Speaker 1: Seven two. You're listening to the best of The Money Show.
Speaker 2: The Money Show.
Speaker 1: Welcome to the best Bits of the Money Show, A
Speaker 1: dietests of just some of the most important insights, the
Speaker 1: best interviews, the best comments really of the show this week.
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Speaker 1: Thank you to start some of the big news stories
Speaker 1: from this week and our President Sahma Pausa in a
Speaker 1: way a move I think that might shake the coalition
Speaker 1: a little bit, removing the Deputy Trade, Industry and Competition
Speaker 1: Minster Andrew Whitfield. He of course belongs to the DA.
Speaker 1: The DA is furious about this. We will hear and
Speaker 1: I think there'll be developments over the next couple of
Speaker 1: days about what will happen next, but also now completely
Speaker 1: unexpected because we don't really at the stage, it seems
Speaker 1: know the true reason for why this decision has been made.
Speaker 1: The Time Group co founder and Ceokun Yonker he slammed
Speaker 1: the decision by the Home Affairs Department to increase identity
Speaker 1: verification fees by six and a half thousand percent. He
Speaker 1: says the move is a threat to financial inclusion and
Speaker 1: digital transformation. The Home Affairs Minister Leon Shreiber hitting back
Speaker 1: at him very hard, completely saying that Yonka had misunderstood
Speaker 1: what was going on, hadn't understood the consultation and interestingly,
Speaker 1: Capitech a big rival of time they supported the Home
Speaker 1: Affairs Department and then the NATO Secretary General. He's a
Speaker 1: former Dutch Prime Minister Mark Rutter. He likened the president
Speaker 1: of the US President Donald Trump to a daddy intervening
Speaker 1: in a school yard fight after the US leader repeatedly
Speaker 1: berated Israel and Iran, including using some language I haven't
Speaker 1: rarely heard from a US president in public. Tonight we
Speaker 1: bring you a mixture of stories from the world of
Speaker 1: money from the week that has been in our conversation
Speaker 1: about how I Make my money. Professor Glenda Gray spoke
Speaker 1: about her incredible career path, her groundbreaking work in HIV research,
Speaker 1: and her dedication to improving public health and the health
Speaker 1: of children.
Speaker 2: And my father worked on the mines at EPM. I
Speaker 2: grew up in. I was born in Broxburg and I grew.
Speaker 3: Up first of all in Boxsburg and then we moved
Speaker 3: to Pastcourt Mapleton and then Wi just outside Nigel, and
Speaker 3: then we moved to a pace called Scarffin's Wrist which
Speaker 3: is just between Springs and Blackpan and I used to
Speaker 3: catch a train from Scarfpinsras station to Boxburg East to
Speaker 3: go to my primary school, Martin School, in the morning,
Speaker 3: so my parents would we would Cataclane a top of
Speaker 3: six in the morning and get to Boxburg East at
Speaker 3: seven and then walk to school so we could save
Speaker 3: our money for ice cream.
Speaker 1: Sure, okay, from what I've read, you were pretty keen
Speaker 1: to be a doctor pretty early. Now, there were not
Speaker 1: a lot of female doctors around at the time. What
Speaker 1: was it about being a doctor that was so important
Speaker 1: to you? It clearly mattered, I mean it clearly matters
Speaker 1: to you still. But what was happening around you at
Speaker 1: the time that made you think it was such a
Speaker 1: strong belief as a young person that you wanted to
Speaker 1: be a doctor.
Speaker 3: That just it's hard to really understand that as young
Speaker 3: as form My parents told me that I told them
Speaker 3: that I wanted to be a doctor. I think it
Speaker 3: happened around the time at that stage when we were
Speaker 3: living on a small holding in Mapleton, a car was
Speaker 3: giving birth and there was a breech delivery and they
Speaker 3: had to use a rope to pull the calf out.
Speaker 3: And the vet looked at me and said, oh, one
Speaker 3: day you're going to be a vet. I said, no,
Speaker 3: I'm going to be a doctor and look after and
Speaker 3: look after human beings. So I guess that was the
Speaker 3: tima particular, and it was around the spirits delivery of
Speaker 3: the of the of this calf.
Speaker 1: Was there something about the power of helping an animal then,
Speaker 1: but helping a human being that the really I mean
Speaker 1: a breach delivery can be very very dangerous, and yet
Speaker 1: you know the animals would both have walked away, I
Speaker 1: mean the car for the first time, we walked away healthy.
Speaker 1: I mean, there's a real power in watching something like
Speaker 1: that take place.
Speaker 3: Maybe it is a huge power, and I think that,
Speaker 3: you know, just being committed to you know, I loved
Speaker 3: animals growing up and as I went to school, you know,
Speaker 3: I did well at school, and in those days in Boxburg,
Speaker 3: if you did well at school a year ago, you
Speaker 3: had become a teacher because you could get adversary and
Speaker 3: you know, and you didn't have to worry about paying
Speaker 3: for your education. And when I told my school Box
Speaker 3: to High that I wanted to be a doctor, that
Speaker 3: kind of smiled endearingly at me, and I guess, you know,
Speaker 3: I was determined, and I applied to Wits University, and
Speaker 3: at that stage this was doing an experiment. They had
Speaker 3: decided to diversify who they brought into universe into medical school, so.
Speaker 2: There were a lot more women in my year.
Speaker 3: They're much more racially diverse, and a lot more people
Speaker 3: that came from in the middle class and working class backgrounds,
Speaker 3: not from private school. So when I went to Box,
Speaker 3: when I got into Wits medical school, you know, it's
Speaker 3: called a very diverse group. But I also struggled because
Speaker 3: I didn't have a good education in my latter years
Speaker 3: at school. We were short of maths and physics teachers,
Speaker 3: and I struggled. So, like a lot of people coming
Speaker 3: into university from education that is not as good as
Speaker 3: private schools.
Speaker 2: It takes a while to catch up.
