My Friends and their money :: Friend one Mr S

Mr S is loud and bombastic – I think, not 100% sure of the meaning of bombastic, but I have never written the word bombastic down before, and now have written it three times.

Haven’t known him for that long – so do not know all the ins and outs – but have the basics. He really is bad with his money and I do not think he is going to have much of a retirement. he earns pretty decent money and with a bit of effort could tun it around, but just does not seem to have the will power to want to. But get’s a bit upset when he thinks of the debt he is in.

A while ago we where chatting and he said he owed various companies around R100K including credit cards – he blamed quite a bit of this debt on an x wife. I suggested should look at consolidating the loan – he might get a better deal as well as making payments and tracking the loan easier. He earns R20K p/m, a good salary out here in the sticks. Pretty cheap living and paying some child support. So would have thought that he could get himself out of debt relatively easy. Say 2 years. He sounded like being in debt was hurting him.

Went round to his house three months later. Now he has DSTV besides a few other bits his collection of toys had grow – and I do mean toys. Little tractors. Turns out he did get a loan and paid of all his debts – then, with a smile on his face, told me how he went about maxing out his credit card again! He said he does not mind dying in debt, as they where stupid enough to give it to him in the first place.

It’s his life, but I find it a bit sad. I wanted to try get him to switch from buying crap, to buying shares. Buying share these days give me more enjoyment than buying most things these day. The value changes daily, I look forward to SENS and get to spend the dividends. I generally, I can sell them and at least get my money back, what else gives you all that?

But there is no hope for Mr S, unfortunately.

Monday 27 July :: The week ahead

Had a pretty good last week – ended up with 58 units. Got lot’s of little jobs done as well as covered two frames – so, as mice can still get under, will soon see if it was mice or birds doing the damage. First frame worked well, but just a smidge large, so decided to make the next frame 1 cm shorter on both sides. Stuffed up royally and made the one side 7 cm longer. An unfortunately, it’s not an easy fix. $#@&**%$ why do I not measure properly!!

1) Weed back beds
2) Weed front bed
3) Water in wifes door
4) Finish tiling front of pool
5) Grout front
6) Prep back gate
7)Rustproof Back gate
8) Paint back gate
9) Load to dump
10) Make new boxes from old frame
11) Mirror frame
12) Pelmet

I think this week can be about the back gate – give it a good scrubbing and paint it. If the weather turns, sort out the new boxes. The wood has been used for boxes for a couple of years and is pretty rotten. So will not spend too much time on them, but might give them a quick paint. Hopefully get two, but might only be one box out of the wood.

Had a bit of a go at my wife for not saying “thank you” when I do a job. It’s a bit like living with a teenager, she does her chores and no more. Anything else is for me, and when I ask her to come hold something for a second it’s as if the world is coming to an end. So it’s a bit frosty at home – which is not the way I want to live, I wish she would just smile a bit more – living with a miserable sod is pissing me off. Anyway, enough of that. It will blow over, always does.

Some mistakes I have made with shares ::

These are just some of the mistakes I have made – ones that I can remember anyway! Writing it down might help me remember and increase the chance of not doing it again.

Buying “cheaper” shares:

Although I did not do it this time, it is something I have done in the past. If you only have R5000 to spend and you can buy 5000 x R1 shares or two R2000 naspers shares – you naturally lean towards the 5000 shares.  I think this is a pretty common mistake. But the actual “price” of the share should have little relevance into you buying it or not. Movement are measured in percentages not in rands/cents.

Hanging on to a bad deal ::

It happens, you buy a share and that figure never get’s in the green or shows no growth. I had it with Imperial, Kumba, Vod, Nampak , Steinhof and I am sure a few others. I think you need to re-evaluate why the share is in your portfolio more frequently – and ask yourself that very important question “would I buy it now?”  if not, it could be time to sell. It’s tough selling though, that’s when your paper loss suddenly becomes real. If you under sided, it might be best just to sell half the holding.

Trying to time your purchase::

I buy for the long term, and the day I get money in the account is the day I spend it. I don’t try time it to get a percent or two off and I also pretty much offer the market price.  I like to make sure that the deal is done then and there; uncompleted deals are a pain and can get expensive. I have had quite a trade where the trade never went red, so pretty much bought at a perfect time. I guess it’s swings and roundabouts – this way is quicker though. That said, trickling money is probably a good thing unless the market has had a sizeable correction, then go all in. On my TFSA I put the R30K in one hit, still in the red after 3 months – could have easily saved 5 – 10%  if I trickled it in monthly, which is how I will do it next year.

