Once a year, we must stop everything, tally up the scores and see who got it right. Besides, what’s the point of going through all this effort, if you cannot point to the scoreboard, and flaunt it a bit. (https://pracap.com/2023-position-review/ )

As can be seen from the graph above, my sister’s portfolio enjoyed another good performance during 2023. She was up 28.3% vs the 7.9% of the JSE ALSI Total Return (TR) Index. The JSE ALSI index was up 5.3%. In other words, she beat the SA stock market by more than 3X during 2023. During the last 5 years her portfolio’s CAGR was 18.3%, and the CAGR for the last 10 years, 15 years and 18 year period can be seen in the table below. The effect of this long term compounding performance is that for every R100 000 of her money that she entrusted to me at the end of 2007, is now worth c. R 1000 000-00, a 10X, and more than 2X the market. 

I hope she is satisfied. In terms of my own portfolio NAV performance, where I tend to take a bit more risk, I had one of my best years, up c. 44%.

Given the abuse and mockery I have had to endure from a certain hedge fund this year on X, I thought to include the relative performance of their fund, as well as that of arguably the best hedge fund in SA imo, namely the Peregrine High Growth Hedge Fund. This is the first time I have compared my investment performance against one of the biggest ego’s in SA’s investment industry, who’s leader is always very quick to tell you that he has made more money than anyone else in SA’s markets. So my dear sister can rest assured that although the yellow line is close, and a respected and formidable competitor for her precious money,  she is comfortably ahead of the Big Ego since their 2014 retail inception offering !

Here’s to wishing a happy new year to all. May you live long and prosper.

Roll on 2024 !

After last year’s stellar performance of 29.2% , the JSE ALSI Total Return (TR) index this year delivered a modest 4.4% return, while the price only ALSI index returned –0.9% (negative 0.9%). (Yes, don’t discount the importance of dividends, it matters, a lot ! ) Against this background and broad market comparable my sister will hopefully be happy with her 13.2% return for the year, outperforming the ALSI TR Index by 8.8%.

As can be seen in the table below, the last 5 years she enjoyed a Compounded Annual Growth Rate (CAGR) of 18.5% vs the market’s 8.14%. In other words, she outperformed the SA market on average by more than 10% per year the last 5 years.

Her cumulative performance since 2008 as reflected in the graph below, is nearly double that of the market. The last 5 years her portfolio more than doubled in value, with a total return of 133% vs the 48% of the market, or put another way, 2.8 times better than the market. Long may it last !

Investing is one of those endeavors, where if you keep at it, don’t blow up and keep learning every day, you should be getting better every year. My goal and hope is that I’ll live long, and if I’m fortunate to live as long as legendary investors Charlie Munger or Warren Buffett, and still be as witty and smart as them today at their respective ages of 99 and 92, I will have won the lottery of life imo.

My own overall liquid investments net worth increased by c. 15% in 2022 across all strategies and accounts. My new aggressive portfolio which I started just more than 2 years ago, enjoyed a less robust but still satisfying performance this year, up 44% vs the c. 100% of last year, contributing meaningfully to my overall portfolio performance. The cumulative performance for the last 2 years is c. 200% as can be seen from the screenshot below.

Lastly, I wish all my family and friends a happy new year in 2023.

May we all live long, invest well and prosper !

So to summarise and reflect, below is a table showing my sister’s portfolio performance since 2007. Her last 5 years CAGR (Compounded Annual Growth Rate) was 17.33% vs the 11.33% of the JSE ALSI TRI, a healthy 6% outperformance per annum. On a 10 year and 14 year timeframe she also scored good outperformance vs the index. Hopefully she is satisfied with this alpha achieved over the last 14 years and has not yet regretted backing this plaasjapie (farmer) back then.

(Update : There was an error in the formula for the 2011 line which has subsequently been corrected in the 2022 year’s post )

People sometimes ask me how my own investment performance looks like, and although I like to take more risk than my sister does in her portfolio, it’s also difficult to compare because I have various investment strategies in different accounts. It’s perhaps more useful to say that my liquid investments net worth increased by c. 30% in 2020 and by 35% in 2021 across all strategies and accounts.

Below is the performance of a new account of a new company of mine that I have opened at a new stock broker, DMA, to try out since October last year. The strategy in this account was to try to be a lot more aggressive and short term orientated. In other words , to be more like a short term trader than a longer term investor. This trading mentality has always been against my natural instinct or inclination as a “value” type investor, but then again I have also met some very good investors and traders the last few years which have opened my eyes to more shorter term opportunities that I have not always given much consideration or attention to. The last 15 months till end of December 2021 was great, and I have managed a return of 131%, and 94% over the last year’s 12 months to 31 December 2021. If I can keep compounding at these levels in this account, I’ll happily pay the higher tax rate !

Finally, here’s a toast to the new year of 2022. As my favourite investor, Charlie Munger, likes to say, “I only want to know where I am going to die, so I never have to go there.”

May we all live long and prosper !

