Au­thor missed point on shares

The Star Early Edition - - LETTERS - Dr Peter C Baker

I RE­FER TO the ar­ti­cle on BEE by JJ Ta­bane in The Star, Oc­to­ber 9. I think Ta­bane missed the point re­gard­ing the pur­chase or gift of eq­uity shares in a com­pany and what it means to the owner of the share cer­tifi­cate.

The beauty of the cap­i­tal­is­tic sys­tem, which we sort of es­pouse in South Africa but which is sadly so skewed that it can­not re­ally be called a gen­uine cap­i­tal­is­tic sys­tem any­more, is that it is geared to peo­ple will­ing to take a risk to make a profit.

The is­su­ing of highly pref­er­en­tial priced shares to a sec­tion of the pop­u­la­tion who have by and large no ex­pe­ri­ence in the op­er­a­tion of any large cor­po­ra­tion, is just so bizarre and un­re­al­is­tic. I just won­der how many poor town­ship dwellers or low on the totem pole South Africans re­ceived th­ese bak­sheesh shares?

But hav­ing said that it was done; many peo­ple owned shares in a ma­jor South African com­pany and stood to make huge wind­fall prof­its. This is un­fair to ev­ery­one but those granted th­ese shares. But alas, this is the real world and life is a game of snakes and lad­ders: you win some and you lose some. That the poor souls granted th­ese dis­counted shares, (fi­nanced by Sa­sol, which I also pur­chased at what­ever the pre­vail­ing price hap­pened to be), suf­fered a loss on pa­per when the share price went down, is life in the big city. You hit a snake, you take a slide and hope that later on you hit a lad­der. It is ridicu­lous to think that Sa­sol must feel obliged to lis­ten to the opin­ion of all the small-time in­vestors such as me and the thou­sands of other South Africans, and the black peo­ple given shares, un­less th­ese mi­nor­ity share­hold­ers join forces and be­come a united vot­ing bloc. That will never hap­pen so the small share­hold­ers must rely on the ex­per­tise of the peo­ple run­ning the com­pany.

That the black Sa­sol share­hold­ers now feel they must be given the pref­er­en­tial shares but must also be in­su­lated from the ebb and flow of the mar­ket place in the real world is plainly in­sane. Ei­ther you in­vest and take a cal­cu­lated chance, or you stay out of the mar­ket. I find this at­ti­tude of en­ti­tle­ment to be the writ­ing on the wall.

Th­ese play play cap­i­tal­ists must just be hon­est and just de­mand a very large wel­fare cheque with­out the need to stand in a queue.

In­vest and take a cal­cu­lated chance or stay out…

Park­town North

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