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Only the paranoid survive

Why land expropriation without compensation could wreak havoc on your personal wealth.

Vitually all my adult life I’ve lived by the motto that “only the paranoid survive”, an old saying that also happened to be the title of a best-selling book by Andy Grove, one of the co-founders of the Intel Group, more than 20 years ago.

I didn’t trust my teachers at school, nor the dominee, nor my corporals in the army, nor a series of less-than-brilliant bosses when I had the misfortune of being formally employed.

Fortunately, I have been my own boss for more than 25 years now and my paranoia, by and large, has served me well. My successes have been my own while I have taken full responsibility for my mistakes — and often paid the price.

I don’t trust politicians or any bureaucrat who has the inclination and the power to want to control my freedom of movement, freedom of financial decisions and more importantly – ownership of my personal assets.

I’ve also met far too many ex-Zimbabweans, mostly ex-farmers or business people, who’ve told me their personal stories of survival (or not) after they were forced to flee their former prosperous farms with only the possessions they could get into the back of an old Land Rover or Humber.

It is therefore understandable that I am following the latest and rather urgent developments surrounding “expropriation without compensation” (EWC) and the stated intention of the ANC/EFF coalition to change Section 25 of the SA Constitution, the clause that deals primarily with ownership of property — not only land as some people seem to think. The issue of EWC has been bubbling under the radar for many years, but bubbling nevertheless.

It seems as if the mainstream media is so sucked up in the euphoria surrounding the ascension to the presidency by Cyril Ramaphosa, that few are daring to question this renewed haste for EWC. Even normally lucid commentators have abandoned all sense of realism, instead praising EWC as something that is needed to redress the sins of the past. At least Peter Bruce, columnist at Business Day, had the courage to state in one of his regular columns that it’s ‘Time to Panic’, one of the few to speak truth to the facts.

What has been noteworthy is that the business and investment community has been particularly silent on this issue. I could not find one article or comment from the investment community about what ordinary, middle-of-the-road investors should be doing. Either they are too petrified to speak or under strict instructions from higher up not to breathe a word about this issue, lest it become a career-ending commentary. 

My advice, dear reader, is not to trust any politician, banker, financial institution, spokesman for organised agriculture, media personality or whomever about the end result of what the ANC/EFF is trying to achieve: a complete and total confiscation and transfer of ALL property rights and ownership entitlements to government, without compensating anyone for this, as it is merely the custodian of all private assets in perpetuity.

Government did this with mineral rights in 2004 and now it is trying — and probably will succeed — to do it with ownership of private property.

In short: SA will become the first modern country in the world to try and take such a regressive step, something that has not worked anywhere in the developed world, and then to try and pretend it can do it without (a) affecting agricultural output and, (b) damaging investor confidence. The ANC furthermore thinks it will not have an impact on its credit rating nor the willingness of foreigner investors to put down money in SA. On all these counts it is wrong. You cannot ever get a scrambled egg back into its shell in one piece again. 

Good advice from Frans Cronje

For this reason I would rather place credence on what Dr Frans Cronje from the SA Institute of Race Relations (SAIRR) had to say recently.

Cronje is a fact-driven researcher and scenario planner and not prone to hyperbole. When he speaks I tend to listen more carefully. This is what he had to say during an interview with Alec Hogg on Biznews on February 17 this year.

“I don’t want to be in the position of a chap I once came across, who was a senior person in the Zimbabwean Commercial Farmers Union, and he said he has the great regret that at the time the invasions began he told the farmers to go back to their farms and everything would be fine. The law would protect them, the courts would as well, but he had a nagging feeling of doubt. They couldn’t believe what would happen next, and he says he feels guilty that there were people who listened to his advice and lost everything, when he should have said to them that when a government threatens you in the way that SA’s farmers are threatened – you should take those threats seriously and you should seek, where it is possible, to dilute the risk in your business.

There are various ways of doing that. If you’ve got kids and they’ve got the shot at spending a few years of working or studying abroad – it’s probably a good thing to take that. If you’ve got a little bit of wealth perhaps you would, and I’m not giving advice now, but you might want to go and talk to your advisor about parking some of that offshore. The way you survive volatile emerging markets is by having choices, and I think had Zimbabwean farmers, when the first chatter started, put themselves in a position where they had more choices, many of them might have lost less. The individual chap sitting on his farm today must think carefully whether he has options. If he does not, and if I was that chap, it would be justified to have some level of concern about his prospects in a future SA.”

