I dialled into a presentation given by my father, David, on the lessons he’d learnt from 50 years on the Johannesburg Stock Exchange.
As a journalist, part of my job became to seek out the greatest investors, large and small, who deployed sophisticated strategies while I learnt the virtues of diversified portfolios and alternative asset classes.The majority of great minds I have interviewed say that stocks are expensive, if not outright excessive. Equities do not seem like an asset class to go all-in on.
He explained how many of the once wealthy South African families had lost their money not by gambling in the stockmarket, but in fact, by failing to do so.They’d retired or sold their businesses for small fortunes, but persistent inflation whittled away their purchasing power. My father determined from that experience that preserving nominal capital was not enough – a buffer was required. The only way to build one was to pick winners in the sharemarket.
They had backed a man called Anton Rupert by buying shares in his business, Remgro, and they never sold a single stock. Remgro is an investment company thatThat stock too had always been considered "expensive" by analysts, but delivered returns of 13 per cent per annum over 20 years making these humble folk incredibly rich by any standard.that can consistently grow earnings.