If there's no cash in a business, it's dead. The most recent spectacular crash in Steinhoff shares is proof of that.
It is no different for property.
If your property doesn't generate a positive cash flow - the investment is dead in the water.
Choosing to lose money isn't a valid investment strategy
It's all too often that I hear investors say “I'm not making money on the property ... ››› more
I've been looking at ways to reduce my donations to the Nkandla Fund (SARS income tax)…
I have no objection to pay tax - when the government that receives that money makes use of it responsibly. But that's not the case at this stage.
And by putting off paying tax (legally) I can get my money to work for me faster than when I give nearly half of that away to the tax man.
Now instead o... ››› more
On Friday 24 November S&P downgraded South Africa's long term local government bonds to junk rating.
The problem according to S&P is that government in recent years have focused merely on the distribution of income, instead of trying to grow our income…
“As a consequence, South Africa’s economy has stagnated and external competitiveness has eroded. We expect that offsetting fiscal m... ››› more
Northam Platinum CEO, Paul Dunne said in a recent interview with MiningMX “There's been a lot of hype around battery-powered EVs, but these will not replace the internal combustion engine for a number of reasons.”
Now I understand you ‘talk your book'. If you are a platinum miner, you want to ensure people know you are positive of the outlook for the industry you operate in.
But it's... ››› more
I'm sure you've heard it before - but you make money on a property the day you buy it.
That's because a good price means the rental income yield will be attractive, and it means your selling price can be competitive - whilst still raking in a profit.
That's why your homework before buying a property - and the negotiation process to buy the property are the single most important things you ... ››› more
The mainstream media will only tell you about the biggest of the big shares. You'll often hear about Naspers, Richemont and BHP Billiton.
And fund managers will make these big shares the centre points of their investment funds. That is - the Balanced Fund your advisor will suggest you invest in for retirement so you don't need to take much risk.
But that means you can expect 9%, 10% and if... ››› more
Lonmin has been one of the great stories of value destruction for investors.
Since my first warning about the company in 2012, it has lost 96% of its value.
Simply put - it's been a big one to avoid.
Crypto Revolution: How the rise of bitcoin and cryptocurrencies could turn every R2,000 you stake into R980k
My warnings on Lonmin since 2012
... ››› more
The rand started out 2017 at 13.78, and quickly strengthened to R12.42 in mid-March.
This would've negated strengthening commodity prices world-wide.
The price of copper, ferrochrome, gold and aluminium all rose during 2017.
But - fortunately for South African producers of these commodities the rand weakened yet again, now trading in the R14 range.
And that means all of these commo... ››› more
When you invest in shares there are two things that can make you money - capital appreciation as the share price rises. And dividends putting hard cash in your pocket.
Most investors focus mostly on capital appreciation.
But the fact is dividends can make you massive returns.
If for instance you bought Adapt IT in 2009, you'd have paid 44c per share. Since then the company has paid out... ››› more
What if I told you there's a way to find shares that consistently outperform the market?
Sounds too good to be true.
But the fact is, fourteen shares I invested in between 2010 and 2016 provided me with returns outstripping 100% each….
In their 2013 paper titled “Fundamental Based Market Strategies”, Dr Angelo Aspris (research leader), Sean Foley, (researcher), Nigel Finch, and Z... ››› more
March 2009 - that was the first time I ever bought a share…
It was Old Mutual. And while Old Mutual was a massive company, the 2008 financial crisis decimated it, and the share became a ‘penny stock'.
I bought my first shares in the company for 603c, with the money I made from vacation work as a student at the mine I had a bursary with. I bought 990 shares with around R6,000.
By No... ››› more
In the past six months, a little known JSE listed company, Insimbi, is up nearly 50%.
And on 26 September 2017, it announced its revenue increased 247%, and earnings per share increased 142%.
Growing profits by as much as 142% in an economy that's in recession is nearly impossible.
But Insimbi achieved this - how you ask?
Well, the company made a smart acquisition at the end of... ››› more
Throughout 2016 and early 2017 Rolfes had a great run, up from R2.76 to a high of R5.
But the share has suddenly dropped in the past two weeks.
A number of investors and analysts attribute this to the fact that the company hasn't released a trading statement.
So what does a trading statement have to do with share price?
The JSE requires companies to release trading statemen... ››› 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
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
“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
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
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
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
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
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.