NEWS & OPINION
PROFILE
31 October 2020
VERY BRIEFLY
NICK DENNIS FUND MANAGER, ANCHOR CAPITAL
How did you get involved in financial services – was it something you always wanted to do? I always knew I wanted to be involved in business, but over time I realised that I was more of a thinker than an operator. As I was winding up my three years of auditing articles, I met with a fund manager who told me about asset management. It was as if a lightbulb went off and I remember thinking that it sounded perfect for me. Markets are endlessly fascinating, combining business, economics, politics, psychology and chaos. I am very lucky to do something I love.
What was your first investment – and do you still have it?
In 1998, my dad bought me shares in Dimension Data for my birthday, right in the middle of the tech bubble. I didn’t know much about the business and I’m not sure my dad did either! The shares performed well for a few years and then collapsed SA INVESTORS when the bubble burst. I held on NEED TO GIVE until 2010, when SERIOUS Nippon from CONSIDERATION Japan acquired Dimension Data TO INVESTING for a fraction of OFFSHORE my cost price.
What have been your best – and worst – financial moments?
Best financial moment: Getting my first paycheque and thinking “I’m rich!” Worst financial moment: Wasting money, like reversing my car into a pole, and thinking “I’m an idiot!” I tend to be sanguine when it comes to the vicissitudes of the markets. I’m not a robot and have emotions like everyone else, but with experience you learn that one phrase holds true throughout: ‘This too shall pass.’ When it comes to individual shares, you have
to accept that you’re going to be wrong. A lot. Nevertheless, with each loser there are lessons that take you closer to finding the next winner. Most importantly, the beauty of investing is that one huge winner can offset a number of losers.
What do you tell investors who are worried about their investments due to SA’s current economic environment and COVID-19?
I run a global equity fund, so I’m biased, but SA investors need to give serious consideration to investing offshore. Notwithstanding the challenging outlook for corporate SA, the fastest growing and most innovative companies are found beyond our borders. One of the standout features of the past few years has been the disparity in performance between the winners (predominantly in tech) and the losers (in ‘old’ industries like banks, industrials, retail etc). COVID-19 has accelerated this trend, as businesses and consumers have adopted technology at an unprecedented rate. The winners in this new world are found offshore. Fish where the fish are!
What’s the best book on investing that you’ve ever read – and why would you recommend it to others?
One up on Wall Street and Beating the Street by Peter Lynch stimulated my interest in investing early on. Lynch is one of the all-time investing greats and his optimism is contagious. I still come back to these books every year or two because the wisdom is timeless. Trading in the Zone by Mark Douglas deals with psychology and markets and goes deeper than the simplistic platitudes you frequently hear. The book had a significant impact on me; with that prompt, I think I’ll read it again!
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