Speaker 3: So for the first year or two at medical school,
Speaker 3: I really felt stupid. And then suddenly in my clinical years,
Speaker 3: I caught up my peers and was able to compete
Speaker 3: and do as well as people who'd come from better
Speaker 3: schools than in Johannesburg.
Speaker 1: It's so interesting that. I mean, so often it's really
Speaker 1: about getting through the first year or two of university
Speaker 1: and then you start to see people really grasping whatever
Speaker 1: it is and off they go, and that that that
Speaker 1: clearly happened to you. I do want to skip forward
Speaker 1: a little bit because I do want to get to
Speaker 1: some of the other things that you've been involved in.
Speaker 1: But at one point you clearly realize that HIV was
Speaker 1: going to be very, very important in South Africa. And
Speaker 1: when HIV first came on the scene, you know, sort
Speaker 1: of mid nineteen eighties, I don't think many people realized
Speaker 1: how important it was going to bed. Did you. Was
Speaker 1: there a moment when you realized what the AIDS pandemic
Speaker 1: and how many South Africa was going to take, how
Speaker 1: vulnerable we were going to be, how big this thing is.
Speaker 3: I think there were three things that pointed me to
Speaker 3: wanting to do something in HIV. So the first thing
Speaker 3: was I was a student active during a part eight
Speaker 3: and the organization I worked for, which was Health Workers
Speaker 3: association used to organize communities around health issues and with
Speaker 3: HIV emerging, I worked in that sector trying to mobilize
Speaker 3: communities around HIV and.
Speaker 2: And you know, and work with them. And then I
Speaker 2: went and.
Speaker 3: Worked at Barraguaa Hospital and I worked in the main
Speaker 3: ICU and the party thoracic surgeon who was in charge
Speaker 3: of ICU was this brilliant surgeon and I could never
Speaker 3: understand why he wasn't working in the theaters. And he
Speaker 3: was one of the first people in South Africa who
Speaker 3: got HIV and he died in nineteen eighty eight.
Speaker 2: And he was my father worked on the mines at
Speaker 2: e PM. I grew up.
Speaker 3: I was born in Brocksburg and I grew up first
Speaker 3: of all in Bucksburg and then we moved to place
Speaker 3: called Mapleton and then which to outside Nigel and then
Speaker 3: we moved to a pace called Scarffin's Wrist which is
Speaker 3: just between Springs and Blackpan. And I used to catch
Speaker 3: a train from Scarfpinsras station to Boxburg East to go
Speaker 3: to my primary school, Martin School in the morning. So
Speaker 3: my parents we would catchaplane a top or six in
Speaker 3: the morning and get to Boxburg East at seven and
Speaker 3: then walk to school so we could save our money
Speaker 3: for ice cream.
Speaker 1: Sure, okay, from what I've read, you were pretty keen
Speaker 1: to be a doctor pretty early. Now, there were not
Speaker 1: a lot of female doctors around at the time. What
Speaker 1: was it about being a doctor that was so important
Speaker 1: to you? It clearly mattered. I mean, it clearly matters
Speaker 1: to you still. But what was happening around you at
Speaker 1: the time that made you think it was such a
Speaker 1: strong belief as a young person that you wanted to
Speaker 1: be a doctor.
Speaker 2: I just it's hard to really understand that as young
Speaker 2: as form. My parents told me that I told them
Speaker 2: that I wanted to be a doctor. I think it
Speaker 2: happened around the time at that stage when we were
Speaker 2: living on a small holding in Mapleton, a car was
Speaker 2: giving birth and there was a breech delivery and they
Speaker 2: had to use a rope to pull the calf out,
Speaker 2: and the vet looked at me and said, oh, wonder,
Speaker 2: you're going to be a vet.
Speaker 3: I said, no, I'm going to be a doctor and
Speaker 3: look after and look look after human beings. So I
Speaker 3: guess that was the tima articulated. And it was around
Speaker 3: this spreech delivery of the of the of this calf.
Speaker 1: Was there something about the power of helping an animal then,
Speaker 1: but helping a human being that the really I mean
Speaker 1: a breach delivery can be very very dangerous, and yet
Speaker 1: you know, the animals would both have walked away, I
Speaker 1: mean the car for the first time, we walked away healthy.
Speaker 1: I mean, there's a real power in watching something like
Speaker 1: that take place.
Speaker 4: Maybe it is a.
Speaker 3: Huge power, and I think that, you know, just being
Speaker 3: committed to you know, I loved animals growing up, and
Speaker 3: as I went to school, you know, I did well
Speaker 3: at school. And in those days in Boxburg, if you
Speaker 3: did well at school and you were a girl, you'd
Speaker 3: become a teacher because you could get aversary and know
Speaker 3: and you didn't have to worry about paying for your education.
Speaker 2: And when I told my school box To High that
Speaker 2: I wanted to be a doctor.
Speaker 3: That kind of smiled endearingly at me, and I guess,
Speaker 3: you know, I was determined, and I applied to VIT's University.
Speaker 2: And at that stage this was doing an experiment.
Speaker 3: They had decided to diversify who they brought into universe
Speaker 3: into medical school, so.
Speaker 2: There were a lot more women.
Speaker 3: In my ear, they're much more racially diverse, and a
Speaker 3: lot more people that came from the middle class and
Speaker 3: working class backgrounds, not from private school. So when I
Speaker 3: went to Box, when I got into WIT's medical school,
Speaker 3: you know, it's called a very diverse. But I also
Speaker 3: struggled with I didn't have a good education. In my
Speaker 3: latter years at school. We were short of maths and
Speaker 3: physics teachers, and I struggled. So, like a lot of
Speaker 3: people coming into university from education that is not as
Speaker 3: good as private schools, it takes a while to catch up.
Speaker 2: So for the.
Speaker 3: First year or two at medical school I really felt stupid,
Speaker 3: and then suddenly in my clinical years I caught up
Speaker 3: to my peers and was able to compete and do
Speaker 3: as well as people who'd come from better schools in Johannesburg.
