Buying a house, renovating and then selling it (called "buy to flip") can be one of the most rewarding investments for property investors…
You buy an old home for say R1 million, spend R250,000 on renovations and then sell it for R1.6 million or more.
Most investors believe the biggest secret behind a buy to flip is getting the best deal on materials for your renovation.
That's the b... ››› more
The biggest lie you'll ever hear in the stock market is that: “As a private investor you're not smart enough, and you lack the information to invest and make money on the stock market.”
It's a lie presented by fund managers, personal financial advisers and media analysts alike.
Obviously, they don't say it quite like this, but it's what they mean.
The essence behind their big lie i... ››› more
“The JSE is too expensive, rather buy these offshore stocks”, if read this headline, and variations of it many times in the past year.
Yet, my Red Hot Penny Shares readers would've banked an average gain on shares we sold of 22.21% in 2016.
Whilst there are still calls to drop the JSE and put your money elsewhere I am optimistic.
I believe 2017 can be just as good, or better, than ... ››› more
As an advisor to the South African Investor board I deal with investors that are looking for long term returns that'll help them live, and retire securely.
That means we typically look at companies like Vodacom, Naspers, Bidvest and the like.
Large blue-chip shares that have been around for years, and will continue to be there for years to come.
Recommending these large companies is th... ››› more
Consolidated Infrastructure Limited (JSE:CIL) is one of those buy and hold for a decade shares.
The company had a mere R8.32 in net assets in 2011. Today they stand at R21.62 - nearly 200% growth.
CIL also grew revenues from R1.4 billion in 2011, to R4.5 billion in 2016. That's a whopping 221% revenue growth.
And it's profit growth has been just as remarkable as it rode the wave of exp... ››› more
Please don't let your portfolio fall because of this single mistake…
In 2014, I got a mail from an investor:
I'm not investing in a single investment recommendation of yours again. I've bought Mr Price shares with my whole portfolio. And at the rate it's going now, I'll retire in a few short years.
I bought Mr Price at R136 in February, and now that it's August, the sha... ››› more
I call it platinum fatigue…
Eight years ago, platinum hit $2,200/ounce.
It subsequently crashed to $800, recovered to $1,500 and dropped back to $800 again in 2016.
Everyone's basically given up on platinum, there's just been too much drama for the metal…
Did you even notice that platinum is up $100 since December 2017?
On 26 December 2016, Platinum was at $894 per oun... ››› more
A week ago I was nearly convinced low-cost RA's are the way to go. I read a well written article on the web, promoting the virtues of low-cost RA's.
The article uses the following example:
Someone has saved R3 000 every month for 40 years into a retirement annuity (RA), and earns a return of 6.5% above inflation.
If you pay an investment fee of 3% you'd end up with R3 million at the end ... ››› more
As I predicted last year, 2016 was a year of consolidation. Our market went nowhere. But shares are much cheaper today than they were a year ago.
And that makes me optimistic about 2017.
But there's one industry in particular that I've got my eyes on.
It was arguably the worst sector for 2016.
One of the worst droughts in decades hit South Africa. Farmers lost crop... ››› more
“Francois, our neighbour wants to sell his house. We'd like to build a little property nest egg of our own. Should we buy his property?”
That's a question I received from a family member over the holidays.
I'm sure you've been faced with a similar situation.
Looking at a property that's for sale and wondering whether it would be a good idea to buy it and get started with your very own... ››› more
When you first decide to invest in a property the excitement pumps you up. Your heart starts racing, you already see the cash rolling in…
But before your ambitions run away with your good judgement you should take a step back and evaluate whether the property you're looking to invest in will provide you with growth - or is it a cash-trap that'll suck your wallet dry.
What to look for in ... ››› more
The producer price index, non-farm payrolls, new housing starts, gross domestic product….
The list of economic indicators released monthly is massive.
The South African Reserve Bank alone releases a four-page report with more than 110 different economic indicators each month. That's not even considering international indicators.
So, which of these indicators should you keep an eye on, a... ››› more
The JSE All-Share Index is just 10% off from its all-time high.
It's sitting around the highest PE level of all time for the index, at 23.24.
At the same time, US markets are at all-time highs, and interest rates are threatening to go up.
With this in mind, I was recently asked by an investor, whether the JSE is overvalued and set for a massive correction.
So, should you hold on or sel... ››› more
“Trump will be great for business”
“Trump will make you, and me, richer”
“15 industries that will be affected by a Trump presidency”
Trump. Trump. Trump.
It's the buzz word right now.
Everyday there's a new article on Moneyweb, News24 and Bloomberg telling us how Trump will affect business, the stock market and even the world.
They're telling you this, without a clue ... ››› more
I bought my first rental property at the age of 22. Luckily it turned out a great investment.
But since then I've learnt a lot.
Truth be told, there's a heap of things I wish someone had told me about when I first got started in property back then.
The time, the money it could've saved me... I sure as heck would have gone a lot further a lot faster if I'd had a clue about some things.
... ››› more
Over the past six years I've worked with many estate agents looking to manage my rental properties. And whenever it took time to fill up an empty apartment they'd tell me “the market is slow this time of year”.
They weren't all lying to me. Considering the post-2008 property market it hasn't been smooth sailing for anyone.
South Africa's economy is struggling and people are finding it ha... ››› more
Dischem is due to list on the JSE on 18 November 2016.
The company shared that it'll probably list at a price of R16.25 - R20.25. If demand for its shares is too high, it could increase the listing price.
Now, I must say, Dischem is a great business. It's doubled its number of stores since 2010, and tripled them since 2008.
It's clear that Dischem can take major market share from other co... ››› more
Right now, there are at least 26 suspended shares on the JSE.
If you own one of them, you'll know you can't sell your shares and there's no hope of growth coming from them.
If you're incredibly lucky you might receive cents on the rand for your investment.
But, if history is anything to go by, your cash will be tied up for years, and you might as well write off your entire investment!
... ››› more
On 29 September 2016 Wescoal announced it would issue 124,995,373 new shares to a BEE investor, for an amount of R211,410,862.
At the time Wescoal's entire market cap was R440 million. So this is a big deal - it is nearly 50% of Wescoal's total share capital being added.
Usually a deal that dilutes earnings as much as this one will, is a bad thing.
Shareholders don't like it.
But since... ››› more
I'm sure you've seen what too much sugar does to a three-year-old…
They become hyper-awctive. They stop listening to all reason.
And as soon as the effect of sugar wears off, they hit a low. Until the next hit of sweetness.
You might be doing the same thing to yourself when you invest.
No, it's not that you're adding too much sugar to your coffee.
The mistake you might be mak... ››› more
Disclaimer Note that FSP Invest, a division of Fleet Street Publications (Pty) Ltd, is a research house and not a registered broker, financial advisor or financial service provider. Our editors and customer services teams also do not give personal investment advice. The advice in this website is general advice only and may not be appropriate to your particular investment objectives, financial situation or particular needs, so before investing or if in any doubt about your personal situation, you should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Board.
We research our recommendations and articles thoroughly, but disclaim all liability for any inaccuracies or omissions found in this publication.
Remember: Never invest more than you can afford to spare and that the value of any investment, and the income derived from it, can go down as well as up. The past is not necessarily a guide to future performance.
Editors or contributors may have an interest in investments commented on in this newsletter. However they have signed restraints to prevent the abuse of their position as contributors to this publication.