Market reactions

Already the local markets have reacted as I thought they would. The rand has weakened from about R11.60 to close to R12 last week Friday while bank shares — which have loans totalling R180 billion to the farming community — have been sold down heavily. The JSE has been the worst-performing stock market over the past month — roughly since Ramaphosa made his EWC-speech in parliament (see table enclosed).

It’s not exactly the tale of foreign money pouring into the country. On the contrary…

Returns in ZAR

This will continue, in my view. It’s also telling that Cas Coovadia, speaking on behalf of the Banking Association of South Africa, warned that EWC is not the way to go, one of the few spokespeople to issue such a formal warning.

Contrast this to Jannie de Villiers, head of GrainSA, who was quoted on the Farmers Weekly website that “alles sal regkom, moenie worry nie….”.

Next in line: foreign investment allowance

My advice is to take heed of Cronje’s warning. The rich already have their Plan Bs, while the poor have nothing to lose. It is primarily middle-class wealth (property, pension fund, savings) that is at risk. If you don’t have some money offshore, do it sooner rather than later. If, as I expect, the rand starts reacting fully to these unfolding events heading our way, the foreign investment gates — currently still open — will close overnight.

And if Cronje’s warning is not sufficient, then read what the editors of the Wall Street Journal (WSJ) had to say on this topic:

“No country ever became rich through its government’s seizure of private property (exhibit A: The Soviet Union), but politicians in South Africa want to give it another go.

The idea is likely to duplicate the awful experience of Zimbabwe during the Robert Mugabe era, a case study that bureaucrats cannot distribute resources more efficiently or productively than the private markets. Mugabe’s confiscations spooked the investors, agricultural industry collapsed and a once prosperous country became known for hyperinflation and poverty.

Mr Malema may believe that the Zimbabwean model will lead South Africa to a “new vision of agrarian revolution”. But the ruling ANC is supporting the measures to distract attention from its own failed statist economic policies, which have produced sub-par growth and denied opportunity to poor South Africans. The first budget of the new president Cyril Ramaphosa suggests these policies will continue.

“South Africa needs more capital, more investment and a favourable business environment. Seizing private property has produced misery everywhere it has been tried. South Africans don’t need more of that.”

That, dear reader, from the foremost financial publication in the world. Its readers are the foreign investors who CR thinks will not be deterred by EWC. Think again. Remember one thing when it comes to foreign capital: it is cowardly of nature. It slinks away in the middle of the night without a peek or a boo….

What to do?

You can choose to ignore the potential threat to your personal wealth, justifying your inaction that not much will change, or that EWC will not damage the economy. The government has record of announcing grand plans but the execution has been a shambles, you might think.

Do you really think that the government could pull off EWC without damaging the economic fibre of this country? I personally don’t think so.

Make use of  your foreign investment allowance while you still can. It’s been a better investment than local investments for many years anyway. For years my recommendation to diversify offshore has been met with the reply that offshore investing is risky. On the contrary, we are now one of the riskiest investment destinations in the modern world.

Furthermore, open a bank account in a foreign country which will give you access via local ATMs to a debit card to spend your offshore money without having to repatriate your money via the local banking system.

Should you sell your farm/property? Farm prices have already dropped dramatically, I am told, while transaction levels have plummeted. The same is happening to prices of wild and exotic game. The prices of wild game — which until two years or so ago were in a massive bull market — have plummeted, with values for certain species now down 50% to 70%. Some breeds with unusual colour variants have become unsaleable. These things are all inter-related.

We will soon know how the farming community will react to this new threat to their wealth and existence. One farmer I spoke to had a sanguine approach to this issue: “I am the last in my family who wants to farm. I am going to farm the hell out of this piece of land until it is taken away from me. All the profits will be invested offshore as a nest-egg for me and my family.”

There might be other capital-rich farmers who might use the current bout of uncertainty to amass more land and farms, hoping that the issue will blow over once the government has worked out that the implementation of EWC is unworkable. That is the nature of things.

Residential property prices, too, will in my view, drop even further and one can expect a further freeze in the granting of bonds. Which bank will grant bonds on property while the issue of land ownership is being discussed? Residential property in certain rural areas is particularly vulnerable.