Not using your head and following the herd::

When Abil’s share price was crashing, it brought down Capitec’s as well. I knew they were two different companies and bough a small amount when it came down that far that it’s dividend could actually fit into my portfolio. It recovered a bit then dropped again, when Abil was plummeting – and I should have bought again, but in the back of my head I wondered if they were right. Silly, did very well on the first lot though – about 200% in a year. Did simiar with Taste, except I follower the herd and sold (luckily only half) – after a trading statement that was to be expected. Price was up 50% in weeks and re-entered at the higher price.

Swapped of Nampak for Taste ::

Firstly, I was waiting for January to make any changes to my main portfolio because of ABSA’s new “once you make 5 trades get the rest of the year free” rule. Taste, of course, does not pay the greatest of dividends ether, around 2% – so below what qualifies for me as a dividend share.

But, I think they could be an easy 10 bagger. And these days, I think having a bit of CGT on the books is not a bad strategy, we do get R30K per year to use free of CGT.

I think Nampak will do well in the rest of africa, but SA is still it’s biggest market by far – and here things are not nearly as good. The economy needs to grow for Nampak to grow. Not only that, but I thought the barriers to entry was quite high, I have only recently found out that this is not the case.

Taste at the moment rolling out Domino’s Pizza and now have the Starbucks franchise. Both which are going to do very well in SA. They also going to own most/all of the outlets – so more profits and hopefully more dividends. For a while I do not expect the dividend to grow, understandably as they going to need to roll out what, 300 – 500 Starbucks?

I do own it in my small portfolio – had it for a few months and up around 50%, pretty happy – now with the new lot it counts for around 2% total. For me it’s quite a big “bet” – but pretty happy with it.  Will work out avg cost but guess around R4,70. So, let’s see how long it takes to get to R47 – pretty sure it will, happy if it does it in 10 years.

Monday 20 July :: The Week ahead

Last week was an improvement on the previous week – 50 units. Bathroom done and dusted. Critters (not sure if it’s mice or birds) are eating my spinach, grr. So need to make the covers this week. Should be fun, have a couple of designs that I am mulling over. Also need to do a bit of garden maintenance and need to knock a few smaller jobs. Try hit 55 units this week

1) Move fence back to get at water
2) Cut barrel in half
3) finish tiling front of pool
4) Prep bathroom
5) Paint bathroom
6) Prep back gate?
7) Rustproof back gate?
8) Paint back gate
9) Make veg box frames
10) Cover veg box frames
11) load to dump
12) assemble thicknesser/ remove rip saw blade
13) Take old frame and make new veg boxes?
14) Clean gutters?
15) Sort out front yard
16) Finish mirror frame
17) Make new white pelmet.
18) Install windscreen blades

Project :: Bathroom – quick makeover

The guest bathroom was looking a bit tired, but do not really have the funds to totally redo it – I figured painting it might give it a new lease of life. Paint was bought at Game – much cheaper than buying around here. R200 for decent tinted PVA for the walls(5l)and R170 for white ceiling paint. Used max 2L of the walls and 1 l of ceiling – so R114 of paint at the most. Couple of drop sheets – R30. Will reuse on the rest of the house. And a decent paint brush – again, will reuse.

Left is before:

Took a mirror from our bedroom – I do have a spare that needs a frame that I will replace it with. But opens up the room a bit. Really like the new color and I did a good job on the painting – cut in nicely on the cornice. Pat myself on the back.

Left before:

Changed the curtain “header” 🙂 – think it’s called pelmet? Did not like the old metal one. Made this out of wood, but not over the moon with it – thinking something in white might look nicer. Will leave it up in the mean time – but will probably change it.

Overall, was very happy with the change, I took my time and did a “proper job” – my wife, it seems, doesn’t like change – mention anything that I want to do around the house and I get a “why?” or “don’t”. And never a thank you or even it looks nice after finishing. I sometimes wonder if it’s a culture thing – her mom and sister also often do not say thank you. I paid for their breakfast a couple of weeks ago – as a thank you to her sister for bringing something back for me from overseas, not a word of thanks – yet I’ve already thank her a couple of times for doing something that she hasn’t even done yet! Grrr, pretty infuriating. Anyway, I am trying to do jobs because I want to do them and not expect thanks – it helps if I go with that attitude from the outset.

