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I like what you write. Thanks for sharing. Regarding politicizing Covid or the quality of journalism today I couldn’t agree more. I like your advice to think independently and to check original sources.
Regarding demographics in Africa, potentially growing consumption etc I agree too.
Where I have my doubts is whether African companies have the ability to thrive and whether the political environment for these companies will allow them to be successful. Do the local founders have the right attitude, do they have the ability to withstand bad governance? I firmly believe that future success across the world will be created by founders, independent thinkers, who have a vision and don’t mind working hard. While I have not doubts that China and possibly India will have a lot of these people, I’m not sure to say the same about African countries. My experience on the ground in Africa is limited, so much smaller than yours. I would appreciate if you — based on your interactions with local business people in the different countries — could introduce your readers to some of these founder types, their character, achievements, attitudes and this way “personalize” your investment conviction.
Just an idea…
Thanks for your good work and much success!
You may be right. But there are plenty of other ways to invest than alongside “founders.”
What my African Lions Fund invests in mostly is locally listed subsidiaries of multi-national companies with management and manufacturing systems proven over decades around the world, and solid corporate governance. They are always in the spotlight here in their host countries and are run very cleanly for the most part.
For example, we own a subsidiary of Heidelberg Cement. We own a subsidiary of AB-Inbev. We own a subsidiary of Rabobank. We own a subsidiary of Standard Bank (South Africa). We own a subsidiary of Heineken. etc.
We do own one company in Kenya with a highly successful and charismatic leader/founder. There are in fact many such companies in Africa, including Dangote Cement, Dangote Flour (recently acquired by a takeover suitor), and Dangote Sugar, which are listed in Nigeria. Aliko Dangote, Africa’s richest man is the embodiment of a visionary “founder.” But most founder-led companies in Africa are privately held.
You might like to check out the latest Forbes List of African Billionaires. There are plenty of company founders or second-generation corporate leaders of family companies on that list.
Another book / magazine series that details stories of founder-led companies is, “How we Made it in Africa.” The subject of at least one chapter in that book runs a company that is on my watchlist for investment, once they trim the debt from their balance sheet.
I would also add that founder led companies in Asia are not universally known for good corporate governance or respect for minority shareholders. Far from it. The opposite is often the case.
To be frank, I am more comfortable investing in the subsidiaries of multinationals in Africa.
I’m still behind it myself, doing a compulsory 14 day quarantine at home in the UK having spent a few days in France to visit my business partner. He used to live in Gouvieux (next door to the Aga Khan) and has just moved into a superb property near Lyon, where you can literally shut yourself away from all the craziness going on in the world outside.
What a coincidence that within the span of a few days I watched your video with George Gammon and also had a friend call me about a consulting position in South Africa towards the end of the year. Since I’ll be in Africa for the first time in my life and a safari is one of my bucket list items I would love to do that while I’m there. I noticed some great pics on your website and was wondering if you might be able to pass along some information that might be relevant.
BTW – great letter this week. I’ve been in Buenos Aires for the past nine months and they’ve had one of the strictest lockdowns in the world and now cases are exploding. It seems to me you can delay the inevitable for a while but it will eventually run its course. And to your point at what cost? Hopefully South Africa is opened up more like Tanzania.
I’m plotting my own escape across the Curtain as well, and it isn’t easy.
Your article is excellent. Due to my age and co-morbidities, I am in the high-risk group for Covid, so it behooves me to take extra precautions. But I agree that for most younger people, what’s going on with Covid restrictions is outrageous, unhealthy, and stupid. I can’t stand living under Covid-crazed tyrants. I’d rather fend for myself, thank you, and take my chances.
Have a great time in Tanzania!
I just finished reading your latest article “The Covid Curtain has descended on the world; which side are you on?” and I was so happy to finally read a critical, yet reasonable article about this topic that I just have to thank you for it.
In Germany or in Bavaria, in specific, things are so crazy that I wonder almost everyday if I’m only dreaming. It is impossible to read any newspaper or to watch TV without constantly getting confronted with the “awful new developments” about the virus. Most of the times that means like some dozens of new infections or sometimes a death of a 90-year old. People live in constant fear.
Again thank you for your article. It showed me that there are still rational people left on this planet. Keep up your work, I really enjoy reading your thoughts on investment ideas, but also articles like this.
By the way, I am really looking forward on investing in your African Lions Fund next month.
My mistake. I will amend. Appreciate the heads up.
Doesn’t change the point of the article, however, as I am sure you’d agree.
Removing a 128-year old industry stalwart like Exxon which has at various times been THE largest company in the world, by diktat, because Apple’s stock split left not enough IT sex-appeal in the index seems a bit weird, to say the least.
I note that Exxon has 74,900 full-time employees. It generated sales of $256 billion in 2019.
Amgen had sales of $23 billion last year, and less than one-third as many employees as Exxon, at 23,400.
So, if we ask ourselves, which company best reflects the objectives of the Dow, as originally envisioned, to reflect the broad US economy? I’d say it’s Exxon, which also produces stuff that touches the life of every single person in the USA in one way or another.
Interestingly, Apple has 137,000 full-time employees (this shocked me) — even though nearly all its production is outsourced to China — and it generated sales in 2019 of $260 billion, which is nearly the same as Exxon.
I think there is much more to investing that mega market cap stocks. And I will keep digging up the undervalued gems around the world for my readers.
Thanks for being one of them.
It’s interesting to see your plans have been brought forward and after reading your concerns it has further highlighted the need for myself to seek alternatives. I hope it is OK to share my situation with you: currently, [we] are wondering where our future may be with all that is going on in the world (we are in the UK) … I did wonder where else you may have considered living outside of Tanzania (anywhere closer to Europe perhaps)?