The quarterly reports on the housing market from FNB and Absa, expected early in April will make for some interesting reading already. But the full impact will only be clearly visible at the end of the second quarter, I feel.

Another place to look will be he quarterly reports on mortgage finance as published in the Reserve Bank quarterly reports.

South Africa has never been a boring country. The wild ride is about to get even more frenzied in the months and years ahead.

This column does not necessarily represent the opinion of Moneyweb.  

Magnus Heystek is the investment strategist at Brenthurst Wealth. He can be reached at magnus@heystek.co.za for ideas and suggestions.

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Absolutely, Magnus. In my opinion this is excellent advice and ignore it at your peril. Property is simply an asset. If the ANC can lay claim to one kind of your asset by “legal process” then they can simply expropriate anything they like. Your house, your car, your money, your pension funds, your shares. Take your pick.

The euphoria with getting rid of Zuma will be short lived. The bullion banks are already massing large rand short positions and are set to crash the currency with the help of their mates in the MSM when the EWC story bursts onto the scene. Externalise your wealth now in your own name. This is straight out the Marxist playbook.

I find the fact that there are still communist supporters abhorrent. Communism will always be a system of tyranny imposed from above using their “useful idiots”.

Jordan Peterson ( I’m a fan) recommends that every youngster with liberal leanings should read Alexander Solzhenitsyn’s book “The Gulag Archipelago”. I am busy with this now. What really astounded me was that during the German invasion of the Soviet Union, the invaders were welcomed as liberators and all the churches reopened. Such was the horror of Marxist tyranny. One can get a free copy and lean about it here:

https://holodomorinfo.files.wordpress.com/2013/09/gulag_archipelago_iii_text.pdf

If i am not mistaken Mandela was the greatest commie of them all! Pity he is portrayed as a hero today despite the countless necklace executions he made for his cANCer communist party.

Yip he and Winnie invented the necklace.

On a more positive note hopefully when CR starts the land committees and deliberations they may realise they are cutting off the legs and arms.
when they take the land, banks will collapse, and the supply chain will be destroyed.
Land will have no value so there will be no rates and taxes, no CGT when sold and no Estate duty when you die. No tax paid on the production of food the list is endless. That R50billion hole will be a little bigger.

Being a trader, I have always followed the trend to maximise profit. If you use the trend of following countries to make a trading decision, Angola, Mozambique, Zimbabwe, Namibia – then Magnus would be 100% correct.

Regrettably, the truth.

last time I followed your advice I got carried out being on the wrong side of the ZAR from 14.50. to 11.80. You need to update your message it sounds like you are aiming to be right at some point out n the future in a worst case scenario which keeps being put off.

Bit like Clive Roffey ( Roffey Review – BDTV ): ” I would be very careful about this market. Buy some gold ! ”
Rinse and repeat every week for a decade ….

Take a long term view. NOW is the time to rand-hedge. (as I doubt if the ZAR will go to R8/$). Just investment more. It’s called buying low…

Invest abroad for the right reasons…it’s a diversification and sovereignty hedge.

As the title suggests you may just be paranoid Magnus.
Paranoia is an animal survival instinct, very useful sometimes and although it may be prudent to listen to it, it is the intelligent man who is not governed by it.

…and to the families of the Jews in Nazi Germany, those who decided not to flee to the USA and neighboring countries, but rather be more positive/hopeful, so they stayed in Germany, as it wont happen to them.

History sadly tells us they ended up in Auschitz.

Ramaphosa prefers the slow cooking frogs to the gas chamber. Jump froggies! Jump!

AngeloJoe…..re think your thinking

Magnus’s perceived paranoia is suggestive thinking to plan from the worst possible scenario. Now that is intelligent thinking

Re think done. Okay, cool, I’m going selling up taking my cash off. Thanks. See ya in Perth

So what then is Moneyweb’s opinion on this issue….?

Magnus, the “big: money left ages ago – Most people are struggling to makes en meet as can be seen in the results from Woolworths (food and clothing) Curro (private schools) and Advtech (private schools). The JSE suffered because the Rand hedges (stronger Rand) and the likes of Steinhoff, Resilient etc. – Maybe comment on the overpaid and under-performing fund managers in SA? There is also huge risk in the interest rate rises in the USA and the UK – RE Forex: Treasury has actually increased the forex allowance for local asset managers and in RA’s you can now invest 30% offshore (up from 25%). The biggest threat to investment performance is expensive intermediaries (asset managers and brokers) stealing returns from clients – Why is Brenthurst Wealth pushing RA’s if your view is so anti SA? All your posts are negative Magnus and for selfish reasons….