Almost gave up giving up ::

I used to be a smoker. Not a part timer, but a 30 a day, up to a 100 when having drinks ,smoker.  My stress levels would rise when I was in a situation where I could not smoke, a meeting, a mall, a restaurant, a lecture hall. I would start getting tense and find it hard to concentrate – the idea that I needed to smoke right then overtaking all else.

As soon as “escaped” and lit up – I would feel calmer and the weight of the world would lift from my shoulders. Smoking did calm me! Errr, what?? Numbskull, it’s what got you worked up from the start! It’s like a drug that cause AND fixes a problem. Ah well, at least I know that now – it’s never too late…

I found it very hard to give up and tried countless times. My best efforts usually lasted around 2 months by chewing packets and packets of nicotine gum, doing some exercise and giving up alcohol. They always become undone by the reintroduction of alcohol. Every time. I could not break the “bond” I have with the two.

Then two and a half years ago I used Champix and gave up for good. Weirdly, it wasn’t even that much of a battle. I had to watch myself, sure, but it did a great job of suppressing my “need/urge” to smoke. I even broke the alcohol/smoking bond pretty early on – in the first 3 months – initially a couple of drinks with my wife in the safety of home – but it wasn’t long before I could go out again. Occasionally, normally while drinking, I would get a flashing, burning desire to smoke – but these urges would be very quick and fleeting – under a minute. And each time I suppressed them, I felt stronger. I cannot remember having one in the last year. I do not even think about smoking now and other people’s smoke does not really bother me – in fact, sometimes I actually enjoy the smell. Not so much next day though, smoke impregnated clothing get’s chucked straight into the wash!

So after giving up smoking – and loving it – I decided to try giving up drinking. Now I certainly was not addicted to alcohol in the usual sense, I just found it hard to stop after starting. I didn’t become too much of an ass when I had had a few, or start fighting or anything. Maybe a bit more of a “know it all” than I usually am, and a bit louder. But what was starting to hurt were the hangovers. I was becoming useless for the first day, and barely functional for the second – only to reach some sort of normal state by the third. It was becoming untenable (I just wanted to put that word in!) and decided to try give up for a year. I hope that I would grow up in this year, and be able to enjoy alcohol responsibly after it.

It was pretty easy, as said, I do not crave alcohol – it the stopping after starting I have a problem with. The nicest thing was that we started taking the motor bike out every Sunday for breakfast – well, we had bacon and eggs, it had a few litres of petrol – and loved being so clear headed all the time. Went on for 8 months – then I felt I had to open a bottle when I closed my business and retired. The hangovers started soon after.

For a few months I tried to moderate my intake. I would have one or two nights with just a glass or two – but after patting my back and congratulating myself on my new found maturity, I would get hammered and wake up despising myself. This went on for a while until I remember the 8 months previously, when drinking wasn’t an option. Life was just easier without the hassle of trying to moderate myself – cutting it out all together, like smoking, would actually be the easier route.

So that’s what I did a few months back. I didn’t take a note of the date – might have been around February – I am not sure. But I do feel great – not only physically, but all over. Sure, I wouldn’t mind a glass of Merlot or a beer here and there – but really, it’s just not worth the hassle. I might not be an alcoholic in the traditional sense, but in my heart I dol know I am one – and need to tread carefully from now on.

The

Monday 13 July :: The week ahead

1) Set in board along back gate
2) Sort out TV viewing
3) Set in last two veg boxes
4) Move fence back to get at water
5) Cut barrel in half
6) finish tiling front of pool half
7) Connect light above work area
8) Prep bathroom
9) Paint bathroom
10) Prep back gate
11) Rustproof back gate
12) Paint back gate
13) Make veg box frames
14) Cover veg box frames
15) load to dump
16) Clean/prep bakkie for selling
17) assemble thicknesser/ remove rip saw blade half

Not a great week – but did enjoy the tennis – happy that the joker won – he is my favorite. I like Federer – especially that has has an SA connection and spends time here – but he is another player that shows no emotion on court – and I like characters, good and bad. So had the least units completed last week since starting – only 40. Ah well. will am to have my best week this week!

1) Move fence back to get at water
2) Cut barrel in half
3) finish tiling front of pool
4) Prep bathroom
5) Paint bathroom
6) Prep back gate
7) Rustproof back gate
8) Paint back gate
9) Make veg box frames
10) Cover veg box frames
11) load to dump
12) assemble thicknesser/ remove rip saw blade
13) Take old frame and make new veg boxes

The weather is not meant to be great this week – so think I might try to get the bathroom finished this week. Have a couple of idea’s to make it look a bit better – my wife though is, as usual, unenthusiastic – so no change there. They not even going to cost anything!