Speaker 1: It's so interesting that, I mean, so often it's really
Speaker 1: about getting through the first year or two of university
Speaker 1: and then you start to see people really grasping whatever
Speaker 1: it is and off they go, and that that that
Speaker 1: clearly happened to you. I do want to skip forward
Speaker 1: a little bit because I do want to get to
Speaker 1: some of the other things that you've been involved in.
Speaker 1: But at one point you clearly realize that HIV was
Speaker 1: going to be very, very important in South Africa. And
Speaker 1: when HIV first came on the scene, you know, sort
Speaker 1: of mid nineteen eighties, I don't think many people realized
Speaker 1: how important it was going to bed.
Speaker 2: Did you.
Speaker 1: Was there a moment when you realized what the aides
Speaker 1: pandemic and how many South Africa was going to take,
Speaker 1: how vulnerable we were going to be, how big this
Speaker 1: thing is.
Speaker 3: I think there were three things that pointed me to
Speaker 3: wanting to do something in HIV. So the first thing
Speaker 3: was I was a student activist during a part eight
Speaker 3: and the organization I worked for, which was Health Workers Association,
Speaker 3: used to organize communities around half issues, and with HIV emerging,
Speaker 3: I worked in that sector trying to mobilize communities around
Speaker 3: HIV and.
Speaker 2: You know, and work with them.
Speaker 3: And then I went and worked at Baragua Hospital and
Speaker 3: I worked in the main ICU and the part of
Speaker 3: domestic surgeon who was in charge of ICU was this
Speaker 3: brilliant surgeon and I could never understand why he wasn't
Speaker 3: working in the theaters. And he was one of the
Speaker 3: first people in South Africa we've got HIV and he
Speaker 3: died in nineteen eighty eight, and.
Speaker 2: He was my father worked on the mines at RPM.
Speaker 3: I grew up in I was born in Buxburg, and
Speaker 3: I grew up first of all in Buxburg, and then
Speaker 3: we moved to pace call Mapleton, and then but to
Speaker 3: outside Nigel.
Speaker 2: And then we moved to a pace called Scarpin's Risk.
Speaker 1: Seven Notes is the best of the Money Show from
Speaker 1: this week. This week Personal Finance Warren in Grimy, financial
Speaker 1: advisor and co founder of Galileo Capital, breaking down the
Speaker 1: rands impact on your finances, also talking about why the
Speaker 1: rand dollar exchange rates there's a real impact on your financial.
Speaker 5: I mean understanding that it affects almost every aspect of
Speaker 5: our lives where something has a price. Stephen, if you're
Speaker 5: you know, if you're buying food, you would think that
Speaker 5: the dollar has no impact, but a lot of our
Speaker 5: food items are dollar related. When they quote the price
Speaker 5: of maize, it's not quoted unfortunately, you know, in global
Speaker 5: terms in rands, it's quoted in dollars. And if you
Speaker 5: go through something like fuel oil in particular, you'll notice
Speaker 5: that it's always you know, dollars per barrel and the
Speaker 5: price of fuel again has an enormous impact on our economy.
Speaker 5: It affects the cost of transport, which means that it
Speaker 5: affects every single item that gets delivered to a shop,
Speaker 5: and then you know we have to get to the
Speaker 5: shop and and so on and so on. So the
Speaker 5: moment you look at the rand and you look at
Speaker 5: how it's moving against a dollar. If if life is volatile,
Speaker 5: which is seems to me every single day of our
Speaker 5: lads at the moment, and especially the currency, it means
Speaker 5: that our cost of living is hugely impacted by the
Speaker 5: rand dollar and cost of living. The only thing that
Speaker 5: the Reserve Bank can do to control the cost of
Speaker 5: living is use interest rates. So for dealing with rising
Speaker 5: cost of living because of imported inflation from the weak
Speaker 5: rand versus the strong dollar, then we're in a position
Speaker 5: where the Reserve Bank has to respond to that, and
Speaker 5: so they push up interest rates, which makes our mortgages
Speaker 5: more expensive, our credit cards. It makes it difficult for
Speaker 5: government to have enough money to buy and buy and
Speaker 5: pay for infrastructure because it's got to serve a debt.
Speaker 5: And so you can see very quickly how you can
Speaker 5: get into a real downward spiral with with a you know,
Speaker 5: a very strong dollar and a very weak rand, and
Speaker 5: equally that if that cycle turns how it can become
Speaker 5: something of a virture circle.
Speaker 1: Okay, and then I mean what pushes the value of
Speaker 1: the rand up and what pushes it down? And you're
Speaker 1: not allowed to say because they're more buyers than sellers.
Speaker 5: I always think, you know, famously, one of our not
Speaker 5: current cabinet ministers said, you know, it doesn't matter, We'll
Speaker 5: just move the rand in our own direction or something
Speaker 5: like that. We'll just pick up their.
Speaker 1: Own We'll pick the rand, We'll pick up the rand.
Speaker 1: It was you.
Speaker 5: I wish we could do that. I wish there was
Speaker 5: someone in our government that was that powerful that could
Speaker 5: could just pick up the rand. So so I think
Speaker 5: to understand, one one huge advantage we have is we
Speaker 5: are one of the most traded. The jargon is liquid,
Speaker 5: so one of the most liquid currencies in the world,
Speaker 5: you know, after things like the dollar in the Euro
Speaker 5: et cetera. One of the one of the merging market
Speaker 5: currencies that's most easy for global investors to buy and
Speaker 5: sell is the Rand. And the reason for that is
Speaker 5: we've got very deep capital market, so we've got very
Speaker 5: strong banks, we've got a very good exchange and very
Speaker 5: well managed, well regulated financial system, and so foreigners will
Speaker 5: buy and sell our rands with ease, and that makes
Speaker 5: us very susceptible to to global good global tides, let's say.
