When the final Whistle blows: Coping when the limelight fades By VDS Brink Illustrated by Thilo Otterpohl Copyright © VDS Brink 2012 Wisteria Avenue, Faerie Glen, South Africa 1st Edition, 2011 – 12 – 01 e-ISBN 9-78130-15448-75 Published by VDS Brink at Smashwords www.corvus.co.za Table of Contents Introduction Appreciation Confessions from the 4th team The gentlemen’s game Principles of wealth creation Blinders in our outlook A full life The author References INTRODUCTION We live in turbulent times with a world slowly emerging from the worst economic decline in 80 years It will take years to recover the damage It is also a time when a new generation is emerging with a new outlook on life The shadows of 1994 and the impact of the internet changed all and that current ways of doing things simply will not work in the future This article discusses it and provides guidelines for coping and using it to create wealth in an uncertain and difficult future As our personalities differ, our appetite for risk accordingly, it is critical to be surrounded by people different from you to maintain perspective This article was born from discussing many aspects of life with great people on investment and particularly the life of sports women and men To soar in life is to know that lots of data and information mean very little Greatness and victory is if we can move to knowledge, then insight and ultimately the wisdom To it is to drown the mind with facts, discuss it with diverse people, test the water, burn some scars, emerge with humility and only then follow your head On every aspect of life, this takes time, lots of it Back to table of contents TO BE SURROUNDED BY THE BEST Francois du Plessis and Tom de Lange of Vega Capital, Laurette Pretorius of Sasfin and Hugo Snyman, Christo Luus, Deon Olckers, Louwrence Erasmus, Thilo Otterpohl, Ian Lane, Dewald Scholtz of Third Circle Asset Management play a major role in my understanding of wealth creation In their shadows I moved from a salary earning ignorant nobody to a share trader, understanding my limitations, made small fortunes and lost some of it and came out wiser, humbler and understanding my role so much better It taught me that there are wiser people than me; yet never lose strategic control, to manage my fear and greed and see it all in a wider context The world of sport for me was remote and distant Sport insults and humiliates 85 % of the population Sport is not exercise, it is hype and glitz Whether anybody buys a seat at Loftus, it makes no difference, it is less than 5% of their income, the rest is pure media hype With this cynical view, my roads crossed with wise people on that side of the fence, and a new world opened up Christo Spies (former Springbok athlete, batsman for Kovsies plus many others and today the mental coach for both the Cheetahs and the Eagles), a friend and a daily pillar of strength for the past years Elizabeth Reynders (double Olympic swimmer), a friend for many years and collaborator on the great post 2010 scenario project when she passionately shared her views on the Sydney and Atlanta before and after the Games Steve Rautenbach (former Olympic coach at Barcelona) who was a co-soldier in the trenches at the SAPS reserve force and told priceless stories while doing midnight hours on the beat Greyling Viljoen (clinical psychologist and canoe champion of global rivers, Springbok for almost a decade and sport administrator), a comrade in arms for many years at Unisa’s MBA as co-lecturer on creativity gave me insight into the world of high performance, and the limelight that shines and fades Wonderfull discussions recently at SA Rugby at Newlands with Steven Roos (ex school mate, operations manager and veteran of 36 years at that holy ground) and Giepie Nel (Blue Bull centre of yesteryear) who escaped the final onslaught of fame and professionally qualified as a dentist, gave priceless ideas A great lecture recently by Dr Sherylle Calder of the Sport Science Institute on eye-hand coordination brought great new insight The concept of the fading limelight enlightened by my brother, Danie who as a doctor witnesses the devastating impact on our lives Johann Coetzee, the industrial psychologist, and his concept of “when the corporate applause dies” as seen in real life in my year journey with Allan Heyl who kicked off a new life with all lime lights glaring and a Hollywood movie (“Stander”) to back him up We know that 60% of all chartered accountants in the US of A die within two years after retirement and the rest of us between the ages of 63-65, a sharp peak in death rate that drops afterwards Leaving that great mining company after 25 years brought me to my knees and months of emotional living hell (“Why doesn’t anybody phone me”?) An identity destructed, am I still good and competent, worthy of respect? The corporate applause is addictive For the young sportsperson, it