Read attached.
That's quite sobering reading...
******was going to chuck this into chat, but figured it's too long and has a pic, so chucking it here as it's kinda on topic **************
Patrick, looking at the R/$ chart since 1995, do you think the rand more more likely hit R10/$ or R20/$ in 5 years time? How much of the growth in the JSE has just been the devaluation of the rand and not actual growth?
For me, the rand is becoming a very fragile currency - as we've seen with nenegate - it's doesn't take much to rock it badly and I think people need to plan for it. Personally, I have a pretty bleak outlook on the country - even if we say goodbye to Zuma, the rot is too deep - and if the EFF get in, well, that's just curtains.
On the bright side, there are plenty of ways to invest in hard currency alternatives - without your money leaving these shores. From dual listed companies, to companies where most of their earnings come from overseas, to pure oversea plays incl. the DBX's and of course, some lovely overseas REITS that also give you a hard currency income.
Someone with a gift for writing and an interest in the subject should consider writing a blog on the subject....
5 Years, definitely R20 before we see R10 again. The question is, will the market outpace the depreciation in the currency. The last 12 months was a complete loss. The other factor moving me towards getting my money out sooner rather than later is that the longer I wait, the more I'll have to pay in capital gains. It's not even really capital gains, but really just an inflation tax, which sucks even more.
If we'd stayed in the early R14's where we were a few weeks ago I would have made the transfer, but before I could line things up we were staring at R16 again...
I'm in the last few years of my working career, so I just don't feel like taking on this massive currency risk right now. It makes planning for the future nearly impossible.
Then there are a few things keeping me with my money in SA:
- Orca says our market should outdo the US/Europe. He's far better at calling these things than I am.
- The ANC could lose a few metros, and maybe even then recall Zuma
- The public protector is investigating state capture, the odds are she will find something very wrong with Gupta and Zuma
- People say ratings downgrade is already priced in, so it won't be too much worse even if we do get downgraded