Speaker 5: And so there is almost nothing that the government can
Speaker 5: do to pick up the rand or to make it
Speaker 5: fall if they really wanted to do that. As well,
Speaker 5: we find ourselves at the mercy of a lot of
Speaker 5: global sentiment. So, for example, if the world is reasonably
Speaker 5: positive mood, which seems to be in the last sort
Speaker 5: of almost want to say, twenty four hours, we watch
Speaker 5: the rand go from eighteen to the dollar to seventeen seventy,
Speaker 5: and we have nothing to do with that. It's not
Speaker 5: like we suddenly became a slightly better country where economy
Speaker 5: grew a little bit faster or something like that. That's
Speaker 5: entirely global global factors. It's geopolitics at play and our
Speaker 5: round moves. And the only impact that a South African
Speaker 5: institution can have on the rand would be the Reserve Bank.
Speaker 5: And what they can do is they can keep interest
Speaker 5: rates high, which is currently what they're doing. And the
Speaker 5: reason they're doing that is because they're trying to make
Speaker 5: the and an attractive place for foreign investors to store money,
Speaker 5: because if they can store money here and earn eight
Speaker 5: or nine percent a year, it's much better than what
Speaker 5: they can do if they can store money in let's
Speaker 5: say the US at three percent a year. So we
Speaker 5: don't want to be in a position where suddenly, you know,
Speaker 5: you can get three percent on rands or three percent
Speaker 5: on dollars, because guess what, people are going to move
Speaker 5: their money out of rands and into dollars. So the
Speaker 5: reserve banks the only institution that can influence the rand,
Speaker 5: and I would say it's a small impact. Global dynamics
Speaker 5: move the round a lot more than anything else. The
Speaker 5: only time we, unfortunately, can really affect the rand would
Speaker 5: be by dragging it down. And you'll remember the weekend special.
Speaker 5: And I'm not talking about Upper La Fasci, the famous
Speaker 5: South African fullback. I'm talking about the other one, the
Speaker 5: Minister of Finance who was there for a few days.
Speaker 5: His appointment and I think I was almost live on
Speaker 5: the show when that happened, had a cat strophic effect
Speaker 5: on markets and most especially the Round, and equally when
Speaker 5: he was then booted out of the job. So the
Speaker 5: round recovered. So a major political misstep can cause the
Speaker 5: rand to lose a lot of value, but unfortunately the
Speaker 5: other way around won't see the rand, for example, going
Speaker 5: from eighteen to fourteen to the dollar. If we do
Speaker 5: something amazing in politics. I think it's kind of a
Speaker 5: one way street. We might creep up over time, and
Speaker 5: the rand might get stronger gradually if our economy grows
Speaker 5: and our politicians managed to behave and play nicely in
Speaker 5: the government of national unity. But go the other way
Speaker 5: and we can collapse the round very quickly.
Speaker 1: Is there any benefit to having the rand traded in
Speaker 1: this way? I mean, it goes up and down all
Speaker 1: the time. It can be incredibly frustrating. But I suppose
Speaker 1: the benefit would be that it's because we're an open economy,
Speaker 1: goods flow in and out of it very easily, and
Speaker 1: that's generally a good thing. It might help to you know,
Speaker 1: it means that food prices might be a bit lower,
Speaker 1: for example.
Speaker 5: I think it creates the opportunity for good news to happen.
Speaker 5: And so just understand where we are right now. We're
Speaker 5: in an environment where interest rates are high, and we
Speaker 5: certainly looking at an inflation rate that's declining, and so
Speaker 5: if interest rates start to come down, that means that
Speaker 5: things like our mortgages will get cheaper, and it means
Speaker 5: that companies have a little bit more cash flow to
Speaker 5: invest in growing themselves and you know, buying more stock.
Speaker 5: The government has a little bit more breathing room because
Speaker 5: interest rates are lower, they have a little bit more
Speaker 5: cash to pay do some more debt, or or do
Speaker 5: some more infrastructure spending. And so when you've got a
Speaker 5: very liquid, very open market, if you actually do things
Speaker 5: well and you take the right steps and the right actions,
Speaker 5: then this liquid market becomes an incredible strength, and investors
Speaker 5: feel great comfort in allocating money here because they can
Speaker 5: see things that are going well, and they also have
Speaker 5: the comfort that they can pull their money out if
Speaker 5: things aren't going well. So I think that it's it's
Speaker 5: an enormous strength, you know, Stephen. I think it's just unfortunately,
Speaker 5: because it's liquid, it's also a very very quick and
Speaker 5: almost immediate price on what the market thinks of what's
Speaker 5: going on in the country at a moment in time.
Speaker 5: So when we're behaving badly or not doing the right thing,
Speaker 5: or not getting the reforms, then we see a weak
Speaker 5: currency and when our economy is not growing, we see
Speaker 5: it there as well. So I think, unfortunately, we've just
Speaker 5: seen what the world thinks of our policies and maybe
Speaker 5: our lack of execution of those policies, and that's why
Speaker 5: we're in the situation we are now. But it's not
Speaker 5: a one way bet. It takes good action, and we
Speaker 5: could see the exact opposite, and then we would all
Speaker 5: be thrilled with what's going on, I guess, except for
Speaker 5: the mine the mining houses who sell their commodities in
Speaker 5: dollars and they would love their n to be weak
Speaker 5: for a long period of time.
Speaker 1: I mean other examples, of course, Liz trust is a
Speaker 1: British Prime Minister, the reaction to the British pound on breaks,
Speaker 1: and all sorts of other examples. Okay, how does the
Speaker 1: ran then influence some money? We're dealing in rands? The
Speaker 1: rand goes up and down, obviously it affects what we
Speaker 1: can buy and how much things cost.
