#319: Keep the winners

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Simon Shares

• Jacques Magliolo and Business Consultants International (BCI). Two people have recently emailed me about this gent and his company specifically about the FSB warning against him and the company in September 2017. One emailer has already lost money the other wanted to know if he should worry about this as he wanted to invest money. Simple answer is always do a Google search before invest and if you find a FSB (or FSCA as they're now called), be very worried and run away. 
• Last week I warned to stay away from Safcoin and offered them the right to reply. I have heard nothing back from them so I assume they happy with what I said? Further Twitter has dug up a lot more making the whole Safcoin even more dodge.
• Lots of panic about the Tuesday evening statement from President Ramaphosa regarding land restitution without compensation. My advice (and this always holds true). Before checking the screaming Twitter and media headlines read the actual statement and while you're at it also read the ANC statement from the 2017 elective conference at Nasrec.
• I am getting a lot of questions about impact farming from, specifically the offering from the Fed Group. A few questions in return. Counter party risk is likely very low here, the Fed Group are legit but that doesn't mean the impact can't go bust - just that Fed Group unlikely to run away with your money. Bigger question is why do you want to start investing in alternative investments? The returns are more or less in line with long term JSE returns, but they have to be at a higher risk (less over sight, niche, new etc.). At best this really is for your FU money that you would otherwise use to invest into Whisky and then drink one dark night.
• Ellies (JSE code: ELI) results show HEPS of some 8c while price is 32c - a historic PE of 4x. They looking good but aren't totally out of the woods and this is a risky punt.
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Keep winners. Sell losers

From time to time people ask me about their portfolio. In all cases they wanted to sell their winners and keep the losers.

I've been there. In the late 90's I was off on a holiday and needing some money figured I'd sell one of the two warrants I held. One was a winner and the other a loser, so I sold the winner. The emotional reason was simple. Sell the winner to lock in the emotional thrill of a winner and keep the loser in the hope it'll become a winner and I won't have to have the emotional hit of a loser.

Of course this logic was kinda like marrying your ex.

The wining position is what we should be keeping. It is winning which means we're on the right track and the loser is showing us we're wrong and we should get off that track.

My trick for selling losers is simple. Sell it, delete it off your watch list and never look at it again. Go so far that if I am talking about it here, jump ahead. If BusinessDay TV talks about it, mute the sound for a few minutes. Just get it out of your life. This we we have no FOMO.

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