Weekly Thoughts 26 May 2017

Last week in my first mail around the topic of ‘Mechanics of Investing’, I said there was basically two forms or types of investing: Debt or Equity. Lending your money out or buying something to own. This week and next week I am going to write just a paragraph on the philosophy, the ethic, of investing. Thereafter I will write another more technical letter.

Saving and investing, could be seen as the simple process of deferring gratification now, in order to receive a benefit of sorts in the future that is rightfully yours. No more and no less. It could be seen as giving your savings, earnings, disposable cash, to an enterprise that serves you (society) honestly. Thereafter receiving a regular and fair cash payment, or growth in value, in return for doing this.

This simple statement could be the foundation, or the defining truth, of investing. However, I don’t think it is found among the industry’s conventional wisdoms.

My long weekend away last week in the Lesotho mountains comprising 20 off-road motorbikes with 5 support vehicles and trailers, was made up of an odd-ball posse of a sprinkling of youngsters in their 20s and then predominantly the 50+ brigade. We traversed some of the most remote and challenging passed, drove through the week’s old snow, forded rivers and travelled numerous other long stretches of road making up a 650km trip. Many a road-side stop and fire-side conversation was had. Two stood out for me, conversations that are rare opportunities.

I had the opportunity to meet a Chief Financial Officer from Coca Cola, who is the CFO for the greater Middle East region. He came out specifically to join this trip. We struck a cord and had long conversations. Consumers, products, migration, rates of population growth and decline, predicted population changes over the next 200 years….. and so on.

Then I also met and chatted with the head of the African expansion program of a listed company that handles product delivery for numerous companies. They ensure that the product you want to buy at many a restaurant or retailer is there on time. I asked about trucking logistics, price margins, profitability, the consequence of a truck sitting at a border post for 48 hours, 24/7 operation problems, why the chosen African countries were chosen…. etc.

Really good to talk to people working in such senior positions in listed companies that the fund managers I use look at to buy. I learn a bit about the far side of things. Otherwise simply a privilege to be up and out in a beautiful landscape.

See Picture in Things of Interest.