Speaker 5: So let's start with the one that I think is
Speaker 5: almost core to the whole country, and that will be
Speaker 5: the fuel price. If you a country like ours, and
Speaker 5: I mean we don't have a lot of fuel in
Speaker 5: the ground, you know, that we can pull out and
Speaker 5: convert let's a gas to fuel, so it means we
Speaker 5: basically buy every single barrel of oil that we convert
Speaker 5: to fuel and consume in our country. And because that's
Speaker 5: dollar denominated, if the rand is sitting at nineteen to
Speaker 5: the dollar, it means that our fuel is more expensive
Speaker 5: and that's inflationary. Equally, when the rand starts to go
Speaker 5: through a period of strength, and potentially now for exams
Speaker 5: or where we see the dollar price coming down again,
Speaker 5: then you might get a time where you've got a
Speaker 5: strong rand and a load dollar price of oil, which
Speaker 5: means that we're in a deflationary environment, which which would
Speaker 5: be a huge relief to us. That means our fuel
Speaker 5: prices get cheaper. If that happens, it means inflation goes down.
Speaker 5: And if that's falling, inflation means food foods getting cheaper,
Speaker 5: the goods we buy are getting cheaper, and that means
Speaker 5: the Reserve Bank looks at this whole situation and goes, well,
Speaker 5: hang on, you know, we don't need this massive sledge
Speaker 5: hammer of interest rates to deal with inflation. Right now.
Speaker 5: We can kind of you know, lighten the load on
Speaker 5: the on the whole economy because inflation is under control,
Speaker 5: and that might just be the spark that causes a
Speaker 5: further economic growth and some sort of acceleration from zero
Speaker 5: point five or one percent year whatever it is at
Speaker 5: the moment, to you know, two or three or four percent.
Speaker 5: So the rand and most especially the oil price our
Speaker 5: big factors in the way that our money will move.
Speaker 5: And just to understand that once we get that sort
Speaker 5: of kick on of positive sentiment, we look at things like,
Speaker 5: you know, the bond market, and if the bond market,
Speaker 5: you know, the prices of bonds are moving the opposite
Speaker 5: direction to interest rates. So if interest rates are falling,
Speaker 5: it means the price of bonds is rising. That's very
Speaker 5: good for most of the big retirement funds, pension funds,
Speaker 5: et cetera, lots of retirees, and so if interest rates
Speaker 5: are going down, it also means that stock markets might
Speaker 5: do well because high interest rates are a drag on
Speaker 5: share prices. It means that you know, companies don't have
Speaker 5: capital to reinvest, et cetera. I mean understanding that it
Speaker 5: affects almost every aspect of our lives where where something
Speaker 5: has a price.
Speaker 1: Stephen seven notes, you're listening to the best of The
Speaker 1: Money Show The Money Show I'll shape shift to this week.
Speaker 1: Connie Matla Juana, the CEO of Cram Enterprise and founder
Speaker 1: of the Law Foundation, sharing her story astonishing to go
Speaker 1: from someone who was about to be retrenched to starting
Speaker 1: her own business and the impact that she's managed to
Speaker 1: have on her own career and other people.
Speaker 6: I'm very solutions driven, so when I had rumors through
Speaker 6: the grapevine that there might be retrenchment coming, I made
Speaker 6: it easy for my boss. I went to talk to
Speaker 6: him to say, I know this thing is coming, so
Speaker 6: I'd rather up put in a difficult position. I will
Speaker 6: volunteer to be one of the people that live provided
Speaker 6: that if I start my own thing, you're gonna support me.
Speaker 6: And my boss was like, one hundred percent, I'm going
Speaker 6: to support you, and that's why they did. So I
Speaker 6: took the retrenchment package and I started CERIM Enterprise with
Speaker 6: my desk from my previous work, my laptop from my
Speaker 6: previous work, and my cell phone from my previous work.
Speaker 6: And I started in a little corner of my bedroom
Speaker 6: day and that's how Cram Enterprise was launched.
Speaker 1: How did you decide what to go into.
Speaker 6: I've been marketing professional, so I've been doing marketing for
Speaker 6: over by other time, I was in marketing for over
Speaker 6: fifteen years, and I always enjoyed seeing brands come to life,
Speaker 6: and I like, what branding does you know? Seeing something
Speaker 6: that is plain creating something beautiful with it. It was
Speaker 6: a no brainer that that was the industry that I
Speaker 6: was going to go into. And because I was working
Speaker 6: mostly in the gaming industry, I knew how important promotional
Speaker 6: products are and I knew that there was a market
Speaker 6: for it, and I understood the industry, so it was
Speaker 6: easy for me to go into that space.
Speaker 1: Corporate gifts is interesting. I mean I've watched people have
Speaker 1: conversations what should we give the guests at our conference
Speaker 1: this year, and they've been certain phases. There was a
Speaker 1: time a long time ago where every corporate gift was
Speaker 1: a flash drive. I mean it feels like ages ago.
Speaker 1: Then a few years ago, there was a time when
Speaker 1: it would be wireless headphones, you know, the cheap wireless earphones.
Speaker 1: And I think the thing about that is you keep
Speaker 1: them because you lose your Apple ones and so you
Speaker 1: end up using them, right, I think they're quite effective.
Speaker 1: How are there certain things that just work When it
Speaker 1: comes to corporate gifting, you have to know what you're
Speaker 1: actually giving people, and it has to be something that
Speaker 1: actually want or that their children want.
Speaker 6: Corporate gifts have evolved over time. It's no longer like
Speaker 6: little cheap things that you just give away for the
Speaker 6: sake of giving away. They've become more practical, so you
Speaker 6: get even the clothing that you get these days, you
Speaker 6: can tell that is a promotional jacket that you're wearing
Speaker 6: because it has gone into that space. You now have
Speaker 6: different types of water body clothes. They used to call
Speaker 6: them squeeze bottles because it was the plastic ones. Now
Speaker 6: you get your vacuum bottles that will keep your drinks
Speaker 6: what for long called for long, So the space is
Speaker 6: shifted now. The corporate gifts has also gone into environmentally
Speaker 6: friendly products, so you have a wide variety of choice
Speaker 6: that you can choose from. So whether you have environmentally
Speaker 6: conscious you are more of a high end kind of
Speaker 6: a client that want high end gifts, you are able
Speaker 6: to get those. So I think it has evolved quite
Speaker 6: a bit, even the branding itself. I mean it used
Speaker 6: to just be your heat press, you embroidery. Now you
Speaker 6: have things like laser engraving or a clothing. Now you
Speaker 6: have things like the Rabbi kind of branding that you
Speaker 6: can do. So it has evolved quite a bit.
