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In the world of finance, the role of a Portfolio Manager is often wrapped in intrigue, stocks, and investment strategies. In our latest series, ‘Get to know Your Portfolio Manager’, we uncover the story behind the man whose passion for markets is as evident as his love for the outdoors and his hometown of Port Elizabeth (Gqeberha), otherwise known as the Friendly City

This month marks Nicholas’ third year at Sasfin. He left Investec Sandton to set up his own business unit at Sasfin in his beloved town of Port Elizabeth. 

With over a decade of experience in the investment industry, Nicholas identifies himself as both a Portfolio Manager and Stockbroker. He has a keen understanding that stockbroking involves short-term skill, while portfolio management requires a longer-term outlook.

“I believe that a person’s interests and personality draw them to a particular career. In terms of interests, I have always been fascinated with how companies and economies operate. A book worth reading is “Why nations fail” by Daron Acemoglu and James A. Robinson. You can predict the future by analysing the past, those who do not learn from history are doomed to repeat it. I think generalists and futurists make for the best Portfolio Managers, you need to understand the world and where it’s headed to know which companies will thrive. Wallstreet laughed at Elon Musk for listing an electric vehicle company and in June of 2010 the share listed at $17 a share.”

Let’s take a glimpse into Nick’s daily routine, which starts early. “I review how the US markets closed and how the Asian markets opened. I try to exercise every day — whether it's a trip to the gym, indoor cycle in winter, or outdoor cycle in spring, summer, or autumn. I am, however, a new dad to twin boys who are now my morning workout."

As he enters the office, the mood is often determined by the state of the futures market and based on how enthusiastic the “howzit” is from his colleagues he knows what the day has installed for them.  “While we stay unemotional in our decision making, we can’t help but be affected by the markets as we watch them all day.”

Nicholas gives his tips on what he thinks is the biggest mistake that investors make, and how can they avoid it?

“Don’t buy into hype around a stock, the news shouldn’t outweigh the fundamentals.” 

He adds that; “being emotionally tied to a share that has gone down.  Never forget, you can always buy back.” 

Rather invest in an A-Team in management with a Plan B than a B-Team in management with a Plan A. Key decision makers will determine the long-term growth of a business.

Never rush into buying or selling, as a rule of thumb if you wanted to purchase 100 shares rather buy half on the day and average in over time.

Lastly, never be too trusting of all the optimism CEO’s might portray, the proof is in the pudding which in this case are the numbers and not always the promises of a great future.  In the markets you think you’ve seen it all and then a “Steinhoff” happens.  Nicholas shares that during the Steinhoff crash of November 2017, he lost his voice after making and managing over 300 calls a day while sitting on the advisory stockbroking desk and had to convince his family he hadn’t taken up smoking.

Nicholas’ story brings a breath of fresh air to the often-serious world of finance, showcasing the blend of passion, curiosity, and resilience that defines a successful Portfolio Manager.  Sasfin recently sent Nicholas to Copenhagen, Denmark to attend the Saxo Bank partner conference and he explained the importance of exploring the world.

“I have been fortunate enough to have travelled a large part of the globe and I think it has played a great deal in my understanding of the global market.  In Copenhagen it was incredible to see their drive to be carbon neutral.  Despite the cold I had never seen so many cyclists in my life, and I later learned that a lot of the bicycles were state subsidised and there were 20% more bicycles than people.  All taxis were electric, and you were taxed more if you bought a vehicle vs riding a bicycle.  You can see the way the first world is headed.”

For those aspiring to venture into portfolio management, here’s advice to a young person wanting to be a Portfolio Manager and a younger Nicholas as he has learnt over the years.

Kudos to the Portfolio Managers who don't just see stocks but foresee the stories they'll tell.

“The best Portfolio Managers in my opinion are good futurists. Portfolio management goes far beyond analysing companies. Had you analysed Kodak in its heyday, you might have given it a buy rating, and the original Kodak company doesn’t exist today.”

“A Portfolio Manager needs to understand where the world is headed, look beyond the numbers, and understand behaviour, culture, and change. Be an all-rounder, and learn from everyone, I still use lessons from Jose Mourinho autobiography when it comes to strategy.”

His key learnings also affirm his golden rule to investing; “only sell out of a company if the fundamentals have changed, not the share price. It is important not to succumb to the temptation of knee-jerk reactions based on short-term news or market noise. Develop a well-researched, long-term investment strategy, and stick to it, filtering out the short-term noise that can distract and mislead you. Dollar-cost averaging is an investment strategy that involves consistently investing a fixed amount of money at regular intervals, regardless of market conditions. This approach reduces the impact of short-term market volatility, as you buy more shares when prices are low and fewer when prices are high.”

Speaking about diversification is always a steadfast tool to reduce risk in a portfolio. “I think the old 60/40 method of equity and bonds are slightly outdated and the use of additional asset classes like private equity, commodities and infrastructure create a more sophisticated portfolio.”

Despite the stress of the job, Nicholas finds comfort in the outdoors. “We’re blessed with many hiking and mountain biking trails in the Eastern Cape / Garden Route. I spend time with family and friends with a good dose of nature.  I also enjoy playing bad golf and pretending to have a back injury when I shoot over 100.

I enjoy Triathlon and have done one 70.3 Ironman in East London with plans to do many more.  My family’s annual tradition is to do the Knysna Forest Half Marathon every year in June.”

From travelling the world to Ironman races in East London, Nicholas’ journey is as diverse as his investment portfolio, despite his bad golf skills.

Nicholas often provides more insights in the quarterly Sasfin Innovation Portfolio update; read more about it here

About the Author

Cobus du Preez
Head: Marketing, Sasfin Wealth

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