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Seeing the light in dark times

There is no doubt that people in South Africa are struggling, as are people across the globe. These are difficult times but 10X Investments CEO Tobie van Heerden says he remains optimistic.

“For one thing,” he says, “I remind myself of just how resilient South Africans are.”
Van Heerden adds that our history shows that, even when things are at their worst, when we are united things will start to improve “whether that be in power supply, sport or investment management”.

In the case of “real darkness”, he says, referring to the worsening power blackouts South Africa has been experiencing this year (euphemistically called loadshedding) “now that it has got really dark” (ie loadshedding Level 6) we will “start to see real action” on how we can move forward.

He explains: “When we were on Level 2, people were less worried about it, for many it was a nuisance or just a nice break during the day. People could work around the blackouts and were not terribly vocal. Now that we have experienced Stage 6 loadshedding, it is really serious, and we will start to see action.”

Van Heerden believes South Africans will soon see action on a national level “which will force the whole system to move forward”. 

The stock markets, in South Africa and globally, have also hit a dark patch, but again Van Heerden is not focused on the negative. At times like this, he says, investors will start to look for excellent service and products at low fees, which rewards value and excellence, “which is exactly where 10X plays”.

“The most informed investors will sit up and say, where is the opportunity … but that is another story altogether.”

Van Heerden adds that the great returns the markets had seen over the past 2 years were unsustainable. And exuberant markets have their downside too, he says: “When everybody is making money there is a relaxed attitude about performance and fees.”

“A 2% or 3% fee on a 15% return is much less relevant than a 2-3% fee on a 5% return. Now that there is downward pressure on markets people will start feeling the fees and demanding better value.”

And this, he says, is where the light will start to shine on companies like 10X because high-performing, low-fee products will really allow investors “to take advantage of investment opportunities that will arise as a consequence of the current market conditions”.

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