Finweek Wealth Forum 14 th March 2011

Agenda Common sense goes a long way in Investing South African Markets: Time to Cash in ? The Bravata Solution

Lessons from Omaha

Rule 1 don’t lose money Rule 2 Don’t forget rule 1 Be greedy when others are fearful, be fearful when others are greedy Invest with a margin of safety Successful investing is a result of being rational Invert, Invert always Invert! The market is there to serve you

Our world today Interest rates have been in decline since 1982

Rates have been decline for 32 years!

Our world today Interest rates have been in decline since 1982 Turnover of stocks has moved from 20% to 215%,280% if ETF’s are included Total long term return from stocks should be about 7-9% US Govt. Interest payments : 10% share of revenues will go to 30% by 2020

Our world today South Africa needs a 7% GDP to create employment 3, 5 million assessed taxpayers in RSA in million have some form of state support One of top four developing countries in the misery index

Our world today In 2008 one in eight Aston Martins, 4% of Maybachs were sold in our country 5 th largest importer of whiskey Local markets have been beneficiaries of foreign inflows

Bonds Net foreign purchases on South African Bonds (Billion Rands)

Our world today In 2008 one in eight Aston Martins, 4% of Maybachs were sold in our country 5 th largest importer of whiskey Local markets have been beneficiaries of foreign inflows Well into the supercycle Our markets are fairly valued

Bravata solution Investor reaction to falling prices doesn’t seem to change. A bad experience leads them to back off and to avoid the entire asset class in which they lost money. They continue to avoid it, no matter how good its value becomes. Dr. Marc Faber

JSE vs. S&P vs. Nasdaq (in instrument currency)

JSE vs. Emerging Markets vs. MSCI World (in instrument currency)

Example: Glaxo vs Aspen

Asset Allocation HoldingNAV 1.Capita Financial Morant Wright Japan Fund9.4% 2.Dell Inc.5.0% 3.Washington Post Company4.6% 4.Johnson & Johnson4.3% 5.Bowler Metcalf Ltd3.1% 6.Coca Cola Company2.9% 7.Berkshire Hathaway2.7% 8.Recm & Calibre Limited Pref Shares2.6% 9.British American Tobacco Plc2.3% 10.Sanofi Aventis SA Ord2.3% Total39.2%

Your questions are welcome.

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