I have previously lived in Sweden who are also outliers in the handling of the virus but I can see how their economic outlook is still not much brighter in the long run.
Have been in Singapore for nearly 8 years. As you describe in your latest email I moved here from Belgium as I figured I could travel anywhere. Now since 19th of March the government has effectively closed the borders and bankrupted their national pride Singapore Airlines much as you described with Cathay.
I am a PR (Permanent Resident) yet we are not allowed to leave the country and there is NO outlook when things might improve.
Singapore has had 27 deaths since the first case was reported on 23 January. It is a total joke. There have been 0 people in ICU of hospitals for weeks on end.
I am not a fan of conspiracy theories but one has to wonder what the hell is going on if we become completely irrational over a disease that is not lethal to 99.9% of the population!
I wish you good luck in Africa with your investments.
I live in Hoboken ( 1 yr) … we lived in Bethesda Md for 3 years and before, that 20 years in West Village NYC.
Tomorrow we move to Big Sky Montana !
Ski town, no 5G and 3 miles from the Yellowstone Club where Zuckerberg and Gates have homes. Not intentional so the joke is on me. Interestingly, they don’t have 5G either. I think.
You have dashed my hopes that Bali would be a great move in 2 – 3 years.
Seems places to move to that feel safe are getting fewer and fewer.
If things heat up out in Montana or a call to fight, we may then in 1 or 2 years pick Costa Rica !!
The border closings cause a lot of issues for so many but one thing I will NOT take is forced vaccines.
Good luck in your family move. As a parent it really is tougher to convince everyone to get on board and then find schools and place to move to.
Please keep writing your blog to let us know how the rest of the world is and what is open for us to go towards.
We checked. They did earlier in the year. In fact a friend of mine did it. Now they are using hotels with soldiers standing guard.
We apologise to anyone who felt misled.
Our point remains. Severe border restrictions and harsh quarantine measures will do serious and lasting damage to the New Zealand economy.
Another reader, based in Vanuatu wrote in to make this exact point about Vanuatu. Where the virus has been successfully kept out or eradicated. Doesn’t seem to help much… (see his full comment on the next item below).
Liked your recent post in regards to your decision to move to Tanzania. I think it’s a great move. Are you taking your family with you?
As for me and my family we are stuck in Vanuatu. This is one of the few completely free covid 19 countries and to keep it that way they shut all the international borders. Just like you mentioned with no clear site and no plan on when to open them again.
I am very concerned about the future of the economy here, as this country has basically only 2 income streams tourism and Citizenship via investment. Since February the borders are closed which means no tourists and no one can come and have the Citizenship oath basically killing both income streams.
I am heavily invested in real estate here, which before the covid 19 gave me a nice 20% ROI.
Apart from that life is pretty much normal here. Last weekend we attended a Australian high commissioners birthday party with around 100 guests in a resort on a beach (I think only government workers are still spending large amounts of money in these uncertain times). The town is full of people most restaurants and bars are usually open. Tourism reliant business are really struggling and most of them are closed. Petty theft rated have gone slightly up, as many workers lost their jobs.
The government seems to be afraid of the Facebook mob here. The locals are very nice but mostly simple people and they are completely terrified of the virus. The large majority of the population wants to keep the borders closed, until the pandemic is over.
All I can do now is save cash, invest in your stock recommendations and wait to see what happens. I can’t really sell my properties here for a reasonable price now. With the borders completely closed and my capital tied up here I am pretty much stuck until something changes.
I enjoy your writing and your generosity of thoughts and stories. I believe the world would be a much better place if people shared more which risks vulnerability. And people should travel more. Anyone who can afford to travel should do so. It amazes me that so many have no interest in it or think they can’t afford it. Your last piece on moving to Africa is very relatable. My family spent about one month in Tanzania during a world trip in 2014. Met loads of great people on our travels from Arusha to Dars. It struck me that the country was filled with eager, young people wanting to make a difference. We did see some of the dark side including poverty and shakedowns by customs folks and traffic police. We were easy targets for touts and unfortunately were robbed – forcing a night of police interviews and reports and password resets. We stayed in accommodations that ranged from a humble charity’s hostel to a lavish mansion in Oyster Bay. My favorite places were a hut during a safari and an ‘eco’ resort in Zanzibar. The country has so much to offer that I would like to move back or at least start a business there. We are living in Macau currently, but this COVID thing has made a mess of things. …We are comfortable here, but bored. Travel options don’t exist with borders closed for non Macau/Chinese citizens. International teachers can’t even enter the country which is strapping the international schools here. …A work permit/visa doesn’t translate into the ability to leave or the right to come back. I think your piece nailed it. I don’t see things changing for a long time since there is no chance that the virus can be eliminated now when so many countries have screwed it up royally, especially the US. British Columbia in Canada has a working plan that I see as a model going forward, but logic doesn’t play much of a role in this crisis.
At this point, you might be regretting asking “What about you?” I will go on at the risk of continuing to bore you, I started a trading blog to demonstrate that regular folks can take charge of their own finances (rationalspeculator.com). I believe (hope) that the future holds more options for retail traders to take charge of their futures. Funds like yours make a great portfolio add in my opinion. I believe that the commodity trade is the place to be now, especially the junior miner sector after a 10+ year slump. My favorites juniors right now include FPX, FWZ, TK, MAX. There are others. I also use options/futures to enhance portfolios as well as use them outright to express opinions. I would appreciate any advice you would be willing to give on Tanzania, travel, investing/trading, my blog. Seems to me that we see many things similarly and I can’t say that has been my frequent experience. I’ve been investing/trading since high school, but you have a giant head start on me as I worked as an engineer for 25 years.
I wish you good luck with your move and with the fund.