Introduction

Introduction

Anet Ahern

Anet has 30 years’ experience in investment and business management. After starting her career at Allan Gray in 1986, where she fulfilled various roles in trading and investment management, she worked as a portfolio manager at Syfrets, and later BoE Asset Management, where she was CIO and CEO. She also spent six years at Sanlam, where she was the CEO of Sanlam Multi Manager International, with assets totalling R100 billion in local and global mandates. Anet joined PSG Asset Management as CEO in 2013.

‘You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.’ Warren Buffett

Our approach to investing in turbulent times reflects our general investment approach As a particularly eventful 12 months draw to a close, this edition of Angles & Perspectives examines our approach to investing in turbulent times. For those of you who have attended our recent ‘Outlook’ events, some of the content will ring a bell, and this would please us no end! Our approach to investing during times like these, and actually at all times, incorporates the following: • Always remember that emotions can make you buy high and sell low, so keep a cool head. • Beware the dangers of forecasting, so don’t rely on it too much. • Always focus on the investor objective. For example, for pensioners real returns are more important than relative returns. • Think long term. Most of what invades our minds in the short term is noise in retrospect. • Diversify. Outcomes are uncertain, and complimentary investments help to make the journey smoother. • Always buy with a margin of safety. The price you pay for an investment is crucial. • Grab the opportunities that arise in times of panic. If there are no opportunities, wait patiently.

heart of how we align ourselves with our clients. We make sure that every holding of every portfolio works towards this goal with the right margin of safety. Philipp Wörz walks us through the investment opportunity that we see in Cisco, a dominant player in the networking industry. We believe the opportunity exists because the market perceives the firm as a much more commoditised provider than we do. We conclude with a focus on the PSG Equity Fund, of which Shaun has been the manager since 2002. Sticking to our proven process enables us to find rewarding opportunities for our clients This year, we have handled the disturbing events both globally and here in South Africa, and the task of investing clients’ hard-earned money with the same approach we have taken for years – we always remember that our first goal is to remain the best stewards of clients’ wealth. This means we continue to put clients first in everything we do, we take a long-term approach, and we do our work when it comes to researching investment opportunities. We thank you for your support throughout the year and wish you a peaceful festive season and a prosperous 2017.

All our investment decisions are underpinned by certain fundamental principles We open this edition with Shaun le Roux who recaps the risks inherent to investing in a difficult, noisy environment. Next we have a recap of our asset allocation process by Ian Scott and Lyle Sankar from our fixed income team. The basis of our asset allocation process is our long-term outlook for inflation. Real returns (above inflation) over the right time horizon are at the

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