Fixed Interest is a viable asset class

I heard someone talking on Classic Business tonight. Pity I didn’t catch his name so I can avoid his advice in future. He was saying that he doesn’t see the point in investing in debt instruments.  He explained that the return is low and the risk high since if the company gets into trouble, you’ll …

Pension funds don’t have enough junk

Junk Bonds are debt instruments issued by corporates that have relatively low credit ratings.  They pay interest at high rates as a result. Typically viewed as risky investments, the junk bonds boom of the 80s showed that there is more to junk than just a risky investment. Locally, our pension funds and other retirement savings …

How not to lose money in Make a Million

I have a clear strategy for how not to lose money playing the Make a Million competition. As I explain it, you may come up with some smart tactics to win the competition and enhance your returns, but you’re on you’re own there. So, how does one not lose money with the Make a Million …

Rare monopolies

China is the overwhelmingly major supplier of rare earth minerals to the rest of the world. (South Africa has a tiny share.) Rare earth minerals (or elements) are critical factors of production of many high technology items such as super-conductors, catalysts, rare earth magnets and batteries of the kind used in hybrids and laptops. With …

Implied Pension Return Assumptions and the Equity Risk Premium

When companies value pension obligations and required contribution rates, they make assumptions about the expected future investment returns. (Accounting standards require market-based rates reflecting fixed interest returns, but that’s a separate point). So what assumptions are pension funds making? The WSJ has an interesting article showing that the average US pension fund is assuming future …

Interactive house price data (including South Africa)

The Economist has a brilliant interactive chart showing nominal house price growth across a range of countries, including South Africa. It’s clear, as we already know, that South African house price increases have been dramatic. Somehow though, seeing it on a graph with a range of other countries brings it into sharper focus. Our property …

Clear, Simple and Wrong

The reason opinions are so cheap is that everyone has one and nobody wants to buy anyone else’s. I’m no different. I’m not going to try to sell you mine. I would like to present you with some ideas to think about before you overpay for someone else’s though. Jon commented on a recent post …