Pleased, but slightly frustrating, is how I would describe my investment performance during the last year. I hope my sister is happy with the performance during 2019 of the part of her money that I have managed for her the last 12 years. Twelve years ago when I offered to do it, I suggested she keep half at Allan Gray which was the most well known investment manager in South Africa at that time with a great long term performance record. I was afraid then of being too presumptuous and would perhaps not be able to beat the index and the well known big asset managers over the long term. I thought it prudent that she not put all her eggs into one basket so to speak by backing an unknown investment plaasjapie (farmboy) .

Her portfolio enjoyed a 15.12% return in 2019 vs the 5.2% return of the Allan Gray Equity Fund or, in other words, 3 times the return of Allan Gray. The overall SA stock market as measured by the All Share Index (ALSI) increased by 8.24% in 2019.

I see many opportunities in the SA stock market currently and am excited and eager to make the best use of them in 2020. Here is to a great new investing year and prosperous 2020 to all !

My sister’s account performance

The SA stock market, as defined by the JSE FTSE All Share Index (ALSI) delivered a performance of -11.87 % for the 2018 calendar year as on Friday 28 December 2018, which was the JSE Broker Deal Accounting (BDA) month and year end for most stock broker client accounts.

I don’t manage money professionally for other’s, except my own and close relatives, like my dear sister Janine. I’ve managed to increase the value of her account by 29.81 % in 2018, for an outperformance of 41.68 % vs the market. The past 11 years her account has increased by 327 % vs the 81 % of the market, or 4 times better than the market averages. She is understandably very, very happy to say the least. Long may it last into the future.

Compounding is a truly a wonderful phenomenon, and the secrets are simple, IF you have the discipline to abide by them. Save, by living well within your means, invest, and finaly, live long. As Charlie Munger put’s it so well, ” All I Want To Know Is Where I’m Going To Die So I’ll Never Go There “. It’s simple, but no one is saying it’s easy !

Here is to a prosperous and happy New Year for everyone in 2019 !

A few years ago when I mentioned to a friend, who is also a well known professional assetmanager, that I manage the money of my sister as well, he exclaimed that I should not do such an irresponsible thing !  I told him at the time that I do not see any reason why not, as I was ( maybe a little bit naively ) confident that I could outperform the professionals and the indexes over time.

Ten years have now passed since I made that commitment to my sister, and the above graph is the result of my effort over that time.  Each R100 invested by her in her brokerage account have grown to R331-10 for a 12.72 % compound annual rate of return (CARR).  This compares to the R233 her money would have been worth had she invested all of it in the Allan Gray Equity Fund which was one of the top performing funds at that time, or the R119 had she invested in the RE:CM Equity Fund which was also touted as a “rock star” performer fund in the media at the time.  Had she been able to invest in the ALSI Index directly (without fees !), her money would have been worth R205 for a CARR of 7.47% .

I hope she is happy with this performance, as personally I think I could have done better, was it not for a few mistakes and lost opportunities along the way.  I have also never had her cash position under 30% at all times, which is very conservative, especially considering that I measure my performance against pure equity funds and indexes which tend to outperform cash returns considerably over a time horizon of 10 years.

Let’s see what the next 10 years bring.  I am excited for the future as I think I am just getting better, more knowledgeable, more experienced and more diversified with alternative strategies I have learned to implement.  It is all very hard work though,  but I am committed to stay humble, to keep reading , and learning from others .  I love doing this and there is nothing else I would rather do !

Happy new year and good luck in the markets !

In most cases a picture tells more than words can.  However, it is sometimes insightfull to know the facts and story behind such picture.  This is the graph of the investment portfolio than I have managed (for free for now) for my sister the last 7 years.  She has always had her money invested with Allan Gray since many years ago when I advised her that I think they were some of the top money managers in SA at the time.  A few years back I said to her that I think I can do better, but did not have the confidence, or the verified track record yet,  to ask her to entrust all her investment money to me.  So I said she must devide all her savings, existing and future,  50/50 between AG Equity fund and her own share portfolio, which I would manage for her, in the same manner as I do my own funds.   She will own the investment account in her own name and have 100% access to it to see exactly what is going on and where the money is at all times.

Every year this time I write a short “report” for her on how her investments performed vs some of the well regarded professional money mangers in SA, as well as vs the Equity Indexes.  I always experience a little bit of anxiety beforehand, mainly because before I do the numbers, I don’t actually know how I have done, since I do not keep score throughout the year.  I hope I have not disappointed her up to now, and she has not fired me yet, so she must be happy.  I am only joking though, as my sister is the perfect “client” who never bothers me during the year regarding her investments,  which allow me the discretion to do things as I want, and as I do with my own money.

For 2014 her portfolio grew by 18.7 % .  The JSE ASLI-index was up by 7.6% and the TOP40-index by 6.5%, so an 11-12% outperformance.  I have to mention though that I don’t think I have ever gone below 30% cash levels the last few years and the avg cash position in her portfolio was probably around 40 – 50 %.  So my “benchmarks” is probably a stretch considering the 100% equity of the index and some of the Equity Unit trusts.   I think I am very conservative in nature and did not see too many “sure bets” in the market.

