Bitcoin, Nesquik and investing in the JSE

“What’s your take on Bitcoin?”

Without a doubt, the most asked question in my inbox. To date, I haven’t responded to any of those messages. I’m not someone to give advice on investments – I think it’s an irresponsible thing to do. For many reasons but mostly because you don’t have all the facts – about the investor or the investment.

Having said that, give me 5 minutes of your time, read this article to the very end and I might just help you from losing all your savings (or money you never had) and help you to create real (guaranteed) wealth. The answer is as boring as hell, but it will work.

So, Bitcoin? Many people created a lot of wealth from it. No argument. But many people also created a lot of wealth from shares in Naspers, Capitec, Discovery, even from Steinhoff and African Bank. Foreign equities: Apple, Microsoft, Amazon. Many people created wealth from Mandela coins and Sharemax. Equally, many people also lost a lot of money in these exact SAME shares/products.

The funny thing about these investments, and investing in general, is that when people make money, they will tell everyone about it. But when they lose, no one ever hears about it. This creates a warped perception in the market and we all see an endless pot of gold.

Is Bitcoin (or crypto currency in general) the future? Personally, I think it is. Is it a great investment? Personally, I think it is, PROVIDED that you don’t trade in it or put all your eggs in one basket – please read to the end.

Is Bitcoin an endless pot of gold? No. And we need to see the growth of Bitcoin in perspective. Honestly, I think everyone started exploring this new “let’s get rich quick investment” when it grew from $1k to $10k in a short period of time. Everyone wanted to invest. It went close to $20k and then came crushing down, then picked up, then down, then up, then down…

From $10k (where I believe everyone got excited) to an average of $14k is a 40% growth. That’s amazing if you look at the ridiculous rate of interest your bank will pay you on a savings account. But it is nothing spectacular when compared to certain stocks. Naspers grew more than 60% in the last year.

My first point? Bitcoin had enormous growth from $1 to where it is now, but from $10k it was still amazing but not that crazy. The same argument can be made for great stocks, if you invested when it listed and compare the price now, the jump is insane.

But we tend to get excited about these things. We live in a world where we want instant gratification. We want to lose weight tomorrow, be rich next week. And this is no new phenomenon – remember the trend around Sharemax? Everyone wanted it, people made a ton of money, today? Bust. Mandela Coins? Same thing. Value today? R5.

I’m not saying Bitcoin or crypto currencies will crash, I’m just saying this “fad” happened before and will happen again.

So what do you do? If you want to put all your money into Bitcoin – go ahead. If you want to put your money into Steinhoff – do it. Into Naspers – make that EFT. Gold – same thing. Nesquik – probability that the price will double in the next 5 years is great – sound investment. The thing about all these investments is that it will either be a win or a lose. You can also drive to Monte Casino and get the same opportunity – red or black – all or nothing.

I think it’s irresponsible and your greed might (read: will) wipe out everything you have. Some get lucky, they make a ton of cash, exit and brag to all their friends. Most, lose all their hard-earned money, never tell anyone and contemplate committing suicide.

The answer? I told you boring as hell – but have a well balanced portfolio that will grow over the long term. Money is not a sprint, it’s always been a marathon and will always be one. You can take the bet on one product and have a small chance of winning or you can go for the long game and know that one day, you will have enough for a proper around the world trip with Emirates and retirement.

I’m surrounded by wealthy people all day, every day – billionaires and some of the richest people in Africa. I always listen, learn and take their advice. Their opinions are almost always in sync. And with investments: take the long run, have a well spread portfolio.

And what does this mean for the guy on the street? Just don’t put your eggs in one basket. If you want crypto currency, great – make it 5% of your portfolio. If you want to invest in shares – pick 15 across different industries/countries/etc and split your risk.

You won’t be rich tomorrow, but you’ll have more in 5 years than you have now and do it right, and you’ll be wealthy in the long run.

How do you do it? Index Tracking Funds, through a broker, a DIY approach? I don’t give investment advice but I’ll introduce you to the guy who changed my mind about investing and because of him, I created more wealth in the last 3 years than I did in the last 10 trying to predict markets, shares and products.

His name is Charles Hattingh. He is one of the smartest ooms I know and he dedicated the rest of his life to teach people how to invest in the JSE and outperform most (read: all) stock brokers and other asset classes. If you are serious about this, visit his website at www.mafiabuzz.co.za and book a course – it is ridiculously cheap for the value you’ll get. Thereafter, you can decide what you want to do with your cash: Index Tracking Funds, through a broker or a DIY approach.

This is in no way an article to endorse his courses, I don’t get anything from it. My aim is to add value for other people and this added massive value for me. It will be unfair not to share this gem.