Magnus is a troll who preys on the fearful and Moneyweb is manipulative media platform which censors content to enrich its stakeholders. Now there is some useful paranoia to take heed of.
Wouldn’t be surprised if this comment doesn’t make it past moderation.

So what are the positives in SA.

Cheap peasant labour

How should fund managers get paid then?

They shouldn’t unless they consistently outperform passive funds for 10 years or more.

When the range of potential outcomes is not normally distributed, but fat tailed, a healthy dose of paranoia is useful.

This rhetoric is the same as Zimbabwe – there’s a difference between before we were being fearful and now Government outright saying the fears. Now you have to take it onboard as a real risk.

The message is that if you aren’t diversified, you need to look at that, because if EWC plays out it may be catastrophic. That is a different message to EWC will play out as a certainty and run for the doors. So I would suggest that you have an asset allocation that is split between emerging and developed markets, taking into account the potential for theft, and ensure it is well-diversified, rather than just an SA house, pension and SA cash and shares. Been a good message for a long time, everywhere, Zim, SA, Germany, Hungary, USSR, and perhaps one day UK and US.

Besides, to quote, “It’s not paranoia if they’re really after you”

Hi all 🙂

Have a look today on Fin-24 fro Clem Sunter’s scenario planning article:

https://www.news24.com/Columnists/ClemSunter/the-latest-south-african-scenarios-flags-and-probabilities-20180319

(Still a 60% probability that SA will take the HIGH ROAD, & 30% Low Road, and 10% choas/war. All good and well….but that 30% & 10% ratios are STILL TO HIGH for comfort.)

however, not all those scenarios have an equal outcome – if you hit the high road you’ll maybe live in a richer country, and you will quickly acclimatize. However, under the low probabilty scenario the 10% chaos/war sceneario is a ruin scenario which wipes you out. Hence, you should take some precautions against high impact low probability tail risk.

Clem a serial optimist. He views are worthless.

You’re exactly right, Mr Sunter has always “prophesized” from an ivory tower, about time he took a lift down to the ground floor and got to know the nature of the beast!!

I am forever indebted to Magnus for the timeous warnings he gave many years ago on Tigon, Usapho trust. Fidentia and Masterbond. When financial advisors were pressing their clients to invest in these schemes, MAGNUS and the late finacial journalist of th FM were the only sane guys around. People around me lost millions. When Magnus says something, I listen very carefully. Thanks again, Magnus.

Let’s not forget about the sharemax saga, bernie maddoff and co, as well as cambist.

Brings to mind the Freakonomics chapter on randomness and guessing. If you take a particular position in the market, you are bound to be right sometimes/ eventually.

For example, the people who shorted the property market (a la The Big Short) in 2007 took a specific view and were proved correct in 2008.Their position was useful and correct. But lets say somebody had been doing/saying the same thing since 1994 or before. Even if their position is eventually proven correct, it doesn’t make them less wrong for the years and years of taking the same position previously.

Chilling and Cyril the cause of this. Right now he is worse than zoomer.

If he has some guts he will do something fast but he will not?

He is what he is …………….a child of Africa and will remain such. He should be pulling out all stops to pull our people out of their agrarian, ancestors (ffs), hand forever out, entitlement “mentality”. Instead he walks around preaching a healthy lifestyle. How about preaching the benefits of civilization Cyril?

One can but hope that he will do something to stop this property grand theft heist. He may be playing his infamous long game and change to something more civilised than grand larceny.

However, the longer he leaves it the less he will be trusted and the worse his so-called legacy will be in the eyes of civilization.

Remember that EWC was a resolution from the Zuma faction within the ANC. Cyril is just just having a lead in the NEC.

He has to stick to the parties resolution for now, until hope fully the law deals with the Zumanites through this year as he his also spearheading the uprooting of the corrupt.

