Picking the best low-hanging fruit where few others look -- for cents on the dollar

Why it’s vital to think critically, both in investing and life

Critical thinking in investing and life

One of the major reasons I’m bullish on the long-term economic prospects and investment opportunities in African stocks is the continent’s favourable demographics. Over the next generation, the number of young, dependent children who need to be fed, clothed, schooled and provided with healthcare, using the resources of productive working-age people and the taxes governments collect from them, will decrease markedly as a percentage of the overall population.

At the same time, the proportion of working age people will rise rapidly, as the earlier generation of children matures into adulthood. That will put a tailwind behind economic output, and raise aggregate demand for most goods and services.

You can read more about this in my prior article, here. Or you can register an account and watch my presentation to prospective investors at africanlionsfund.com, which includes material about this topic.

But one of the other relevant points about a young population, in today’s world, is that it leaves a country less susceptible to excess deaths triggered by the Covid-19 pandemic. Just 8.9% of Tanzania’s population, or approximately 5.3 million Tanzanians are over the age of 50.

Tanzania demographics 2020

Compare that to Italy, which has almost exactly the same overall population, but where 45.6% of the population, or approximately 27.6 million Italians are over the age of 50.

There is a very superficial understanding among most people, even journalists and commentators, who are supposed to be educated people, of this radical difference between the population structures of different countries. Tanzania and Italy are but one example.

I picked them not because they are two of my favourite countries, though that is also true. I picked them because I have been getting sick and tired, again, of all the headlines of late about vaccines.

Look at the population pyramid for Tanzania above. What group of people do you think should absorb the biggest portion of the government’s attention?

Surely, it’s the 16.3% or 9.7 million children under 4 years old; closely followed by the rest of the youth of the country, under the age of 19, which make up over 56% of the total population.

Do these people need Covid-19 vaccines? No. It is scientifically proven they are not nearly as vulnerable as older people, if at all. For the most part, they are not likely to travel anywhere, either.

They do however need to go to school. And the very young need other, proven vaccines for preventable diseases, such as cholera, polio, tetanus, diphtheria, tuberculosis, and so on. Malaria, the single-biggest killer of African children under 5, is another scourge that needs to be actively addressed with preventative treatment.

By keeping the country open and functioning normally, and not using its resources on expensive, unproven Covid-19 vaccines, the Tanzanian government is allowing, as best it can, normal, regular, immunization programs to continue.

I know this for a fact. A friend recently welcomed a new child. The baby has already been immunized against several of the usual childhood diseases. People don’t live in fear of attending hospitals and clinics here, either.

Italy clearly has a greater need for government action to combat the Covid-19 pandemic. The biggest part of the population is in a vulnerable cohort. The government there can impose lockdowns and mandate Covid vaccines, or whatever it deems appropriate.

My own personal point of view is the costs of these actions outweigh the benefits. But that is not the point of this article.

The point of this article is that what’s “right” for one country and its leadership, is not necessarily “right” for another country.

I don’t see eye to eye with The Economist on their views of the Tanzanian economy. And, frankly, I get sick and tired of reading propaganda and hatchet jobs written by people who are supposed to be educated journalists. Very few bother to analyze issues and think independently. They are a herd of sheep for the most part, pushing a certain agenda.

But The Economist did recently publish an interesting piece on the impact of Covid-19 on Japan, the country with the oldest demographics on earth.

The country has reported 18 deaths per million. No lock-downs. No contact tracing. Maybe the West got it wrong and we were duped by the media and government hysteria.

We live in a world, unfortunately, tainted by political bias,
sensationalism and fearmongering almost everywhere you turn

Covid-19 is the most politicized illness in history. Whenever you read something about it, please do yourself a favour, and approach it with skepticism.

The same goes for what people write about economics, business and investment. You should not take it at face value.

This is why I have said before that in my investment analysis, I read only primary sources, published by companies, Central Banks and statistical agencies themselves, and gather my own information from an extensive network on the ground. I do not read journalists’ reports, or analysts’ reports to generate investment ideas. I might refer to them at a later stage of my analysis, to verify or seek counter arguments to my own thesis.

Of course, for you, the same goes for what I write. You should do you own research. Don’t take my word for anything.

I am unapologetically optimistic about Africa’s long-term prospects. I see the glass as half full. I write from that perspective. I have my money and reputation on the line.

I may be wrong. But one thing you’ll always get from me is what I believe to be the truth. I call things as I see them.

I work for myself. I don’t have a boss. I don’t have an organization that shapes what my view should be or conform to. I hope that what you get from me is unvarnished opinions, backed by thoughtful analyses, evidence and data.

The same, unfortunately cannot be said for most of what passes for “journalism” nowadays.

Until next time,

Tim Staermose signature

Tim Staermose
Global Value Hunter
African Lions Fund

PS. Here’s one mainstream media outlet’s narrative on Tanzania: “Has Tanzania really beaten coronavirus.” Have a listen and decide for yourself. 

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