Mar 19

Equities or Everton

We know that a spiraling interest rate, 50% up on a year ago, and the complexities of the Credit Act have taken an axe at house sales, but its really a bit rich to try and get people to put all their golden eggs into chicken coups, even if they are made of bricks and mortar!

It also begs the question, is this blatant promotion of a single asset class bordering on asset management? If it is, then should not your friendly neigbourhood estate agent be licenced as a category two discretionary asset manager under FAIS? I will leave that one for you to decide.

On another asset class altogether and one a little nearer to home as far as I am concerned, equities, I have an interesting analogy.

As a life long Evertonian (we brave few that support the number one club in the City of Liverpool!), as well as a long serving registered asset manager I know there are great similarities between the two, seriously! Well ok then, not actually Everton, who have only just become top quartile, but sports clubs themselves and football and rugby clubs in particular.

Equities we know and love as a home for our own and our client monies. We manage and build portfolios, much as a soccer manager builds his team, and just like football each member of that team has a different role. A certain stock is a defender, strong, durable and reliable. Others are our strikers, a little more unpredictable but when firing on all cylinders they outperform and lift the entire group.

But the most important lesson we can learn from sport is that it is the team and the sport itself that we truly support and enjoy, not the individuals within it!

Players come and go, hero’s are worshipped and then forgotten, the same must apply to your equities. Remember it is the asset class and the markets that will perform for you, do not become too emotionally attached to any particular counter, they all have their day.

On sport, but a non financial issue (apart from what they earn!), why could Naas Botha be worshipped for playing overseas and Wayne Ferreira encouraged to do so, yet today rugby players must stay in SA or be prejudiced against?

The Presidents Cup, in Golf, has just had a South African team made up exclusively of men who play outside South Africa.

Oh I hear some of you shout, but that’s where they earn better money, that’s where they needed to go to better their game, that’s where  hang on what is the difference? Let the boys travel, learn and earn, what harm can it do? They all go to Europe anyway and that’s an overnight flight on the exact same time zone!

So finally, well done to all in the World Cup, but remember it’s the sport we love most! Never buy “the market” or a “football club”, be selective with your team choices but know when it is time to switch players, never become too emotionally involved and, always ALWAYS be nice to that mate who can get you Cup Final tickets!

Even Granny Grundy doesn’t keep all her eggs in one basket, so when I read a leading estate agent advising people that their entire investments can be held in property I was a touch surprised.

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