Main Portfolio Update ::

Share Code Profit (Loss) (%) % of Equities
A V I AVI 34.56 5.89%
ARROW A AWA 24.42 4.33%
BATS BTI 47.57 2.50%
CORONAT CML 9.21 9.09%
CAPITEC CPI 142.07 5.92%
GRANPRADE GPL 17.66 1.42%
GROWPNT GRT 13.79 2.90%
HYPROP HYP 49.48 9.50%
INTUPLC ITU 16.38 3.25%
MMI HLDGS MMI 42.86 2.00%
MR PRICE MPC 53.5 8.16%
MTN GROUP MTN -1.89 4.78%
NEPI NEP 23.56 2.10%
NAMPAK NPK -8.48 1.96%
OLDMUTUAL OML 28.89 4.04%
PERGRIN PGR 59.36 2.96%
REDEFINE RDF 14.08 2.77%
RHODES RFG 11.49 2.10%
RMIH RMI 41.06 3.43%
ROCKCASTLE ROC 44.18 4.20%
RI PLC RPL 32.43 5.50%
SA CORP SAC 17.5 2.68%
SANLAM SLM 13.46 2.03%
SPURCORP SUR 14.05 0.74%
TOWER TWR 1.14 1.33%
VODACOM VOD 13.06 3.38%

Only share I am considering selling is Nampak – but probably will leave it, just hope there expansion into Africa pans out. Other than that had fairly big falls in CML and ROC. ROC, not worried about – I was thinking of trimming CML, an kicking myself a bit for having to much in it – that said, good company, excellent management, good dividend – I’ll probably keep them all. MTN also struggling a bit – but confident they will pick up eventually. 3 of my favorite shares, HYP, MRP, PGR all doing well – if I had to add to a share now though, it probably would be MMI – great divis and decent growth – should double the holding. Could sell Nampak – but would make my financial sector holdings even greater. Could get WHL or Spar.

Power, power where art thou?

South Africa has been having issue’s with electricity for a few years now – basically, the ANC government  stuffed up with lack of planning – nothing new there. That said, they are trying to fix the problem – again, not doing a very good job at it, but I am sure we will have “always on” power in 5 years or so. Have no clue what’s it’s going to cost though.

So we have something called “load shedding” – basically they switch off area’s when they do not have power for everyone. It’s meant to be semi-planned, as in, you will see a message saying “stage 1 load shedding” in which case you can see if your area will be affected – for us 2 hours, for others 4 hours.

Now we have been extremely lucky and have hardly ever been hit, but when we have it’s been between 14H00 an 16H00. No big deal, have a nap and then spend few minutes in the garden. This year it’s maybe happened between 5 – 10 times.

The one time it happened on a Saturday and there  was a rugby game I was hoping to watch – a friend said to come over and watch it there. He just had an inverter linked to his car battery – and of course, a long cord! Worked like a treat, with very little outlay. Anyway, did price a 1000W modified sine wave inverter up, around R1000. But we didn’t really need one – but kept it in mind.

Last night we got hit – 18H00 – 20H00 – had power for 15 minutes, then plunged back into darkness – still dark when we went to bed at 22H30. Had a bad feeling and confirmed it this morning, we’ve been moved to a new load shedding schedule, not nearly as nice as before. Can expect to get hit more often and at horrible times. Time for that inverter.

Looking through Bidorbuy I found a few at just under R700 – but all said 30 – 60 days delivery, well, I know what that means. Go onto Ebay and see I can get the exact inverter for R350 including delivery. That of course get’s me thinking, why not bring a few in and sell the others to cover the expense of my one?

The cheapest I can find in SA is a similar one going for R500 – and I can see he has no problem selling them. So I order four, at the worst I make R150 each on the 3 and get mine for free – at the best I sell for R700 and make R700 on top, enough for a spare battery so we do not have to connect it to the car battery. Brought the wife into the deal as well, share the risk/reward. If it works, will order a few more.

Update: 30/07 – so 20 days have past::

4 arrive by DHL – which was great. Used mine and it worked perfectly. Advertised the others and no real interest @R650 for 2 weeks. Then 2 days ago someone bought all three, then, on the same day, a friend wanted one. Next day, another friend wanted two! Not only that, the guy that bought three says he will take more off me.

Will keep my head screwed on – tried to get a few more from the same company, but their price had gone up alot – so bought two from another company. Will keep looking out for them and try have 6 in the post at once.  But out the previous 4, got a free inverter and made about R400 – just need to get the deep cycle battery now.