Growth assets disappointed in the recent past. It is understandable that some investors may want to give up. But only looking backwards may lead you to the wrong conclusions. Recent Outcomes Were Weak Recent experience has planted doubt in the minds of some investors as the risk-return trade-off did not hold. The truth is that…
In my first article in this series about behavioural investment, I looked at some of the cognitive biases and emotional responses that prevent investors from optimising returns from their portfolios over the longer term. I mentioned the cognitive bias of ‘loss aversion’, the human tendency to avoid the possibility of losses today even at the…
The news that South Africa has moved into a technical recession has rattled the rand and the local stock market at an already volatile time. As we survey the market, we find it helpful to look at the circumstances causing the rand to weaken as well as what has happened in other periods of rand…
Following the turbulence of the UK Brexit vote and the election of Donald Trump as the president of the US in 2016, the geopolitical climate has shown few signs of settling down. The rise of a populist government in Italy, heightened trade tensions between the US and China, and a currency crash in Turkey are…
A question I commonly encounter from persons with foreign trusts (the Applicant) who applied for relief under the recent Special Voluntary Disclosure Programme, 2017 (SVDP) is, “should I keep the trust?” The answer to this question, in my view, lies in understanding the benefits of the trust during the lifetime of the Applicant (if any)…
The good news is that we can all improve our decision-making when we understand the mostly unconscious thought processes that lead us to make poor choices. One of the most common mistakes we see, even among well-informed and sophisticated investors, is the pursuit of quick wins and the aversion of short-term losses rather than adhering…
Energy drives industrial revolutions The Fourth Industrial Revolution is coming in the next decade, and no, contrary to the breathless rhetoric of the likes of the World Economic Forum, it is not centred on robotics and artificial intelligence as significant as these advances are. Rather, as with all previous such revolutions, it will be driven…
To quote Berkshire Hathaway’s Warren Buffet, who has delivered strong and consistent returns throughout more than half a century of bear and bull markets: “The world was uncertain on December 6th, 1941, we just didn’t know it. The world was uncertain on October 18th, 1987, we just didn’t know it. The world was uncertain on…
In 2017, the Nobel Prize for Economics was awarded to Richard Thaler, who is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business. In many quarters, Thaler was a controversial choice. For some in the profession, the idea that…
