Seek out an investment as you would a fine wine
t is interesting how often the standards set for excellence in one sphere are much the same as those in another.
Among my interests are good investments (obviously), test cricket and good wine.
T20 cricket to me is comparable to day trading on the stock exchange. It is not investing – it is simply a form of gambling. You are going out there and slogging with an equal chance of being bowled as of hitting a six. The investment version of T20 – day trading – can be equally hit or miss.
Test cricket, on the other hand, is a longerterm affair, with carefully pre- planned tactics. It is much like investing for the long term to achieve sound and sustainable returns.
Then there is wine. Good wine, like good test cricket and wise investing, needs expertise and time. I was reminded of this recently when the 2014 edition of John Platter’s seminal guide to South African wine was published.
The Platter’s South African Wine Guide was first published in 1980, beating Personal Finance by 16 years. It is the first and best wine guide in South Africa, and has won international awards – much the same status I like to claim for Personal Finance – namely the best of its kind in South Africa, whose staff have won a great many awards for excellence.
IAn important reason for our success is that we research and analyse as much as we can in the broad financial sector to help you understand what is good and bad. In turn, you can make considered decisions, enabling you to be a test cricketer or wine master in your personal financial decision-making.
The same applies to Platter’s. Over the years, it has developed a sound reputation for its presentation of what is good and bad. To achieve this, like Personal Finance, it uses people who are deeply knowledgeable about their subject. So, are there many similarities in selecting a sound longterm financial product and in selecting a Platter five- star wine? There are a number.
I asked the editor of Platter’s, Philip van Zyl, what judges look for in a good wine. He, in turn, asked
his panel of tasters to list the major attributes they look for in Platter’s five-star wines, criteria he endorses as well.
The criteria are divided into two categories: intrinsic and extrinsic factors.
In the table, I compare the criteria for a good wine with those for a sound investment. Not all are comparable, but most are.
So next time you sit down to look at your personal financial affairs, think of them in the context of a good wine!