ANALYSE THIS: PSG Wealth’s Ricus Reeders
We analyse Ricus Reeders, portfolio manager at PSG Wealth Sandton
If someone came to you tomorrow with R100m to invest in just one company, which would it be?
That question calls for a one-in-a-million decision, but then again author Terry Pratchett wrote that million-to-one chances work nine times out of 10, so if that is the case I would choose investment trust Scottish Mortgage. Its philosophy is based on the principle that it’s far worse to miss out on an opportunity than it is to make a mistake here and there when buying into a company. It has been doing this for 110 years and in that period had to reduce its dividend only once — during the Great Depression, in 1933.
What’s the wisest thing you could tell your 20-year-old self that you didn’t know when you started out?
The present is far more valuable than the regrets over the past or anxiety over the future.
Facebook, Twitter or Instagram?
Twitter. It’s a bit like standing in a crowded room with people taking turns to scream something into your ear, but as a way of keeping up with news it’s fantastic.
If you could fix one thing in SA today, what would it be and how would you start doing that?
I would address red tape and unnecessary legislation — have two regulations scrapped for any new one written.
Who do you admire in the investment community, and why?
American fund management team Barry Ritholtz and Josh Brown, for their sensibility, insight and at times very amusing commentary.
What’s the worst investment mistake you’ve made?
I suspect I have made them all, more than once. But not learning soon enough the value of having an exit strategy in place before investing must be the biggest.
What’s the best investment you’ve ever made? And how much of it was due to luck?
Calling it luck is a bit random, but considering how chaotic markets (and life) are, getting into and out of EOH, mostly in time, was a lot more than I could have wished for, or foresaw at the time.
What was your first job? And can you remember how much you were paid?
I trained as a pilot in the SA Air Force. I earned about R500-R700 a month.
What is your greatest extravagance?
After all these years, it’s still to squeeze in behind a drum kit and make music with a bunch of very talented guys.
Big Tech or old-fashioned industrial stalwart?
My achilles heel is people doing "neat" things. My inner nerd has always been attracted to companies that are at the forefront of technology and products. But what I really appreciate is growing dividends and the cash flow to sustain that growth. And companies in either sector can give you that.
SA or offshore?
Spreading risk through geographies and currencies is sensible — offshore must be a part of the investment decision.
How much of a portfolio should be for the wildcard picks?
It depends on what percentage of your assets you are prepared to write off — immediately. Knowing what the loss will be when you have to sell according to your stop-loss level tells you how many times in a row you can afford to be wrong. Risking 10% of your assets at a time leaves you with about six bad decisions in a row to reduce your investment by half. Personally I don’t venture more than 2.5%.
Art, wine, rare books or cars?
My partner is a publisher and loves books and reading even more than I do and as a result we live in a house that is basically a library.
Would you buy your primary home or rent?
Considering my thoughts on the necessity of offshore exposure, it seems risky to have one’s (normally) biggest asset locked in one country. I suspect renting is a more sensible choice.
If you weren’t a fund manager what would your dream job be?
I am one of the very fortunate few who have managed to have two dream jobs. When I couldn’t continue flying, the world of investments seemed interesting. I had no idea that years later it would still be so meaningful and such a joy to be involved in.