I’m not sure how well this will go down with some of our long-standing readers — particularly those accustomed to my conservative value investing bent. But I have been seriously mulling a weekly cryptocurrency report in the FM.
Surely it’s overdue? It can’t be long before financial advisers are making a default recommendation of putting 10% of savings into crypto — much like the traditional quota investors were told to reserve for gold. I’m quite certain this crypto hedge might already apply with high net worth individuals.
Before you accuse me of being a Johnny-come-lately, I can at least claim to have published one of the first serious local financial reports on bitcoin — way back in June 2011 when I was in charge of the now defunct Finweek magazine.
Technology boffin Simon Dingle approached me with the bitcoin story idea. At our weekly writers’ conference my senior colleagues — including the late, great economics writer Greta Steyn and veteran investment scribe Vic de Klerk — thought I’d completely lost the plot. Though it was an informative and easy-to-read story, most readers were perplexed ... and nearly all were entirely dismissive of the bitcoin premise.
At the time Simon wrote the story bitcoin was priced at $8.85. I don’t need to tell you how rewarding it would have been to have put a handful of bitcoin on your credit card
I’m not sure the story coaxed any readers into diversifying into crypto — but it’s worth pointing out that at the time Simon wrote the story bitcoin was priced at $8.85. I don’t need to tell you how rewarding it would have been to have put a handful of bitcoin on your credit card.
Personally, I still battle to get my head around cryptocurrencies, even though I have spent hours with experts who explained the intricacies of blockchain and other curious mechanisms. But despite the old market adage never to invest in something you don’t understand, I recently — albeit reluctantly — took a small punt on cryptos.
I bought a basket of the coins — minuscule fractions of a bitcoin and ethereum, a single solana, two litecoin and a few dozen XRP. Some youngsters at the tennis club advised me (not so politely) to dig into “really sick” crypto offerings such as tron, cardano, ton and chiliz. I even took a much-maligned meme coin or three (yes, I have the dreaded dogecoin).
Quite honestly, it’s the most fun I’ve had since betting against the Proteas in every major cricket tournament. Avalanche — where I invested a princely R500 — was up 13% at the time of writing, fetch AI 11% and pepe almost 10%. I have high hopes for shiba inu — a lesser pedigree of dogecoin — where I forked out the equivalent of the price of a padel game and got almost 3-million coins in return.
Now, if the medium-term price predictions for some of these meme coins — which seem entirely legit (coughs loudly) — come close to materialising, then my already delayed retirement plans will be considerably expedited. Probably, though, best not to make any grand plans ... just yet.
Speaking of strange currencies (and two small caps I have a passing interest in), I was intrigued to see a few creditors of a fledgling junior miner agreeing to swap a not-insubstantial debt into scrip.
Three creditors of the Langpan chrome project, who are collectively owed R23.4m, have taken scrip in JSE-listed Mantengu Mining in lieu of cash. I think negotiations would have been telling — remembering that ambitious mining start-ups such as Mantengu carry equal measures of risk and reward.
Interestingly, one of the creditors was a subsidiary of JSE-listed technology services group 4Sight, which does have a fairly large concentration of customers in the mining sector. 4Sight OT Automation received about 3.7-million Mantengu shares at 86c a share. 4Sight could, at the time of writing, have made a quick return if it had managed to sell the shares on the market.
4Sight CEO Tertius Zitzke confirms it is not part of the group’s strategy to be a long-term shareholder in Mantengu. Still, it will be interesting to see when, and at what price, 4Sight — which presumably has some insight into Mantengu — will sell out. For the record, 4Sight, AS Sure Investments and Rustgold Transport now collectively speak for about 13% of Mantengu. The trio could bring some pressure to bear if Mantengu falls short of production and profit milestones.
Moving from milestones to millstones, Zeder, the PSG-aligned agribusiness investor, continues to grind its way out of existence. The group — which once housed iconic agri-assets such as Pioneer Foods, Kaap Agri and the beloved KWV — will soon be left only with its holding in seed and agri-input conglomerate Zaad. Not that Zaad is a minor holding, with a latest value of R2.26bn. I would not mind seeing Zeder remaining listed and transforming into an operational company through its 97.2% holding in Zaad. Makes, I think, for an interesting addition to our ever-crimping small-cap universe. Seems such a scenario is unlikely with the Zeder board still engaged with third parties on Zaad. Possible outcomes might include disposing of individual assets in Zaad’s portfolio.
It looks like a sad ending to what was a noble effort by PSG to corral a fragmented agribusiness sector. I really can’t see any listed counter snapping up any of Zaad’s assets … Unless Crookes Brothers is really, really determined to reduce its reliance on sugar, or in the unlikely event of York Timber or Omnia Holdings feeling particularly adventurous.
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