SURELY NOT?

Finweek English Edition - - FEEDBACK - Fin­week John Simp­son Fin­week Alex

I bought the Fin­week 28 Fe­bru­ary 2013 edi­tion to ea­gerly read the ar­ti­cle Top Se­cret – the most im­por­tant f inan­cial ar­ti­cle you will ever read! No mod­esty here...

In the ar­ti­cle you write about com­pound­ing “when we at Fin­week…” and show a graph of how R10 000 in­vested at Al­lan Gray on 15 June 1974 would to­day be worth R114.9m. In­ter­est­ing you add “be­fore fees”, how can you not deduct fees if you are giv­ing a mean­ing­ful pic­ture? Or is it pos­si­ble for me to in­vest there with­out hav­ing fees charged? If the fees ac­counted for, say, R900 000 then the growth would still be as­tound­ing.

So much so that I be­lieve it is not true, I have not done the maths, I failed stats twice. How­ever, I be­lieve that you have got a mis­print. If I am cor­rect, then Fin­week can give me two years’ free sub­scrip­tions, and if I am wrong, I will do­nate R1 500 to a char­ity of your choice.

I was most sur­prised not to see an er­ra­tum in the cur­rent week’s publi­ca­tion.

Thank you for the mail and the feed­back on the ar­ti­cle. It is al­ways nice to in­ter­act with read­ers and to be kept on our toes.

With re­gards to the query con­cern­ing the fees, I agree 100% that one would need to take fees into con­sid­er­a­tion to get a real pic­ture of in­vest­ment re­turns. How­ever, the point that the ar­ti­cle was mak­ing was around the power of com­pound in­vest­ment re­turns. Play­ing the devil ’s ad­vo­cate here, it could be ar­gued that ir­re­spec­tive of whether your in­vest­ment was worth R114.9m or if we – un­sci­en­tif­i­cally – de­ducted 38% (1% for ev­ery year be­tween 1974 and 2012) a to­tal in­vest­ment value of R71m still re­mains a sig­nif­i­cant nest egg.

With re­gards to the ac­tual value, it is not a mis­print – the num­ber is pub­lished on the Al­lan Gray web­site (www.al­langray.co.za) and the com­pany con­firmed to us that the num­ber is au­dited and cor­rect. In­stead of putting money into a specif ic char­ity, my sug­ges­tion would be that you visit www.sasix.co.za and open a “giv­ing ac­count” there where you can iden­tify projects that you are passionate about. more in­for­ma­tion about the pro­gramme and what it is try­ing to achieve. In 2012, Fin­week part­nered with the team from busi­ness ac­cel­er­a­tion f irm Aurik to iden­tify 10 high-im­pact en­trepreneurs in Gaut­eng to re­ceive R2.5m in busi­ness devel­op­ment sup­port. In a nut­shell, we were look­ing for 10 en­trepreneurs who needed guid­ance and in­ter­nal sys­tem devel­op­ment and tracked their devel­op­ment over a year. Th­ese en­trepreneurs have devel­oped their busi­nesses sig­nif­i­cantly over the last few months and many of them have been able to in­crease sales and rev­enue by more than 100% and are busy ex­pand­ing into new mar­kets. One of the key fac­tors about the BizAc­cel­er­a­tors ini­tia­tive was that we have been able to go be­yond sim­ply pro­fil­ing en­trepreneurs and have been able to track them, tell their war sto­ries as well as their success sto­ries. Based on the success of the pro­gramme in 2012/2013, we are ex­plor­ing op­por­tu­ni­ties to take the pro­gramme be­yond Gaut­eng. With en­trepreneur­ship be­ing such a crit­i­cal part of the devel­op­ment of the South African econ­omy, this kind of pro­gramme is im­por­tant to en­cour­age peo­ple to con­sider start­ing to their own busi­nesses.

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