If he goes against the ANC EWC resolution- this would give the NEC the opportunity to recall him and install David Mabuza who is waiting in the wings- then SA is well and truly finished.

be paranoid and be prepared, but lets not panic yet

if anc recalled cyril,they must say goodbye to 2019

Try to put aside all the current “noise” about EWC, and contemplate how South Africa will be 10, and 20 years from now. Consider our future leaders when pondering about this, and the fact that an overwhelming majority of Parliament voted for a review of property rights as set out in the Constitution. I have said before that EWC will become a reality under the rule of our current leader, or the next, and I still hold this view.

Magnus, could you give your readers a bit more insight into this comment:

“Furthermore, open a bank account in a foreign country which will give you access via local ATMs to a debit card to spend your offshore money without having to repatriate your money via the local banking system.”

Are you referring to an account held in the BVI through an offshore bank, or one via our local banks that’s held offshore (Standard or FNB comes to mind), or one through residence in another country, like through HSBC in the UK? Does it require a foreign passport?

Would be interested to know what has worked for people, at reasonable cost, and which ones let you use the debit card here as mentioned in your quote.

Great question. My mind went there too. Surely a bank with limited RSA exposure, so they will have the balls to stand up to the Government, when they try to expropriate all the financial assets (in a worst case scenario).

So a FNB Channel islands or Investec account, appear to not be fit for purpose, as they have way too much on the line here, so will cowtow to this government… WHile hopefully a proper offshore bank, will be far more reluctant.

Yes Magnus , are the offshore FNB or SBK fine ?? Thanks in advance

Johan

You can open a bank account with commonwealth bank in Australia with a fair amount of ease, you don’t need any specific Visa or anything like that, you may need to come for a holiday to open it though as well as to find a local address to ship you card to. No such thing as FICA and all that crap.

Thanks

AfrAsia bank in Mauritius provides this service. Offshore bank account, no ties to SA besides an office. Have a look

Sadly, it is difficult to argue with Heystek especially as WMC (white money concerns) are likely to become a self-fulfilling prophecy.

However, to put some balance into the discussion, since WWII property prices have had a roughly decade-and-a-half cycle:
1945 – 1961 (Sharperville crash)
1961 – 1976 (Soweto school revolt)
1976 – 1990 (FW de Klerk’s Rubicon crossing)
1990 – 2009 (Zuma election)

What has saved the country has been the fall in the rand, with too many middle-professional class trapped as it takes a few million rand to emigrate successfully with a family. (Who wants to swop a house in Rondebosch or Emmarentia for a hovel in Melbourne?)

Apart from Cronje’s sensible advice to diversify jurisidictions (but – seriously – how many can afford to squirrel megabucks offshore?) the best investment remains education and assisting the opposition to restrict the ANC/EFF political support. “For evil to succeed, it’s sufficient that good people do nothing”

Good points overall. The cost living is certainly a trap for most middle-class locals…..we wont be replicating the same (high’ish) standard of living in Aus/NZ/UK etc (unless it’s matched by a great employment offer)

Luckily Europe has 50 countries, and have found countries with living costs more or less on par with SA, many with towns of beautiful historic charm, steeped in history, and being much safer to retire.
(…but it will entail learning a foreign language)

So when my weekly gardener arrives, I greet him in Russian, or Bulgarian, or Serbian, or Slovak. He thinks I’ve gone mad…

“with too many middle-professional class trapped as it takes a few million rand to emigrate successfully with a family. (Who wants to swop a house in Rondebosch or Emmarentia for a hovel in Melbourne?)”

You’re making a valid point but I just want to add that this “trap” is all in the mind of the person who wants to emigrate from SA but is (rightfully) concerned about a drop in their standard of living. Moving countries has taught me two life lessons that most black South Africans already know: (1) I do not NEED most of the things I thought I needed (these “needs” are actually a burden to me because I have grown dependent on them) and (2) I can take on ALOT more stress than I ever thought I could, without compromising my happiness at all!

For example, I thought I needed a domestic worker and gardener. It’s true that SA is structured in such a way that you DO need this help to survive but in Canada you do not. Companies know that you have to go home and do housework, everyone does, so the standard that is expected of each worker is lowered. My husband finds in relaxing to come home early from work (this is standard in Canada) and shovel some snow or mow the lawn. He gets exercise and it clears his mind.