dies early and can and will lead to emotional distress and subsequent bad decisions Back to table of contents CONFESSIONS FROM THE 4th TEAM 80% of all super performing sportsmen & women are born January – March Fact (Gladwell, 2009) Being no exception as an October baby, I never made beyond the 4th team Ironically today after decades, 90% of my compatriots who sneered at me then, cannot even one flight of stairs I spend an hour in Virgin Active daily, can Table Mountain in hour 15 minutes and a comfortable sub hour half marathon For them, the impact of Gunston, Klipdrift & Coke, Rump and Chips had the last revenge Even more so, my dear wife, a November babe, never even made the netball team, yet today is a multiple gold medallist for the 10 kms, in the top 10% in this year’s Two Oceans and last year a national 4th place for Virgin Active’s triathlon Her compatriots faded into mid aged overweight ladies so sad Then, when working at the age of 22 under the baton of the great Dr Craven as the resident scientist on the John van Reenen world record project, brought insight into the world of sport Eccentric as he was, “Doc” Craven also drove a Jaguar, in his case a British racing green XJ with a ridgeback named Bliksem who commandeered the front seat He creatively chose a champion swimmer for the 1960 test in Dublin Attie Baard barely ever played rugby in his life! Attie, a retired doctor and ex superintendent of the Stellenbosch hospital shared his story with me to my delight He also relegated Andrew van der Watt the Springbok wing at the time, to Maties’s 2nd team to make room for the aging Jannie Engelbrecht Due to his physical appearance, we fondly referred to him as “The Ape-Man” I cheated and bribed to get the job to cover my expenses for my sins of not passing my second year maths All funded by the great Naspers and money was no object As most post grad students in sport science came from a BA background, I soon become the resident hero to coach them in the complexities of stats, maths and mechanics An endless stream visited me in my room to complete their assignments, all paid for by Selected Tassenberg (That is the one with the cork.) One of them the Springbok fullback at the time, Dawie Snyman Respect shown by my mates in the res’s corridors grew by the day In the same corridors lurked people like Michiel le Roux (Capitec’s founding chairman) and Koos Bekker (today of the same Naspers) Life was beautiful! Not stupid yet, I coded lengthy FORTRAN programs solving exponential equations built upon the behaviour of a discus in a wind tunnel The mysteries and myths of swinging cricket balls were part of the study This was then discussed with Naspers’s editors They, also BA types, did not understood a word what we said, yet as media moguls sniffed money in the air, nodded their heads in enthusiastic agreement and kept on footing the bill I even bought a car! Ivor Potgieter was the coach who wisely took the new insight and adapted John’s style slightly In our team was the bow-tie wearing colourfull Dr Jan van Heerden who analyzed poor John’s skeleton by means of numerous X-ray photos Dr Jan was then and remains today a national hero with his groundbreaking book, “What every boy should know.” As Jan van Elfen his books became part of our furniture The rest is history: we struck gold on 14th of March ’75 when John broke the world record with a huge 50 cm It was a great moment in the life of a youngster to meet that humble giant These days, at the age of 63, he is world renowned artist exhibiting in galleries as far as New York Yet I love the game and all around it and in my endeavours under prompting of my three teenage daughters, was always on the hunt for autographs Gymmed in Brisbane next to the great Shane Warne Hotelled in London with Brian Lara and Co and the greatest was on the way back from New York back in ’92 to fly to Bridgetown, Barbados to pick up Kepler and team My seat mate next to me: Mike Procter! At the point over mid Atlantic, a newbie sitting in economy in the back came to speak to Mike and introduced himself to as Hansie, sadly not with us anymore Ali Bacher resided up front in 1st Class Only one survival of that flight these days, a member of the under 19 team; a guy named Herschelle As a fanatic, I stood on the pitches of Lords, the Oval, Sydney, Brisbane and visited the Brabham museum in Bowral, NSW, twice as I had a project there Down Under Stood in awe on the Melbourne Ground with the highest light poles in the world, fitting +100 000 comfortably and built solely for cricket and the funniest game invented by mankind, Aussie Rules While talking about cricket grounds; in these days of irritating name changes, we also need to look into the mirror Many years ago, there was a town outside Pretoria, Lyttleton In a wave of patriotism they renamed it more politically correct as Verwoerdburg In the mean