So depressingly, as it turns out, last week‘s potential with the db x-tracker etf turned out to be, indeed, a data glitch. Happily, as you might have heard (I have, after all, written about it three times in four posts), African Bank’s share collapse wasn’t a data glitch. But that’s a bit more risk than I would suggest anyone take on.

Some tables for the individual investors:

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Here’s what those look like in a graph (not including the Art Enthusiast):

Screen Shot 2014-08-13 at 8.15.21 AMIf you take a look at that red line (the Naspers share), you’ll see why it’s often so attractive to buy individual stocks – especially if you manage to buy stocks at the turning point. And it’s why, if you look at the monthly investors (who keep investing monthly), the Recent Finance Graduate investor is winning the race by miles:

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As he should be – it’s well risky to keep everything in one or two main stocks. And those big risks can pay off big. They can also lose big. But that’s the way it goes sometimes.

A Word In Defence of the Art Enthusiast

So I have a confession to make: I’m an Art Enthusiast.

I mean – I also believe in the Satrix and in shares as productive assets. This is where I put money regularly. And in case I haven’t made it clear before – my real belief is in the power of the saving habit. It’s not about the instrument – it’s about the regular increment from your debit order.

That said, I think there is a time and space for the well-positioned investment in art and collectables. Most people look at these areas and get scared off by all the subjectivity. And it’s true – there is some subjectivity.

But there is less of it than you think.

And I have two ways of looking at it:

The Cynical Economist Viewpoint

I don’t know about art’s intrinsic value, but I understand its value in use. If you can find a piece of art that has general appeal (which you can – relatively famous artists can be trawled from many an auction listing), then you can capsule large amounts of value in a frame. And art is generally sheltered from varying forms of tax – probably because it would be an administrative nightmare for any revenue service to try and keep track of it. It’s also highly transportable and (relatively) easily stored. Finally, from a forward-looking perspective, we seem to be doing nothing about the wealth inequality situation. If you follow the money, then the wealthy people are going to get wealthier – and in general, they quite like status goods. Status goods like art and collectibles. Especially if they come with a side of tax benefit.

The Optimistic Economist Viewpoint

Some works of art have identifiable intrinsic value. It’s not about landscapes and portraits – the really interesting art is interesting because it’s revelatory and representative and speaks to sentiment. And because we live in a world of sentimentality, those works are sought after. Some sentiment is more universally felt – and therefore appeals to a broader range of people. Those works have more money chasing them – and therefore, they have higher value.

The reality is likely a combination of both. And if you go to an art auction, you see sentiment and wealth standing side-by-side, attempting to outbid each other (have a read of Jayson Goes To An Art Auction for more).

Either way, I’m just pointing out that in the profiles up top, I had my investor buy something that I would not buy as an investment piece myself. I would have used my smartphone and checked and seen that it was only worth $100 or so. And then I would have walked away.

Because the important thing to remember is that there is always something to buy – and there are so very many nice things. And if you visit secondhand bookstores on your way back from doing a grocery shop, and keep your eyes open, and your smartphone fully charged, then you can pick up really good little deals. It’s not every time, but often enough that it’s entirely worth it.

Moving on

Here’s the South African dashboard:

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The exchange rate strengthened slightly. Maybe because everyone was so happy with how quickly and precisely Gill Marcus took control of the Abil situation?
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Yields went up – possibly a reaction to the risk the SA Government just took on with the ABIL story. Although I’m a bit fixated – I’m blaming/crediting almost everything on ABIL.
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The oil price stayed rather boringly consistent
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Pulled up by Naspers?

Until next week.