I do washing and cleaning up as I go along on a daily basis, virtually in my sleep these days. It doesn’t even register that I’ve done it, let alone stress me out! Infact, I love having my house to myself and knowing that it looks good because of my efforts and not someone else’s. I don’t miss feeling guilty and in a permanent child-like status because I don’t make my own bed. There’s really nothing frightening about cleaning your own mess, infact you feel promoted to adulthood for the first time in your life 🙂

Canadians don’t expect you to iron all your clothes and you don’t own the type bed linen that needs to be ironed. Suits are dry cleaned and collected (you wear them every day) and work shirts are the iron-free type that come out of the tumble drier uncreased. Canadians drive around with the exterior of their cars dirty most of the time: honestly, who cares?? Quality time with your family is far more important than putting on a show for a complete stranger.

It’s true that hired help with the kids is finically out of reach for most Canadians but younstart to love having them with you every moment of every day because Canadian society is geared for that so you will adapt. Also, there’s a secret to emigrating when it comes to children: they are much, much easier to manage when they don’t have two centres of authority (like you and their granny / the domestic worker). They also quickly realise that they have you all to themselves now, so they don’t need to “act up” to get your attention. After an initially painful adjustment period, my family is such a tight, happy little unit since we moved to Canada.

When you don’t have help with your kids, you are forced to get out more than you would have. Initially it is awfully over-stimulating and annoying but you adapt and learn to love it. Canadians take their kids everywhere, but everywhere, with them, so adults in public places are socially required to be tolerant and accommodating towards children. It’s so much easier and fun to go out with your children when you live in a family-oriented society (where people don’t give them dirty looks for running around and making abit of noise). When it comes to happy, noisy kids running all over the place, I never ever thought I would “part of the solution” but now that I’ve changed my mindset, I am happy to be just that.

It’s true that you will have a grubbier, smaller home in Canada but at least you know it is YOURS and no one can threaten to take it away from you. Within time, you will not even be viewed as an immigrant, let alone a “colonial invader”, which will give you a sense of peace and freedom from anxiety. Once you have that feeling, it will be much easier to reach out to others and to ask them for help when you need it. That’s what a community spirit is all about and, when you don’t have a lot of disposable income and hired help, you discover the joys of interdependence with your neighbours. Freedom from crime means no walks around your house and no locked doors. You can walk straight into your neighbour’s house, literally, and ask for help when you need it!

I could give you many, many other examples of why we don’t need all these “luxuries” we think we have and how the idea that we “need” them is actually an impediment to our happiness and peace of mind. Once you have “lowered” your standards, you will quickly realise that what you’ve actually done is made your burden of perceived dependence lighter and, having less to lose, you feel free and independent of want. By losing everything, you can gain anything: that’s the secret to why EFF cadres are always laughing, dancing and singing 😉

Thanks Alannah for an insightful & thoroughly enjoyable read. Refreshingly different viewpoint, based on your actual experience. (…you provide more info than some bloggers on ExpatArrivals website 😉

Hold the bus…

Which bank account should we open and how safe is that again?

….I wanted to give you a hint of a good local bank, then realised all local commercial banks have the same sovereign credit rating as the country: non-investment grade.

Invest abroad & but have all your debt in SA? 😉

There is much more bonds being granted in 2018 than there was during the 1st quarter of 2017. so the banks know we are not going the Zim route and ewc might only be used in extreme scenarios if ever. we all know expropriation already happens regularly and could be used much more (at close to market price levels) without affecting the economy in any big way or scare off investors. we just need certainty after the next elections. the ANC will surely play the card to make sure EFF doesn’t grow by much.

As I type this, I am literally about to board a plane to begin my new life in Australia. I sold my property in a security complex in Cape Town within a week, having received 2 unsolicited offers. A good time to take advantage of the Ramaphosa honeymoon exchange rate.

I do think Magnus’ predictions will come true, whether it is 1 year or 10 years. The smart money left long ago but there is still a chance to make a quick (ish) exit.

I have been absolutely blown-away at the manner in which intelligent people have decided to approach this problem. Government says “don’t panic” (like we would trust you) and people tell me “the conditions are very onerous and it’s just politicking” (still it’s theft and private property is the cornerstone of democracy). As Will Farrell’s character in Zoolander said: “I feel like I am taking crazy pills!”. Why are people pretending like this isn’t a big deal?