Speaker 1: Your first client, where did they come from? Was it
Speaker 1: someone you knew already? My former boss?
Speaker 6: So my the very first money that came into crram account,
Speaker 6: actually it came from my church, CA Bible Church way
Speaker 6: my fellowship. They were the very first lion because my
Speaker 6: past I was like, you know, we're got to be
Speaker 6: the first one to do this. So the very first
Speaker 6: marks that I branded, they were for CA Bible Church.
Speaker 6: And then of course my boss followed through and his
Speaker 6: promised that they were going to buy corporate gifts from me.
Speaker 6: It was the first big order that I got and
Speaker 6: it was exciting and yeah, so from there on it
Speaker 6: was not as easy as I thought it would be
Speaker 6: because you think, you know people, a lot of people,
Speaker 6: and it will be easy because I know Steven Stephen
Speaker 6: is definitely gonna buy. But then stevens a boss, and
Speaker 6: the boss the boss, and the decision is not as
Speaker 6: easy as saying, I know Cornelia support her. So I
Speaker 6: had to prove myself in the industry. I had to
Speaker 6: do this small jobs I had to be very aggressive
Speaker 6: with showcasing every little thing that I do on our
Speaker 6: social media platforms to attract clients.
Speaker 1: And yeah, the brand grew. One of the things that's
Speaker 1: really changed with starting a business, and maybe especially one
Speaker 1: like this, is social media. And I've spoke. We spoke
Speaker 1: to someone a little while ago, Lisa Rally, who started
Speaker 1: a gym chain in Durban thirty years ago, and the
Speaker 1: way she did it, she said she literally had to
Speaker 1: print pamphlets and put them under people's windscreens right to
Speaker 1: do home gym visits? Okay for you? By the time
Speaker 1: you were starting was twenty eighteen, twenty nineteen, wasn't it
Speaker 1: thirty eighteen? Yeah, before the pandemic, we have to.
Speaker 6: Say, before the COVID years.
Speaker 1: Yes, and you could use social media And did that
Speaker 1: make it a lot cheaper to start it?
Speaker 4: Did it?
Speaker 6: Did it made it a lot cheap? Purchased that? And
Speaker 6: also there is Gaming for Africa magazine, Gaming for Africa
Speaker 6: Magazine caters for the gaming in US because that's why
Speaker 6: I am so. I had a slot in there. So
Speaker 6: every Thursday they will showcase some of my products and
Speaker 6: that will be circulated to their database. I think that
Speaker 6: also helped a lot to create a brand awareness, but
Speaker 6: also posting relentlessly on social media. Whatever however little thing
Speaker 6: I do, whether it's one mark with a picture on it,
Speaker 6: I'll post it. If I print a flyer, I'll post it.
Speaker 6: Everything was on social media, and because I didn't have
Speaker 6: to pay much except for the data, it was it
Speaker 6: was a no brainer that does the platform to use.
Speaker 1: Connie, You at some point had to start employing people, right,
Speaker 1: And I always think that's such a big responsibility. You're
Speaker 1: you're kind of responsible for this person, for their children.
Speaker 1: Who was the first person you employed? Are they still
Speaker 1: with you? Were they left?
Speaker 6: I know they left. The first employee that I employed,
Speaker 6: his name was Justin But then I employed him just
Speaker 6: before COVID hit, and then COVID hit. Then I could
Speaker 6: not keep him because of the COVID.
Speaker 1: But employee people, have you found that experience because you're
Speaker 1: certainly responsible for them. You have to deal with them,
Speaker 1: you have to pay them. They also have to do
Speaker 1: things for you. You have to manage them.
Speaker 6: It's a difficult one, especially because I'm passionate about the youth.
Speaker 6: So my employees are young people, and young people are
Speaker 6: energetic and sometimes they can be too energetic, so it
Speaker 6: can become tricky at times. But if you have all
Speaker 6: your processes in place, I mean I have all the
Speaker 6: contracts in place, I have all the procedures in place.
Speaker 6: Everyone has their staff and book, everyone has their uniform.
Speaker 6: Everyone knows what leaves to take, when to take it.
Speaker 6: Everyone knows when to claim for over time, when not
Speaker 6: to claim for overtime. So because everything is in place
Speaker 6: in terms of HR, it's quite easy. Even they pay roll.
Speaker 6: I do it myself because I use a system, so
Speaker 6: it's it's easy to manage that. And also I do
Speaker 6: performance reviews regularly. I also do one on once. We
Speaker 6: have our weekly meetings every Monday with the team. Every
Speaker 6: year we go away for our strategy session to plan
Speaker 6: for the next year, so that everyone knows what's expected
Speaker 6: and what to do. So it's it's it's quite interesting.
Speaker 6: It's quite easy. You just need to have your processes
Speaker 6: in place.
Speaker 1: You you also try and help young entrepreneurs to your foundation.
Speaker 1: Do you find that young people who you're working with
Speaker 1: want to be entrepreneurs because they want to be entrepreneurs
Speaker 1: or do they want to be entrepreneurs because there's no
Speaker 1: other way to get a job to get an income.
Speaker 6: Most of them because there's no other way to end
Speaker 6: an income. Interesting enough, some of them it's because they
Speaker 6: think it's a ticket to be rich, yeah, and then
Speaker 6: they find out very quickly that actually it's not. So
Speaker 6: there is a different caliber of young people that we
Speaker 6: work with, and that's why I take time to get
Speaker 6: to know them talk to them. When we planning are
Speaker 6: You Summit that we just held now on the sixteenth,
Speaker 6: I made sure to be the one to do thesvps
Speaker 6: to talk to these people just to get into their head,
Speaker 6: to find out executly who they are and why are
Speaker 6: they wanting to be at the summit, and that informs
Speaker 6: whatever program that we put together to help these young entrepreneurs.
