The series started in the first week of April (Week 1: From the living room: Markets and Human Bias) when “the world was scrambling for answers”. Steven jumped straight in, warning clients to try to stay focused on their long-term plan no matter what was happening in the short-term.
The JSE had fallen by about 35% in response to the crisis, but had already begun to recover some of those losses and was then down about 23%.
Warning that there would likely be a lot more volatility to come, Steven was already taking a long view on the recovery. He talked about “fast-forwarding by 12 or 18 months”, or even “2 or 3 years” to see a return to some sort of normality.
In the second episode (Week 2: From the living room: The good farmer –
market review) a week later, Steven compared investors to farmers. Like the good farmer who must deal with chaotic weather and diseases, he said long-term investors knew there would be crises, and periods of utter despair interspersed with periods of euphoria. Fortunately, he added, investors had long-term investment principles to guide them through the good times and the bad.
The idea that investors should stick to their long-term plan was very much a theme throughout Steven’s video series. Basic good investment principles will serve you in good times and bad. Another one of the basic building blocks of a good investing practice is diversification, which is known as the only free lunch in investing, which Steven covered in episode 11 (Week 11: From the living room: Portfolio diversification) of the series:
In episode 12 (Week 12: From the living room: Under-funding of pension funds), when Steven talked about the under-funding of pension funds around the world, which will mean broken promises for so many pensioners, he discussed another basic building block: constructing a sensible and realistic retirement savings plan.
Steven frequently devoted his briefing to unpacking relevant aspects of portfolio performance. In week 3 (Week 3: From the living room: 10X portfolio performance YTD), discussing the continuing recovery in the markets, Steven explained that the different 10X portfolios were doing what they are supposed to do: protecting capital for those very close to retirement and needing their money soon, while those who are further away from retirement and are more focused on growth are more exposed to the equity market.
In week 6 (Week 6: From the living room: Disconnect between economy and markets), he talked about the seeming disconnect between the economy, “the really bad news we hear about, day in and day out”, and the stock markets, which were doing quite well. He explained how the stock markets look at things on a forward basis. “They are trying to anticipate what the environment will be like 12 months down the line,” said Steven.
In week 4 (Week 4: From the living room: Active versus passive in the downturn), Steven took the opportunity of being mid-crisis to unpack the claim by active investment managers that they would be able to protect investors in a crisis. (Spoiler: They weren’t)
Referring to a Daily Maverick article that looked at an intense 4-week period, from February to mid-April, when the markets fell quite significantly, Steven confirmed that active managers had failed to deliver on their promise, with the top 10 active funds trailing the JSE All Share by 4%.
He revisited this topic in episode 9 (Week 9: From the living room: 10X beat the competition up & down) and again in episode 10 (Week 10: From the living room: 10X Asisa performance) in both cases looking at new data from the market.
Looking beyond the action in the markets, in week 5 (Week 5: From the living room: Covid-19 research & old style policies), Steven looked at data coming out of a weekly Covid-19 survey of economically active South Africans to see how the nation was coping with life in lockdown, including their views about their finances and investments.
In week 7 (Week 7: From the living room: Advice to Cyril) Steven wrote an open letter to President Cyril Ramaphosa, adding his voice to that of many other South African business leaders who had outlined the advice they would give the president if they had three minutes with him.
In episode 8 (Week 8: From the living room: The sharing economy), Steven talked about the sharing economy and how 10X clients being great ambassadors had helped to cut out the middle-man.
In week 13 (Week 13: From the Living Room: When 3 weeks became 13) Steven wrapped up the series by remembering his guidance in the first episode that investors should stick to proven long-term investment principles and not worry too much about short-term volatility, of which there had been plenty to reflect on.