How about the scenario that it is simply politicking and Ramaphosa never follows through. As a billionaire, you’d imagine he fully understands the implications of what he is doing. But what about the next president? Are the ANC likely to be power in 10 years? Yes. Do they have any right-minded leaders either current or upcoming? No ways.

It’s a classic case of the frog in boiling water. I fully understand the cognitive dissonance in living in SA and being extremely negative about the future. I’ve been there. I’m taking my money and running! Like the Zim farmers and the jews in Nazi Germany, this move by the EFF/ANC is a warning that is best heeded.

Good luck Mate! Moved here 3 1/2 years ago. It’s the most difficult thing I’ve ever done and in the early days you will certainly have many “what have I done” moments, but as you push through you will come to realise that you made the better decision than you realised at first! Where about will you be moving too?

Thanks! We initially based in Adelaide but looking to move eastwards to somewhere peaceful in rural Queensland or NSW. Definitely going to be the biggest challenge we’ve had to date, but the right move for my future family!

Good for you and wishing you all the best! My husband and I moved to Canada with our two young children three years ago and we are very happy now that we are settled. It was the hardest thing I have ever done in my life but we have adapted and we are happier than ever. I’m sure you are going to go through some tough moments but you will not regret this decision once you have made yourself at home in your new country!

You lucky bastard. Hope you make the best of it. Good luck
!!

Magnus, ive met my match in political and economic paranoia. I thought it was only me who thinks like this. Phew, what a relief!
All your advice is good advice and I’m pretty sure the Aussies will let us open bank accounts that we can access remotely through our ATMs here…and who knows, after Brexit maybe the Poms will be begging us to do the same!
But… before we get too carried away…please read what advocateTembeka Ngcukaaitobi, has to say on this EWC issue – and he has served as a presiding judge in the Land Claims Court , so he knows a thing or two….

“ it would be foolish to tinker with the property clause of the Constitution as demanded by the EFF and recently resolved by the ANC at its 54th elective conference.
It is a myth that the constitution is an impediment to land reform -it already provides a progressive and effective mechanism for land reform and redistribution”
He also points out that the property clause ( Section 25) already enables expropriation without compensation including
– when land has been acquired by fraud or criminal activity such as inner city buildings being taken over through unlawful occupation.
– where land is unused and has been acquired simply for speculative purposes with no intention to put it into productive use
-where there are labour tenants – people who have provided their labour as a form of payment in return for rights to live on a section of farm
– where a landowner is hopelessly indebted and unable to repay the bank loans

These are some of the instances where expropriation can take place without compensation and WITHOUT having to tinker with the Constitution.

Cyril has a battle on two fronts – he has to keep the EFF at bay ( eventhough in my paranoia I believe they are just a covert branch of the ANC). And he has to keep the Minorities ( taxpayers!). happy!

So let’s not panic just yet. If the new reforms require a change to the wording of Section25 of the Constitution – then that’s when we panic!

PS – Bye bye Gary Porrit – all the above reasons for EWC apply to you!

One has to ask oneself: does the possible adverse effects of falsely panicking outweigh the adverse effects of a false sense of security? In my case: I’m going to start building my ark, I think the flood is coming. At the very worst I will be wasting my time, but at least I will have learned a thing or two about diversifying along the way…

Lets be realistic. There can be no rational land debate:
Those opposing it are in the minority.
The way it has been framed by parliament and promoted by certain political parties has already created the expectation.
Regardless of the outcome of the debate, lab grans will intensify with support from said political parties. This is clearly evidenced in the recent attempts at land grabs,
Unfortunately the whole matter has been mismanaged.

A second concern is governments unwillingness to support the Constitution. There have been three recent calls from government to amend various sections of the Constitution, not just section 25. This is perhaps the most serious threat to democracy.

Under the circumstances, the advice to diversify one’s investments with an offshore portfolio would seem prudent.

The S&P return (one year measured by ETF called SPY) is 16% not 4%

But, most wealth destroyers would not be pointing to a fund with a 0.09% expense retail buyer ratio as it does not really sit nicely with their usual fees and they would NEVER benchmark against SPY – I think a mere 3 trillion runt lightweight nobody bygones fund

As to property, the ANC should start with Clifton, Houghton, Constantia, etc – farming is hard work.

May I say MSCI World and Emerging Markets are negative in Rand terms and have been since december, I know my portfolio has never turned positive from that period.

