stops the suits from offering, er, "guidance").
Given an (entirely fictional) investment sum to throw into the local JSE fruit machine, I would like to think gut feel still counts for something. There's nothing like feeling the "personality" of an enterprise to get a sense of good (or bad) things to come.
Ten years ago, as a reporter on the "leisure business" sector, I was utterly beguiled by the bosses of three companies: Gold Reef Casino Resorts, City Lodge and Mr Price.
Naturally I didn't have a brass cent to my name at the time, but if I had I would have bet the house on these blokes, all of whom appeared to be prepared to spend unlimited time talking shop with some gormless doofus from Business Day.
Memorably, the financial director of Gold Reef gently restrained me when I wanted to have a go on his new jackpot slot machines. "Don't be silly," was his unspoken suggestion.
In the case of City Lodge, you'd have to have been a fool not to recognise the brilliant simplicity of their business model. No frills, a touch of class, and location. Always location - the singular keynote of a successful property company that just happens also to be SA's most canny hotel operator.
Mr Price's then-boss Alastair McArthur spent an afternoon walking me through the Durban headquarters, notable mainly for the in-house hothouse that is its creative design studio, peopled by exactly the kind of hip young poor people that make up the company's primary target market.
So, yeah, I lost a fortune by not investing in those three companies. But probably saved my meagre wad by avoiding the other rotten lot I met (certain airlines and golf-estate developers) that for one or another reason made me want to run a mile.
Hindsight aside, I was still bowled over to see the relative performance of Mr Price in two graphs compiled by PSG Asset Management this week.
If you'd invested R4-million in the humble retailer in March 2002, you'd have close to R57-million today - without having had to reinvest any income.
By comparison, listed property would have netted you about R15-million and an index-tracker of the JSE All Share about R12-million. Anglo American barely beat the inflation rate, while bonds and cash would have provided a negative real return.
Even better, the after-tax monthly payout on that initial R4-million in Mr Price would be a frankly daft R186000-odd today. The next best, listed property, would be providing about R57000 a month. You don't want to know about the others - they'll make you cry, they're so bad.
I'll tell you anyway.
Bonds provided a steady R24000 a month over the 10-year term, chewed up by inflation. Even worse, you'd be getting about R8000 a month from your Anglo pot, less than you would have been earning 10 years ago. That's an annualised loss of 1.3%, albeit less horrid than the 7.7% a year you'd have lost if you'd sat on cash. Quite sobering, that.
Right, so what's the next big thing, then? Pick a theme, any theme ... Okay. With my (hypothetical) R4-million, I'm going all-in with my old army nemeses: The Dutchmen. All of them: Capitec, Naspers, Zeder, Remgro, BAT, Richemont, PSG, Sanlam, Steinhoff and Shoprite.
Why? Because I can. It's my play-play money and I'll do with it what I smaak.
See you on my imaginary yacht in 10 years, ek sê.