NEWS & OPINION
28 February 2021
VERY BRIEFLY
PROFILE PHILIP BRADFORD PORTFOLIOMETRIX, HEAD OF INVESTMENTS SA
How did you get involved in financial services – was it something you always wanted to do? After university, I spent a year in Chicago, the home of the world’s commodity exchanges. Some friends of mine were floor traders and took me onto the massive trading floor surrounded by huge brightly coloured pricing screens. As I walked around the trading pits, I was fascinated by the traders in multicoloured jackets placing their orders by shouting and waving their hands at each other. It had the energy of a live sports event and I knew then that I somehow wanted to be involved. I then started reading everything I could about investments and trading, and luckily got a job with Investec Asset Management in their investment call centre. It was humble beginnings but a foot in the door.
What was your first investment – and do you still have it?
My first real investment was when I bought some Dimension Data shares in 2000. It was at the height of the tech boom and, like now, there was a lot of hype around tech shares. I was very lucky to sell the shares before the price collapsed dramatically – a good lesson that I carry with me today.
What have been your best – and worst – financial moments? Probably my worst investment was buying a piece of vacant land in a game reserve. For me, any asset that doesn’t generate a cash flow shouldn’t be considered an investment. My best investments have been low-risk investments that are offering high and certain returns. These are usually bonds that have sold off dramatically. A low-risk investment with a high guaranteed return allows an investor to confidently invest a much greater portion of their wealth than they would into a speculative investment. For example, you should
never put most of your wealth into what you hope is the next Tesla or Bitcoin, but you can into a high yielding bond when there is very little risk of permanent loss. I always ask myself: Would I borrow money to make this investment? That forces me to look for low-risk investments with a high rate of return.
What do you tell investors who are worried about their investments due to SA’s current economic environment and COVID-19?
Investment markets are forward looking and in the short run can behave very differently and often move in opposite directions to the economy. Investments factor in bad news and future good news very quickly. Ironically, you can make the most money in investments when things go from ’very bad’ to ‘just bad’. A good example of this, at the moment, is SA bonds. Our economy is weak and the outlook is poor, but our bonds are reflecting this bad news and some are offering over 12% interest.
What’s the best book on investing that you’ve ever read – and why would you recommend it to others?
I have read many, many books on investing, trading, behavioural finance and the history of finance. You will not learn everything from one book but I would recommend The Most Important Thing by Howard Marks. However, the most important ‘reading’ in my career was studying for my CFA Charter. This was the hardest thing I have ever done, but was also by far the investment that continues to pay the best dividends.
I ALWAYS ASK MYSELF: WOULD I BORROW MONEY TO MAKE THIS INVESTMENT?
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After 15 years at the helm, 10X Investments’ founder and CEO, Steven Nathan, has resigned in order to pursue other interests. In a statement, the company says that in line with 10X’s succession plans, its Executive Chairman, Henk Beets, will assume responsibility as acting CEO. A search for a permanent successor will be launched as soon as practicable and an appointment will be announced in due course, the statement adds. “On behalf of 10X, we’d like to thank Steven for his contribution to the success of the company and wish him well in his future endeavours,” Beets says. “I will work very closely with 10X’s strong and experienced management team to ensure that we continue to deliver on our promise of providing our clients with superior investment outcomes through our simple, low-cost and transparent offering.” Old Mutual Private Equity (OMPE) and DiGame Africa (DiGame), together with the management team, now own the substantial majority interest in the company. “OMPE and DiGame have been partners in 10X since 2017 and will continue to support the company to allow it to achieve its long-term strategic objectives,” the statement says.
Franklin Templeton has announced the launch of its new Investment Institute, an innovative hub for research and knowledge-sharing that will unlock the firm’s competitive advantage as a source of global market insights. Stephen Dover, currently Head of Equities, has been named Chief Market Strategist and Head of the Investment Institute. Terrence Murphy, CEO of ClearBridge Investments, will take on an expanded leadership role as Head of Equities for Franklin Templeton. “With these appointments and the launch of the Investment Institute, we are doubling down on what sets our firm apart – unmatched insight and research from experts on the ground in over 70 offices around the globe,” says Jenny Johnson, President and CEO of Franklin Templeton. “In this time of significant uncertainty, we are uniquely positioned to help clients find signal amid the noise. Whatever the issue, whatever the region, we will marshal diverse perspectives and proprietary analysis to best serve our clients. I am thrilled to have Stephen Dover leading this new effort.” She continues, “Terrence Murphy has done a phenomenal job at ClearBridge, and I know he will be very effective in this expanded role. More broadly, this appointment Stephen Dover demonstrates our commitment to propelling the business forward by harnessing the great talent across our organisation.” Dover and Murphy began their new roles on February 1, 2021. Both will report to Johnson. Terrence Murphy