I also benchmark against 2 professional money managers whom I hold in high regard and have a lot of respect for, Allan Gray and Piet Viljoen of RE:CM.  The AG Equity fund was up 12.2 % in 2014 and the RE:CM Equity fund down 7.5 %.  Looking back at the last 7 years, her portfolio performance was more than double that of the indicies and the professional money managers.  So all in all I think a satisfactory outcome up to now.  My aim is to have a full 10 year period to evaluate against.  Lets see what 2015 holds.

For a nice interactive explanation, visit The Scientific American .

Various reports have surfaced about microbiome transplants that have cured diseases or illness that doctors have been unable to cure with normal SOC (standard of care) such as anti-biotic courses. These procedures are cheap and effective without the use of countless courses of very expensive anti-biotics. Some of these procedures are even done by patients themselves. There is the story of a patient, told by his doctor, who cured himself from chronic otitis externa in his one ear by transplanting ear wax from his healthy ear into his “sick” ear. Read the story here.

Another research report just published recently document how scientists have been able to prevent sinusitus infection in mice by having the mice sniff certain lactobacillus species which protected the surface of the sinus and evaded infection by the corynebacterium species. For a good interview with one of the researhers listen to the clip or read the transcrip here.

Of course, the father of modern medicine, Hippocrates (460-370 BC) have said more than 2000 years ago that “All diseases begin in the gut”. So this is certainly not a new concept, although it has been largely ignored in mainstream medicine in favour of drug treatment which is far more profitable ! With the internet becoming more and more a part of everyday life, more published information became available to ordinary people and doctors alike. The increased access to information about the research and findings of doctors and scientists in this field of the human microbiome spurred a renewed interest in understanding the role it plays in our everyday health and how possibly to cure some diseases.

There are many more diseases that are being cured by “transplanting” normal healthy microbiome from donors to those who are sick. The last few years “fecal transplantation ” have been used to cure diseases in the gut like C. Diff (Clostridium difficile), IBS , Ulcerative Colitis and Crohns . There may be many more that we would be able to cure in the future once we better understand what bacterial mismatches in our gut or elsewhere in our microbiome is out of balance.

Specifically in the case of C.diff infections, there is a doctor in Australia, Dr. Thomas Borody , who is achieving 95% success rates with curing C.diff with fecal transplants. He is also achieving success rates of above 50% with UC and Crohns at the CDD where he works. From wikipedia, At the CDD there were indications that FMT could benefit other conditions including ulcerative colitis,[26][27] autoimmune disorders,[28] neurological conditions,[5] obesity, metabolic syndrome and diabetes,[13] and Parkinson’s disease.[6]. While Dr. TJ Borody was experimenting with patients that were afflicted by both CDI and Parkinson’s disease, he realized that after fecal therapy the symptoms of Parkinson’s in his patients began to decrease; some to the point that the Parkinson’s could not be detected by other neurologists.

Recently, a team of scientists performed a transplant of synthetic “fecal matter” called “RePOOPulate,” into 2 patients using a colonoscopy, the same way a fecal transplant is performed. This synthetic matter is made in a “Robo-gut”, a lab-like system that mimics the conditions inside a human gut. The procedure was successful and both elderly women were symptom-free within three days and tested negative for C. diff six months later. This is a big breakthrough and point to more such procedures in the future to cure not only C.diff, but possibly many more other related bacterial diseases. To read an interesting article about the breakthrough, click here and for the scientific publication, click here .

I believe this new field of the human microbiome could be the next frontier of medical research where significant breakthroughs are going to be made in the next few years in finding cost effective cures for many of today’s popular diseases.

Another very good article to read : Economist article on human microbiome

Some more media articles on FMT :
http://seattletimes.com/html/health/2020149085_fecaltransplantxml.html

If I can’t beat the full time professional fund managers, and the market indicies, I should really be doing something else. This always was, and still is, my motivation for putting in the time and effort. Above is the 5 year performance of my sister’s share portfolio that I manage for her. In what was arguably one of the toughest 5 years in the market, which included the “Great Resession”, I managed to double the value of her portfolio and beat the performance of the stock indicies and some of the best fund managers by more than 3 times.

Hopefully I can repeat this performance the next 5 years and well beyond that as well. I feel I am getting better and learn more every day. Even after doing my own analysis and managing my own money for nearly 20 years now without the help of a stock broker, there is always something new to learn about different businesses and the people that manage them.

When my middle son was diagnosed with Type 1 diabetes in May 2012, his life, mine and our family’s changed forever. The past few months I have spent most of my time researching the subject of Diabetes and specifically nutrition. I have come to realise that nutrition is probably the most important factor in living a long healthy life. I have never before give too much thought to nutrition, except the dogma of conventional advice, “eat low fat, high carb diets “.

What I have learned in this time has brought me out of my hibernation of blogging. There is a message that needs to be told. The conventional wisdom is not working and the world population is getting more unhealthy as a consequence. This is bad for investments and bad for our health.