Therefore I would be critical of Magnus figures.

Be careful of following paranoia, so many have lost money and may continue to do so.

Meant those portfolios have been negative and they haven’t been positive in rand terms since December 2017… so those figures really not helping if in rand terms JSE is less negative

I honestly cannot see the worst case scenario play out here…thanks to the markets.

But I also don’t see the best case scenario.

Still, I agree, just invest offshore – it’s the safest strategy. Why betting on politics ??

Uitstekend Magnus.Een ding wat ek nie verstaan nie is dat die ZAR nog onder R12 is. Met al die ooglopende gevare wat ons in die gesig staar sou n mens verwag dat die geldeenheid baie swakker sou wees.

The ANC has caught the public hook line and sinker, again, with their motion on land issues. Since 94, before every election and after every ANC induced disaster, the ANC has used land issues, sports quotas and white racism to draw the attention away from their mistakes.

This motion has immediately removed State Capture and the major damage it has done from the agenda. It also pre-empted the EFF, split the EFF and DA municipalities and split the DA on the inside. Brilliant politics at a cost to the country, still. Little will come of it, some tribal land might be privatized, that is all.

I will, however, send money overseas, based on inflation differentials, Malema and the ANC.

If we step aside from the political comment, scaremongering, emotional rhetoric and self-serving commentary, a core tenant of sensible investing and wealth preservation is true diversification of wealth. This point comes through clearly in the article above. We at Brooks Macdonald International have been providing real international diversification to South Africans under our Category One FSB licence through quality independent investment advisers for some years now – under the offshore investment allowance mechanism. Speak to your advisor to find out how accessible and cost effective our services are, from $25k / £25k or Euro25k minima.

Why would anyone put all their eggs in one basket?

Wishing all our SA clients and business partners an enjoyable and relaxing Human Rights Day…

My issue as a young middle-aged,maybe above average financially speaking, man: we religiously save and build up a home and savings for our family and future wellbeing so one can pluck the fruits of your hard work at various stages in your life. We do it and we enjoy it because it is in a man’s DNA to see your little nest egg grow and to build something…even if it is by a few thousand net a month. The problem is that we have at no time in the last 10 years been afforded the opportunity to enjoy or feel accomplished by this little nest egg here in SA as the threats of it all turning to dust has been ever present. And I mean all the time. Any cash,property even pension fund has been at constant risk. How long are we suppose to live with this underlying fear of turning 70 as a ZIM farmer waking up with nothing but the clothes on his back? This country is demoralising and sucking the live out of the middle class man. THe best advice I read from someone on a moneyweb tread was to move ALL your assets offshore and be a “tourist”in this beautiful country. The political climate will have no impact on you. Trust there is still time for me to move more than 50% of my assets.

So if you are really negative about SA:

Best option is emigration – Just be aware of the culture and cost of living – In Aus/Canada and New Zealand etc – you are probably buying at the top of the property market.
– Its probably the hardest to leave behind family and friends 🙁
– BEFORE you leave for AUS read the news on ABC.net.aus for a couple of weeks (Have a look at what the recruiters don’t tell you)
– Interest rates WILL rise in all the lovely 1st world countries – Their stock markets have performed because that’s the only place you get a decent return (no return on money market investments)
– If you want to invest offshore use the Easy Equities platform – Cost of investing a 100 dollars is 0,64 cent! so 0,0064% – You can buy shares (Apple, Amazon, Netflix, Berkshire and if you prefer low cost ETF funds Vanguard, I-shares etc. I can do a transfer from my FNB account to Dollars and it reflects in their (Easy Equities) US account in two hours.
– Diversify by all means but don’t use expensive channels that destroys value and only enrich the intermediaries –

Even if Gov shares 1,22 trillion m² equally with approx. 55 mill people is 22,181 thousand m² each. e.g. in 20 to 30 years time Gov will have to share land again as the population may have doubled. So Gov will take all our land and divide it again. How else will they solve it?

We will never effectively own land, Gov does! If we buy it or get our patch for free we are paying rates and taxes for the use of it, right?

Every day a child is born, it’s another piece of land that has to be made available, makes a person wonder?

The next generation/new borns will be pumped with even more propaganda from the next 20 years mistakes and it will repeat itself, whilst all the Gov officials have lined their pockets again…and again…

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