Keeping the house view from the less scenic side of Lighthouse Road in Kommetjie steadfastly on the long-term horizon gets more difficult by the day.
Whippersnappers and novices persistently and openly question the wizened “asset manager” … sometimes they taunt and tease. I have previously referred to my offspring enjoying early successes in the markets: my son, thanks to his stoicism in US tech shares (though he tells me that this week he took a “healthy profit” off the table), and my daughter, thanks to painting her portfolio Purple (and making some incredibly inspired choices in her tax-free savings account). They don’t pore over their portfolios every evening, calculating future yields or agonising over speculated outcomes. This makes them less inclined to tinker. Tinkering, I dare say, has cost me big time over the decades.
Speaking of which … My wife has recently taken a more active interest in our savings — especially our smallish equity exposure. My single-digit annual return for 2025 so far does not impress her one iota. After taking the trouble to explain the complexities of some of my deep-value positions, she had the gall to ask why I don’t just “follow the suggestions in your own magazine?”
Me? Follow advice? I had to ask (in a most facetious tone): “So, dear, which shares would you buy then?”
Swiftly she replied: “Shoprite, Stadio, Capitec and Boxer.” Aside from Stadio, I have never indulged in even the briefest dalliance with any of these shares. But I reluctantly agreed to divert dividends to accumulate the said stocks, figuring it would be a small price to pay for a big lesson.
Big lesson, indeed. The three-month (and even 30-day) returns on the lofty quartet do — as the family regularly point out — comfortably outstrip my doughty-dozen shares. To add insult to injury, I only bought Capitec and Boxer for the family portfolio, so you can imagine how much flak I got when the private university developments were touted last month and when Pick n Pay’s results showed just how formidable Shoprite is as a competitor.
I won’t take this lying down, though it’s already been suggested that there is an air of desperation to my recent flutters on such “growth” shares as Weaver, Lesaka and ASP Isotopes. Hell, I might even have to grope for some Optasia, the newly listed fintech business.
For the record — and for the crypto enthusiasts — I somehow stumbled on Zcash. That has been my saving grace in these threadbare times
For the record — and for the crypto enthusiasts — I somehow stumbled on Zcash. That has been my saving grace in these threadbare times.
Thankfully, there was another small victory this week. To adapt the old Hemingwayism (again): you unlock value gradually, and then all at once. Take a bow, EPE Capital Partners. The investment company now looks set to release its underlying value to shareholders in fairly short thrift after receiving an offer from a financial institution to acquire the portfolio constituents left over after the sale of a good portion of its shareholding in Optasia.
The discount to EPE’s newly stated NAV of 939c a share is a sliver at 12%. Punters who dipped into EPE at 360c in mid-2024 will be euphoric, given that they would have also done rather well out of the group’s unbundling of its holding in investment company Brait (whose share price has more than doubled over 15 months). But let’s not forget those long-term holders who snapped up EPE shares at listing in August 2016 at R10 a share. The group raised R1.8bn at listing and has a market value of just over R2bn. It’s been a rough ride for the original backers, and even with the unbundled Brait shares factored in, the returns over nine years are nothing to write home about.
And to close with some sad news. The FM was only last week lamenting the flurry of delistings in recent months, mainly among the small caps, then yet another possible departure was signalled on Monday. Security technology group ISA Holdings advised shareholders of a nonbinding expression of interest for control. It’s hardly a surprising development — not when you have a company that has been perennially profitable and dividend-paying for the best part of 30 years. ISA will be a valuable cash-spinning cog in a larger tech business. I wonder who the buyer is. I always thought ISA might add another leg to a small tech conglomerate such as PBT.
It is a pity, though. For retail investors, the 9% yield is more than nifty. What’s more, ISA was an exemplary micro-cap with lean management structures, an unerring strategy and reassuring cash flows. Management also showed remarkable pluck and resilience some years ago when the carpet — in the form of a software licence agreement — was suddenly pulled out from under its feet.
No pitch price has been disclosed yet, and, as ISA warns, a deal may not even materialise. The last time I looked, about 65% of ISA was held by just a handful of shareholders, including longtime CEO Clifford Katz. The market seems to suggest ISA might be worth close to 210c-220c a share, though I would be surprised to see the large shareholders let go of this little dividend dynamo for that price.
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