Bitcoin and other virtual currencies: Investment or gamble?

The purpose of this article is to highlight important aspects that investors must consider as virtual currencies have clearly become the new “flavour of the decade”.

One of the first questions a potential “investor” should answer is, “Why do I want to invest in Bitcoin?” If the real answer is, “I want in on the action and to make a lot of money like everybody else!”, be very careful.

This may be the greedy part, that lies hidden in all of us, driving you towards putting some of your hard-earned money into virtual currency, which may very well have shown spectacular returns up to now. However, before you part with your money, based on past “performance”, consider this statement by Benjamin Graham, author of The Intelligent Investor:

“While a trend shown in the past is a fact, a “future trend’ is only an assumption.”

How many investment schemes, which have all promised extraordinary high returns in the past, have eventually exploded in the faces of people who could least afford it – even recently? How many times do we say after losing our money, “I should have known! When something looks too good to be true, it probably is”? Will history repeat itself as thousands of people, some of them even registered financial advisors, buy into, and express “expert opinions” about investing in virtual currencies such as Bitcoin, Darkcoin, Peercoin and Feathercoin? Again, Benjamin Graham warned:

“Those who do not remember the past are condemned to repeat it.”

World famous investor and investment manager, Warren Buffett, thinks coin offerings will end badly. “People get excited from big price movements…,” he said. Buffett remains sceptical, saying: “You can’t value bitcoin because it’s not a value-producing asset.” He added that there’s no telling how far bitcoin’s price will go and described it as a “real bubble in that sort of thing.” [See  this link]

Jacques Plaut, Portfolio Manager, Allan Gray Equity Fund wrote: “We are always looking for good ways to preserve capital and earn returns for clients. We do not think bitcoin is an instrument which will enable us to do this… “I see some similarities with previous bubbles, but all the signs are not yet there.” Neville Chester, manager of Coronation’s Aggressive Equity strategy explained: “Bitcoin generates nothing. It is a speculative investment in that the value of a Bitcoin is determined only by the price someone else will want to pay for it.”

According to National Treasury, the Financial Services Board and the Reserve Bank, while virtual currencies can be bought and sold on various platforms, they are not defined as securities in terms of the Financial Markets Act. Bitcoin and other virtual currencies are not regulated, and Treasury has clearly stated that there are no specific laws or regulations that address the use of virtual currencies and consequently, no legal protection or recourse is afforded to users of virtual currencies.

According to Anton Swanepoel (financial services industry thought leader, speaker and author), “I have seen more than my fair share of hype in the financial services industry over the last 28 years to get very nervous when I hear how many people are buying into these currencies. It is during times like these that Warren Buffett’s advice comes to mind:

‘Be fearful when others are greedy…'”

So – are cryptocurrencies an investment or a gamble? At this point, they are a gamble.

Lessons Learnt from Investing in 2016

Having recently read a report from the CEO of PSG Asset Management, Anet Ahern, here are a few key pointers that our top minds in the investment sector will be carrying with them as we start 2017.

1. The best investment decisions aren’t always the most comfortable

During the first two weeks of 2016, a few of the top investment vehicles were down between 8% and 10% – the worst start to a year ever. All three indices would eventually add to their losses after a modest rebound, hitting their lows for the year in mid-February. The US market then staged the biggest quarterly reversal since 1933… from these lows!

Here in SA, our All Share index had a similar start, and rose by 16% in just four months to reach its high for the year in June. But that’s only part of the story…

It was during those panic-stricken weeks that shares such as Imperial, Glencore, Anglos and FirstRand were on sale at levels which
subsequently provided returns of between 30% and 300%. What was needed to make the right decision to invest in these shares at that point?

  • A calm, unemotional, measured approach.
  • Deep knowledge of the companies in question.
  • A solid assessment of their long term value.
  • Cash to invest, whether in a separate income portfolio or as part of the asset allocation of a multi asset or flexible fund.

2. Shares in good companies don’t need a good economy to show excellent returns

It would be fair to say that economic conditions have not been ideal for the likes of Imperial. Yet, an investment in this company at the low in January 2016 has produced a return of around 70% to the end of November 2016. This is because the market is often short-term oriented and frequently extrapolates current events and conditions into the future, creating extreme under- or overvaluation.

In other words, investors often fail to take a long-term view, and they overreact to short-term pressures. This creates opportunities, as is evident with Imperial.

3. Our institutions are holding up so far

By the skin of our teeth, some will say. But the fact is that the large South African institutions which served to help us retain credibility in the eyes of the world mostly worked for us in SA when it really counted.

We had a peaceful and fair election and our finance minister managed to hang on to his independence.

