2 minute read
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.