Speaker 1: Connie Male, they're highlighting her leadership approach and what she's
Speaker 1: been able to do to try and create work for
Speaker 1: others and for herself and to empower entrepreneurs. Seven you
Speaker 1: are listening to the Money shows the Best Bits Investment
Speaker 1: School this week. Francois Smith, client Portfoilio, analyst at Stonehage
Speaker 1: Flaming Investment Management and clarlog Else, the chief investment Officer
Speaker 1: and principle at First avenue investment management, looking at the
Speaker 1: evolving dynamics the changing dynamics of the old active versus
Speaker 1: passive investing debate, also looking at hybrid strategies that focus
Speaker 1: on cheaper investments and adaptability in response to how markets
Speaker 1: are moving.
Speaker 7: So passive investing in its most traditional form is when
Speaker 7: a particular passive provided attempts to mimic traditionally a cap
Speaker 7: weighted index by simply buying and holding all of its constituents,
Speaker 7: whereas an active manager, on the other hand, they go
Speaker 7: and attempt to identify good securities beforehand and encolator portfolio
Speaker 7: with the promise of potentially outperforming the market in which
Speaker 7: they're investing.
Speaker 1: So you could either buy the JC or share that
Speaker 1: would be passive, or you could buy capy tech that
Speaker 1: would be active. Well essentially yes, yeah, okay, Clio, I
Speaker 1: mean this argument, this debate has been around for a
Speaker 1: long time time. Is it possible to know who's best
Speaker 1: and a lot of people point to passive investors is
Speaker 1: having a better track record over time?
Speaker 4: Well, if we could just be a little bit more
Speaker 4: nuanced about active versus nuance right the minute you walk away,
Speaker 4: the minute you step away, even by an ounce from
Speaker 4: mimicking the index as it is the minutry step away
Speaker 4: and say I'm going to replicate the index on an
Speaker 4: equal weighted basis, or I'm gonna index I'm gonna mimic
Speaker 4: it on any other basis. You are active right the
Speaker 4: minute you do that, and you you because you will
Speaker 4: receive an outcome that is different from that of the benchmark.
Speaker 4: And the rationale would be, I'm doing this because I
Speaker 4: believe I can outperform the index, okay by making this
Speaker 4: one nuanced change. Okay, So now here comes an argument
Speaker 4: is that the vast majority of active managers, if you
Speaker 4: look at it over a long period of time, to
Speaker 4: perform the index. I think there's a statistic that says
Speaker 4: only ten percent of up to fifteen percent of managers
Speaker 4: outperform the index over say a five year period plus. Right,
Speaker 4: And so whether or not it's cheap or expensive or what,
Speaker 4: the point is the prospect of not beating the market
Speaker 4: is lower the minute you walk away from the index.
Speaker 4: So better stay with the index. You pay less. Maybe
Speaker 4: you don't get some of those spectacular It turns like
Speaker 4: Warren Buffett, but what are the chances? Because you stand
Speaker 4: the chance of missing that. You know, you can't pick
Speaker 4: the guy who beats the market. It's difficult. It's like
Speaker 4: a lottery.
Speaker 1: From so you you you've recently put together an article
Speaker 1: about this, and you talk about costs and you suggest
Speaker 1: that costs are actually king and it is cheaper to
Speaker 1: invest passively than actively. What costs are important if there
Speaker 1: is a possibility of outperforming in the market.
Speaker 7: Well, investing is inherently an uncertain endeavor, and costs are
Speaker 7: a part of it. That is certain. So if you
Speaker 7: are a client looking to collate a portfolio, it is
Speaker 7: something to be very conscious of. It is one of
Speaker 7: the deterministic components that can actually be controlled. So it
Speaker 7: is truly important.
Speaker 1: Would I mean you suggest that in fact, cheaper funds
Speaker 1: tend to outperform more expensive ones. That makes no sense
Speaker 1: to me. I have to tell you why is that.
Speaker 7: Well, it all comes down to being able to pass
Speaker 7: through the performance and expertise of the manager, whether it's
Speaker 7: an active manager, a semi active manager, or someone exactly
Speaker 7: as you've just pointed out, someone who inherently departs even
Speaker 7: slightly from the cap weighted index. It comes down to
Speaker 7: being able to pass that outperformance onto the customer. And
Speaker 7: that is really where the value lies. That is the
Speaker 7: promise being able to get that excess performance into your investors' hands.
Speaker 1: Mmm. Hell, I mean I'm interested in that. If if
Speaker 1: cheaper funds were always if the cheaper ways to invest
Speaker 1: always outperformed the more expensive ones, how do the expensive
Speaker 1: ones even survive?
Speaker 4: Yeah, because when they're expensive ones. Well, let's put it
Speaker 4: this way. When an manager cannot perform the benchmark right,
Speaker 4: the index or the market, it's worth it. It's worth
Speaker 4: a billion dollars. So a good example is you pay
Speaker 4: a premium for the opportunity that maybe the guy you've
Speaker 4: chosen a Warren Buffett. Okay, that's worth a lot. Maybe
Speaker 4: the guy you've chosen is Phil Fisher. Maybe the guy
Speaker 4: who've posen is one of the greats. Right, and there
Speaker 4: are all these people around the world. Now they're not
Speaker 4: as many as they are funds. But you pay a
Speaker 4: premium for that prospect because when you do get a
Speaker 4: right the outcome is completely outstanding by a country mile,
Speaker 4: and I performs the market by an order magnitude you
Speaker 4: would never have imagined. But you pay for that right
Speaker 4: up front. You pay for that chance.
Speaker 1: There's so few of these people, it seems, around the world.
Speaker 1: So presumably they make quite a lot of money when
Speaker 1: they do it, obviously, but at the same time, it
Speaker 1: just raises the level of risk to get involved in this,
Speaker 1: and over time technological change might well have an impact
Speaker 1: on you know, who is able to actually actively manage
Speaker 1: a market in that way.