The Reserve Bank delivered on their inflation targeting mandate. While there are many instances of poor delivery and corruption, we learnt that our key institutions stood the test of 2016, which was no mean feat.

4. All countries have their issues, and major events will happen

Italy’s referendum led to the resignation of their prime minister. Brits voted in favour of leaving the EU, and Trump amused, horrified and surprised the world. We saw a failed military coup in Turkey. Oil hit a 12-year low, and gold had its best quarter in 30 years. Japanese bonds traded at a negative interest rate for the first time ever while Apple sales fell for the first time in almost 13 years. While investors around the world try to get their mind around these as they happen, we try to focus on seeing the bigger picture and taking a longer-term perspective, while doing most of the work from the bottom-up.

As always, hindsight can serve to make us forget how hard it was at the time to stay calm and make the right decision.

This is only possible if you have a solid framework to start with, be it around the way you research and assess shares, or the way your long-term investment strategy is crafted.

Slow Down. Appreciate.

If you’re anything like me, you may find that after you’ve had a holiday… you feel like you need a holiday! Our pace of life is currently so fast that even when we’re on holiday, or trying to take things a little slower, we don’t actually get to relax or rest as much as we would like.

As a result, we find ourselves making decisions and choosing to speed life up so that we can simply have ‘more time’. But speeding up our lives just seems to make room for more things to soak up our limited time and energy.

Here are two things that I am going to be working on:


Deliberately tell yourself, repeatedly through the day “I am not in a rush”. Sure – you may actually be rushing somewhere… but let your mind relax and regain control, even if you are physically rushing around.

Not feeling rushed will place you in a mental place from where you will be able to consider more choices and ultimately; make better decisions,


When you are purposeful about slowing down the pace of your thoughts and your approach, you will find the space to appreciate what surrounds you. From your relationships to your possessions – you may even find yourself moving from a sense of feeling like you don’t have enough to a confidence that you already have all that you need and that anything else new is a bonus!

If you have hit the ground running, and are already feeling like you may lose your balance, try to restore that balance by slowing down and appreciating.

If you want to slow down with a chilled cup of tea or coffee – just drop me an email and let’s catch up!

New Year Spending Tips

If you want to change the way you’re doing something, if you want to improve or adjust or if you simply want to bring about a new direction – changing the way you think about something is the first step!

Many of us begin our
new-year-financials with a hope to saving more money – and as the year progresses, we find that we haven’t achieved this goal as well as we would have liked. Whilst there are many factors that influence our saving – one key area is how we spend our money… because that determines how much we have available to save!

So let’s begin this year, not with ideas on how to SAVE money, but focussing on wiser ways of SPENDING our money!

Understand your monthly instalments

Don’t assume that your debit orders will remain the same. Most policies increase in January – especially Medical Plans. Make sure you have enough money in your account before the debits run so that you can avoid paying penalties on late fees, and protect yourself from overspending.

If you need to, changing the day that the debit orders run might help you manage money at the end or beginning of the month.

Debit not credit

Make a habit of using your debit card instead of your credit card for everyday purchases. That way you can make sure you don’t overextend your credit this festive season. The simple rule should be: if you don’t have the cash available, you can’t have the item.

Keep an eye on sales

The first few weeks of the year are often the absolute best time to get huge savings! This way you can spend considerably less and still fill your trolley.

Most stores offer sales from groceries to clothing to gift ideas. If you see gift options that will work for birthday presents – grab them now when they’re on special and save yourself spending double later in the year.

Remember, miserly spending makes for wiser saving.

Rest. Relax. It’s all in the mind.

Experts say that you need at least 14 days of leave from work in order to begin to properly relax. But often that is a luxury few of us get to enjoy. I’m not referring to leave where we still have access to our emails and check them once a day or have a phone call or two from the office here and there.

I mean a complete break, with zero work contact.

This means that many of us need to find ways to relax ‘faster’, and hope that we can rest in the time that we have off. You don’t have to pay for a holiday at the coast, or go to luxury spas.

You can focus on getting your mind into a restful, relaxed space so that you can recharge.

READ A NEW BOOK Our digital environments lead us to experiencing most of our reading on a backlit screen. This is not restful, and is not relaxing. If you want to read for leisure, a paper book, that has the smell and feel of your old school library, is a sure way to start resetting your emotional, cognitive and spiritual center.

PAINT/GARDEN/BUILD Creating something out of the ordinary is a superb way to bring yourself back to your own self-energising state by making something that never existed before. It could be a painting of a landscape from your memory, or maybe you create something new in your garden by planting some new shrubs and flowers and decorating with some natural wood or rusted iron sculptures.

Maybe you can start a project with your kids where you build a dolls house, or a model plane or a cardboard fort that fills the whole garden.