I won’t be putting all my cash into Bitcoin. I told you – boring as hell. And I might not have a 1000% return on my cash next week. That’s OK. In the long run, I’ll create more wealth than in any other way and I won’t need to refresh my screen every 5 minutes or commit suicide.

Not the answer most are looking for – but that’s also why most won’t have a cent when it comes to retirement. This is my opinion and lessons from my journey. You can disagree or thank me one day. Happy investing!

Ps. A last word on trading…

Trading (not investing) with Bitcoin is another funny one for me. Again, we make as if trading Bitcoin is such a new thing. No different to trading in shares. But suddenly all the techies have a new hobby and they are learning what share traders have known for years. Up to now, it was a bull market and they’ve mostly made a lot of money. The lessons will be painful as this change around (as it recently did). I’ve also made millions in trading shares but I’ve also lost millions – my biggest hit: R2m in a day. My conclusion: if you want to trade, you need to become a full-time trader with proper strategies (if this is you, get educated and devote your time to this – check out Matt Brown Media’s stuff). You can’t be employed or run a business while constantly checking your trades as they tumble down, you’ll pay tax at 45% on earnings and in most cases you’ll simply lose. It’s easy in a bull market, but these “traders” will begin to understand what it’s all about when it reverses. Share traders know this, techies and these instant public traders will know this soon.

14 Comments

  • Jacques Nel
    January 20, 2018 at 1:28 pm — Reply

    Hi Marnus, thank you for this very informative article! I have recently attended a Standard Bank investment seminar and I will open up a Online Shares Trading account with them soon. I first want to get more educated about how to identify good shares to invest it. I am looking to invest for the long run, I do want to take a small proportion of my investment and put it into more high risk shares that could yield higher returns and dividend. Kind regards, Jacques

    • Marnus Broodryk (Author)
      January 20, 2018 at 1:50 pm — Reply

      Awesome. Check out the guys at http://www.capilis.co.za/ – they offer the same online platforms but with cheaper rates.

  • Werner du Preez
    January 20, 2018 at 1:38 pm — Reply

    Well put Marnus. The question is not “should you buy Bitcoin?”, but rather “does Bitcoin fit into my investment plan?” That is a much more important question and also easier to answer.

  • January 20, 2018 at 5:19 pm — Reply

    Probably the best article I have read on someone’s take on the whole BTC thing. My feelings and thoughts are welk in line with yours Marnus! Thanj you for this!

  • Rizwana Suliman
    January 20, 2018 at 8:47 pm — Reply

    Wow… what a coincidence, just last night I had this very same discussion with a friend and told her the very same thing you did Did not read your article before that lol…. good old Charles, love him! Want to go for a refresher course soon. Great article, write more…

  • January 21, 2018 at 6:34 am — Reply

    Great Article. Thank You.

  • Daniel Donnelly
    January 21, 2018 at 8:02 am — Reply

    “Nothing sedates rationality like large doses of effortless money” …… WB

  • Nasthir Amichand
    January 21, 2018 at 10:55 pm — Reply

    Hi, really great article and thats basically the truth there hey. I’m new to this whole investments and trading. I also don’t have that much capital to start with and wanted advice on where I can learn or even get mentored by someone and I’ll be happy to share my profits as gaining an income isn’t a race, the knowledge to me is way more valuable. I’d like some advice on such if you have the time. Thank you

  • January 22, 2018 at 8:54 pm — Reply

    Dankie Oom 🙂 Great read.

  • January 23, 2018 at 7:05 am — Reply

    Fantastic as always

  • Corrie du Bruyn
    January 23, 2018 at 9:00 am — Reply

    Thank you Marnus for great advise. To be successful in trading, I agree with you. If it is not a passion, you fail miserably. If you are also not prepared to watch a screen every moment of the day, it will not work for you. Rather be diverse and invest intelligently rather than trading foolishly.

  • Fransie
    January 23, 2018 at 9:28 am — Reply

    Van die eerste dag wat ek van Marnus Broodryk gehoor het….nog nooit spyt dat ek hom volg en sy boeke en artikels lees en dit probeer nastreef nie. Dankie Marnus

  • January 23, 2018 at 2:47 pm — Reply

    Tjo tjo tjo! Thank you for the article Marnus! This year is the very first time (financially) that i am able to even consider investing and it does make sense as you have explained it.
    I am soaking up any and all advice so this is much appreciated!

  • Gary
    January 29, 2018 at 2:16 pm — Reply

    Good day Marnus,
    What Altcoin wallet would you recommend in South Africa?
    There are a few to choose from, but not sure which is the safest option.
    Thanks for the article.

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