Speaker 4: No, no, no, no, no, no, I think you mist understand it, Steven.
Speaker 4: It's not different from record companies, record companies, how many
Speaker 4: record how many artists out there have record deals? And
Speaker 4: how many artists are out there ever become top selling artists?
Speaker 4: One percent of artists actually occupy most of the playtime
Speaker 4: in a radio station. But radio stations pay the artists
Speaker 4: to take that chance that they'll get the next Michael Jackson,
Speaker 4: the next Beyonce. Why is it any different? For as
Speaker 4: the management.
Speaker 1: Makes a lot of sense when you put it like that.
Speaker 1: Francois are active and passive, and I I sort of
Speaker 1: started off by saying that there might be a little
Speaker 1: bit of a breakdown in the definition, that it's a
Speaker 1: bit more nuanced than it used to be, or different
Speaker 1: houses change.
Speaker 7: Well, it's exactly as he is alluded to. Yeah, as
Speaker 7: soon as you depart from the traditional cap weight to
Speaker 7: the indexing strategy. You're inherently making an active decision. And
Speaker 7: what's really interesting is that your passive providers are more
Speaker 7: and more giving exposure to very niche and unique corners
Speaker 7: of the market, different weighting methodologies, different styles, different strategies,
Speaker 7: and that in itself is an active decision. So what
Speaker 7: essentially is happening that even if if you are picking
Speaker 7: a passive product, you are making an active decision to
Speaker 7: have an exposure to a part of the market that
Speaker 7: you potentially believe is going to do better than the
Speaker 7: overall market.
Speaker 1: Okay, so are we seeing the sort of old fashioned
Speaker 1: sort of differences between the two breaking down a little bit,
Speaker 1: I mean, is there a different way? Are we looking
Speaker 1: at the market in a way that's slightly different from
Speaker 1: where we were ten to fifteen years ago.
Speaker 7: I think when considers the activists passive debate, people view
Speaker 7: it in dichotomous lens, and I think that is both
Speaker 7: limiting and contentious because I believe that having passive exposure
Speaker 7: gives you low cost, cheap market participation, and you also
Speaker 7: and by incorporating active bets in your portfolio, you are
Speaker 7: allowing for the prospect of potential art performance of that market.
Speaker 7: Getting it right is exceptionally difficult. But being nihilistic and
Speaker 7: not allowing for the possibility, I think is limiting yourself
Speaker 7: and your portfolio.
Speaker 1: Clilo, I mean they the idea that people are active.
Speaker 1: Does that mean that they're actually as active as as
Speaker 1: they sound. I mean, when you talk about an active
Speaker 1: asset manager, I have a sense of them doing something
Speaker 1: every day. Presumably they're not, you know, changing changing what
Speaker 1: I've invested with them every day. I mean, I presume
Speaker 1: they're not as active as all that they're They're taking
Speaker 1: a lot of information every day, probably.
Speaker 4: Yeah, And they are grades of being active. They're you know,
Speaker 4: they stream. We have what they're called day traders who
Speaker 4: never go to bear without closing a possession, right, and
Speaker 4: then they're they are they stream like such as Warren Buffett,
Speaker 4: who can hold up possession since nineteen fifty as a
Speaker 4: dead end Geico, okay, nineteen fifty till today.
Speaker 3: Right.
Speaker 4: So these are two extremes. But I have to tell
Speaker 4: you that I think when you are an investor you
Speaker 4: want to put your money to the stock market, you
Speaker 4: really should consider yourself as someone who's buying a hybrid
Speaker 4: car party electric battery and part petrol. Right, the electric
Speaker 4: battery is a passive party, it's cheap. The petrol is
Speaker 4: the active part. You have to pay the aill prices
Speaker 4: that goes up and down. Right, you blend it two
Speaker 4: to get on average a lower price or a lower
Speaker 4: cost of energy than has just gone fully active. Right,
Speaker 4: both have a role. There are some markets. I think,
Speaker 4: if you want to buy cash, why get an active
Speaker 4: manager just to invest in cash that you can do passive.
Speaker 4: Some people feel that way about bonds that you can
Speaker 4: do passive. Now with equity where you stand the chance
Speaker 4: of getting exceptional outcomes, well, you also have to pay
Speaker 4: sometimes an exceptional amount of money to participate in that.
Speaker 4: That's your petrol. Right, that's where you get more octane.
Speaker 1: Hmmm, that's such a that's such a useful way to
Speaker 1: explain it. So so then, okay, we see that traditional
Speaker 1: categories are blurring. Francois, I mean presumably this is going
Speaker 1: to continue. I mean that blurring is you know the
Speaker 1: whole way in which we look at this is going
Speaker 1: to continue to change.
Speaker 7: Yeah, yeah, I think so. I think the never the
Speaker 7: market will never reach a point where there's complete polarity
Speaker 7: towards the one, the one side or the other, because
Speaker 7: active managers have to do research and they have to
Speaker 7: get into parts of the market that is unique, and
Speaker 7: in doing so they keep the market relatively efficient. Passive
Speaker 7: providers rely on that to to provide low cost markets
Speaker 7: that are relatively efficient, and as soon as the markets
Speaker 7: are perceived to be inefficient, active managers will jump in
Speaker 7: and they will try to exploit those opportunities. So having
Speaker 7: saying that, well, passive is the only solution forever and ever,
Speaker 7: I'm in and think that is the way.
Speaker 1: That's Francois Smith and Clail Orgie also giving you some
Speaker 1: expert insights into the evolving and changing landscapes of active
Speaker 1: and passive investing and looking at hybrid strategies as some
Speaker 1: of the best bits of The Money Show this week,
Speaker 1: just to digest of some of the most important insights.
Speaker 1: If you'd like to hear more, you can go to
Speaker 1: our website or please go to your favorite podcast app
Speaker 1: and search for The Money Show. Have a good weekend,
Speaker 1: stay warm. We'll be back with you on The Money
Speaker 1: Show six o'clock on Monday,