When last were you able to listen to some music without any
interruptions? I don’t mean when you are driving in the car, or working at your computer, or have it on in the background whilst cooking.

I mean; lying on your back, your eyes closed, and the music playing.

Whether it’s old music that brings memories flooding back, or brand new music that creates new memories, if you are able to stick those headphones in, take 30 minutes to yourself where you lie absolutely still and listen, you will find your brain will start to disconnect from work and explore new thoughts that will leave you inspired and feeling rested!

Gobble. Gobble.

The festive season is so festive because we do too much, spend too much… and eat too much! We try to fit in as many social events as possible, because we have so many people that we want to see; and we spend so much money because we want people to spoil our family, friends and ourselves!

But we also often land up eating lots of foods that are richer and a little more special than our normal daily diet. One such food is Turkey. Whilst you may enjoy the odd shaved Turkey sandwich, cooking and eating an entire Turkey is mostly reserved for that meal where the extended family is seated around the table and are all digging into the celebratory meal.

If you are considering Turkey this year – here are some facts that few people know about this game hen.

The pros

  • Turkey is a rich source of protein.
  • Skinless turkey is low in fat. White meat is lower in kilojoules and has less fat than the dark meat. A typical turkey consists of 70% white meat and 30% dark meat.
  • Turkey meat is a source of iron, zinc, potassium and phosphorus.
  • It is also a source of vitamin B6 and niacin, which are both essential for the body’s energy production.

The cons

  • Turkey can be high in sodium.
  • Turkey skin is high in fat.

Turkey tips

  • If you can, buy organic. Turkeys raised organically will have been treated humanely and are less likely to contain pesticides and herbicides.
  • A turkey roast is cooked properly when it is piping hot all the way through.
  • Turkey dries out quickly, so don’t overcook it.
  • If marinating turkey meat, put it in the fridge straight after you’ve finished, as it is highly sensitive to heat.
  • Store turkey separate from any gravy, stuffing or raw food.
  • Refrigerated turkey will keep for about one or two days. If it is already cooked, it will keep for about four days.

Before you indulge in a rich meal this festive season, do yourself a favour and have a glass of water about 10 minutes before you eat. It will help you eat less and reduce your chances of over-indulging on richer foods that may have you wishing your eye hadn’t been bigger than your stomach!

Employee Appreciation Tips

At the end of the year, there is often a heightened expectation to show appreciation to one’s staff. Whether they help you out around the house or run your company, most of us have people who work for us and feel a desire to show them

Whilst paying out bonuses is a common way to do this, not all employers can afford to pay out bonuses and may feel stumped as to how to motivate their team and show them the love they so very much want to.

Here are some tried and tested ways to appreciate your staff without needing to necessarily up your overdraft.

SURPRISE BREAKFAST Without warning, when they arrive at work – take your team out for the morning to have a lavish breakfast on your dime. Depending on your budget, you could choose anything from the local Woolies cafe through to a wine estate or fine dining establishment nearby.

Breakfasts are a great way to treat your staff but they are also a space where you can have some quality personal conversations and find out how their families are doing – and talk about non-work topics that you never really get to do in the rush of the day.

EXTRA TIME OFF As you near the last days of work, you can let your staff leave at lunch time. This way, you are still able to keep your doors open until the most opportune moment, but your staff are able to start entering the holiday spirit, maybe run some errands before their leave, so that they can rest and relax during their time off and return to work energised and creatively ready to tackle the new year!

Giving them half-days will most likely have very little impact on your bottom line, but it will have a big impact on your team in terms of feeling appreciated!

ONLINE APPRECIATION Take a look through some online flower/gift delivery websites, and have some surprise gifts delivered to the office. The novelty of having something delivered at work, that is for you, from your boss – has huge appreciation value!

Whatever you do, let your team know that they matter… and that you care!

Road Trip Bliss

For most South Africans, December will include a road-trip of sorts. Whether it’s an hour or two up the coast, or 15 hours across the middle… we live in a country that is too beautiful not to explore in our time off.

So how can you use your hours on the road to your advantage?

Watch your posture Did you know that sitting in a car naturally makes you moody? Joint research from Harvard and Columbia found that low-power poses, like sitting down with your arms crossed, lowers levels of testosterone, reduces your feeling of power, and increases your levels of the stress hormone cortisol compared to high-power poses like standing.

This is why it’s also good to roll your shoulders, sit up straight, and switch drivers (or stretch your legs) every couple of hours. You will be less cranky and way more conversational!

Hold hands (if driving with your partner…)
Even though you’re confined to your own seat, holding hands with your partner, or holding their leg whilst they drive, helps strengthen your bond, and releases neurochemicals that create a relaxed atmosphere. Touch can help break any barrier of tension or confusion, especially when you have to deal with stop-goes or changes enroute.

