Sunday, March 23, 2014

Beware of performance fees...

A quick thought for the day...

So often you hear that you need to align your fund manager’s interests with your own interests as the investor. So the financial services sector came up with this thing called performance fees. The pity about fees is they are offset against any income a fund pays its investors. You therefore run the risk of having nothing to re-invest in your fund as the fees in some years will be far greater than the income received from the underlying investments. (this is because the Total Expense Ratio of most general equity funds is higher than the dividend yield before fees)

Ah, but you counter surely if the performance fee is high it means my investment has performed well… alas you are correct over the short term but a vast majority of that return is what could be termed speculative return… just remember your friend the market can take that back (in nominal and/or real terms) very quickly.

In my humble opinion, I think the more conservative and BETTER approach is to make investments that pay a decent level of income that grows with or above inflation over time. I can then use that income to buy MORE units of investment and great long-term growing wealth. Just a thought.

The below chart simply shows the difference in re-investing dividends and not re-investing dividends.

Sunday, September 1, 2013

[Opinion] So what if the market crashes...

When the average investor buys a stock, he or she sits back for some reason and hopes to see the latest purchase climb steadily upwards. Unfortunately, far too many of us buy a stock only to see it drop in price after the purchase. It is almost as if the market has conspired against us, and this drives home how very difficult it is to time the market. So, if we cannot time the market, would the next best thing be to just spend time in the market?  

To illustrate this concept, imagine the unthinkable happening: your stock drops 20% or more the month after you have bought it. Armageddon! But is it really the end of the world? This is not necessarily the case for investors whose objective is to earn a healthy return in excess of inflation over the long term. These investors have a long-term horizon and invest in what I call dividend Payers & Growers™, the companies that consistently pay dividends and consistently grow their dividends year in and year out.


Wednesday, June 12, 2013

[Investment how-to] 15 Steps by Philip Fisher

There are plenty of books out there with the so-called "secrets" of investing. "Common Stocks and Uncommon Profits" by Philip Fisher is one the better ones. He succinctly sums up his investment criteria into 15 points. He often refers to the "Scuttlebutt" approach which means you need to get away from you desk and actually speak to and interview relevant people. Definitely a book worth purchasing (click here to go to amazon). 

Here are his 15 Points:







Tuesday, February 26, 2013

Welcome to GeoffNoble.co.za

Welcome to my website. Doing this sort of thing does not come naturally to me. I am generally the guy working in the background. So you may ask why this page? I think its purpose is to provide a medium for me to air my views and promote my own personal brand.

I work as a Portfolio Manager and I am a great proponent of what we call a Payers and Growers investment strategy. I am somewhat disillusioned with the traditional asset managers that exist in the world. For me investment is all about meeting the goals of your investors. You have a fiduciary responsibility to always act in their best interests - something that is not common place in the financial services industry (well at least I believe so).

So what will this blog entail? I think it will be my thoughts on investing and the world in general. I don't pretend to have all the answers. I believe the world is a very uncertain place. I do believe, though, in having an opinion - right or wrong.

I also don't expect thousands of followers here - I am just some young kid in South Africa!