Be willing to take detours Beyond talking, sharing new experiences can bring you closer together. Luckily, road trips are ripe for novelty: Take the scenic route or stop at cheesy roadside attractions that you would normally include in your holiday. Not only will this keep the trip fun and exciting, but it’ll give you new things to talk about.

Disconnect for the ride We’ve become conditioned to turn to our phone when we’re bored, but one of the biggest blocks in conversation is electronics. Researchers speculate the gadget reminds us of the wider network we could be connecting with, keeping us from focusing on the people right next to us. Unless your kids are watching movies or playing games on devices in the back, try to keep everyone engaged with the journey and other travellers in the car. It also helps to keep the driver alert when people are engaging them in conversation.

Listen to new music New music stimulates the creative impulses in the brain, excites us and keeps us awake as our brain assimilates all of the new
information. It’s also a great opportunity to listen to the full album that you’ve been wanting to listen to, but can’t find the time to appreciate in full!

Have savoury and sweet snacks, and plenty of water
Make sure you have a variety of snacks as your body will move from needing sugars to needing salts and all the while needing to stay hydrated. These don’t only keep your appetite sated, but they help you stay awake and alert!

Also – if you get stuck in a traffic jam, your next food pitstop may turn from 1 hour away to several hours away. Have extra refreshments on hand – hungry, dehydrated travellers are cranky and difficult!

Lastly – never be in a rush. Even if you are running late, remind yourself to take it slow and carefully. You will get there eventually, and then a few hours won’t matter any more.

Christmas Gifts… Sorted

Every year it seems like Christmas gets closer and closer, and December seems to disappear without warning. Before we know it, it’s a few days before the big day and our gift cache is looking too meager for our liking.

So here is my solution: buy online through Takealot!

But not at the last minute… start browsing today! Every day, they post their daily deals that have an average of around 40% discount. But if you buy several gifts at once, you can score free delivery and make several other key savings too…


If you’re not the impulsive type, and don’t want to buy on the spot – you can still save and make some excellent gift choices. Take a few days to browse, starting today, and then add the ideas you have to your online Takealot wish list. This is a super way to compare gift options and then increase your cart to avoid paying for delivery.

After you’ve taken the next few days to build up your wish list, check back in on Friday and check out your final choices. All things being equal, your delivery will arrive early the following week – without you having to go anywhere!


If your cart total is higher than two-hundred and fifty rand, you will save yourself R65 or more on delivery. But – you will also save on not having to drive to the shops, spending an hour or more in the different stores and then having to pay for parking!

If you’re buying for several people, you’ll easily cap this amount and save yourself money and the time and stress of December fever.


Here’s the link:

Visit every day if you are a prolific bargain hunter! From coffee makers, cast iron cookware and binoculars, to fashion, sports, tech and toys – this page will certainly not disappoint. But remember, you have to buy on the day and ensure you spend over R250.

There are several other reputable online shopping options for South Africans, but I’ve found Takealot to have the quickest delivery time, which – in December – is crucial!

The power of positivity and a good plan

Have you ever told yourself, “When I have more money, I’ll be happier”? How about, “I’ll never be able to pay off this debt”? These sort of toxic money thoughts are holding you back from financial success – and happiness! A good financial plan needs to be attainable and measurable, those expressions are neither.

The first step to a financial plan is both the hardest and the easiest – it’s the starting point. The point where you measure how deep you are so that you can calculate what you need to do to get where you want to be. Measuring your budget is usually a huge relief for most people, your finances are no longer a mystical figure floating in the ether, you have defined an attainable and measurable goal.

You need to rescript your brain into thinking positive and actionable thoughts. Here are some tips to help you along your way:

Get good advice
Getting good advice and being reminded that what we want to achieve IS attainable does wonders for an attitude of success. However, you will also need to keep your end-goal in mind.

A good way to do this is to pick out a positive phrase that acts as a sort of rule-of-thumb. For example, “Is this [potential purchase] better than a family vacation / new car / bigger apartment?”

Don’t Rush
One study showed that the farther away a goal seems, and the less sure we are about when it will happen, the more likely we are to give up. Consistency is key.

Use numbers and dates to measure WHEN you want to achieve your goals by. And work out some smaller, short-term goals along the way that will reap quicker results. Paying off debts or saving a certain amount, for example, can leave you with a great feeling of pride and accomplishment. This increases the likelihood of you keeping up your good financial habits.

Dig in your heels
Not next week. Not when you get a raise. Not next year. Get started today – and don’t let up!

Need some good advice? That’s why I’m here. Let’s get in touch!