time, Dr Willie Basson of the Northern Transvaal cricket union made a deal with the city council to build a cricket ground They dreamt of all the hundreds to be scored and named it Centurion Park The Jewish capitalists in Sandton also had to make a move to be politically correct and renamed the shopping complex next door Centurion City The city council, after many fights, flag waving and debate renamed the whole city, making Centurion it the only place in the world named after a cricket ground! When the late Dr Albert Herzog turned his back on his cronies, the same fate befell the Hertzog Tower in Jozi to be renamed boringly as the Brixton Tower To divert a bit, with great guys domineering our history as General Hendrik Potgieter and Colonel John Graham who both easily wiped out whole towns before breakfast They are overshadowed by Lord Alfred Milner who through his underling, Lord Kitchener cold bloodily killed 27000 children, mostly babies and toddlers (Gilliomee, 2006) Yet, their legacy is Potchefstroom and Grahamstown cherished in Milnerton, Not the end of the saga yet as the Titan’s union then succumbed to the onslaught of the Mighty Rand and renamed their grounds: Super Sport Park!! Imagine a future billboard: “Welcome to Super Sport City” Will we never learn? However the most wonderfull was back in ’94 when we opened our office in Brisbane and a guy walked in He was the owner of a civil engineering consultancy across the corridor, Maclean & Chapman As wicketkeeper of Oz and administrator, he was honoured by Queen Elizabeth II for his dedicated service in maintaining the tiny bit what is left of the Empire Sadly he did not attend the sword hitting ceremony as he could not afford the air ticket His wife almost divorced him! John Maclean MBE himself John, a humble person, who helped us every bit to find our feet in an odd country speaking a foreign language by abbreviating everything while drinking Swan beer He kept up correspondence with my 15 year old daughter sharing great cricket stories and gave her something to brag about on the playground Listening to Sherylle’s lecture, it struck me that second only to playing the violin; the utmost hand eye coordination of mankind is found amongst cricketers To read a ball coming at you swerving in the air at 140 km/h is not for sissies They are indeed special people and lots are to be learnt from them and what they The mind of the cricketer surely is surely different from the rugby player In rugby lots of them at 35 are penniless, desperate, a broken body and an empty mind Working on wealth creation with a great cricketer we need to take all this in account as it shaped his mind for many years and this unique characteristic just must be used Back to table of contents PRINCIPLES OF WEALTH CREATION This is the field for the experts, yet few ideas might help: Every Rand/Pound/Dollar you spend must be earned by somebody (= the root of the subprime debacle?); wait patiently and work hard all your life; beware of scams and promises (if it is too good to be true, it often is!); know how much you earn, spend, save, own and owe, know how much is needed to retire (Luus, 2010, pers comm.) From Danko’s great book “The Millionaire, next Door” (adapted after many discussions with De Lange 20052007): • Live far under current means: That is within 70% of availability as calculated from the Wealth Index The WI will be discussed later • Spend lots of time, money and energy on ways to built wealth: Count your money often, read, think future, talk to advisors, and take final responsibility • Financial dependence >>> social standing Live modest and show it The late Dr Rupert drove an ancient Merc and Warren Buffet a 10 year old Ford Falcon • Children need to be financially independent Give everything for education and ongoing education • Create a legacy in a trust, pass on to the future grandchildren • Be clever to see new opportunities Use strategic insight, vast networks, feel for the future to aid to the work of your financial advisors • Do the right things to create extra income Do work that creates networks and pays handsomely Strive to cover monthly expenditure for next years from external income • Guard against loss • Make the best of property, yet understand that there is a price to be paid (rather buy property shares ?) • Stick to investments of what we understand If it are to be CFDs, SSFs, day trading, Hedge Funds, Persian carpets, gold coins, golf estates, offshore gilts and bonds, Emperor Casino or the Lotto, great, but know before we leap • Handle risk with a balance between caution and aggression: Always know how much I can afford to lose and keep the foundation intact • Above all surround yourself with great people of a diverse background Know yourself Get your Myers Briggs type or whatever indicator Do Third Circle’s psychological profiling (a steal at only R199) Talk to those same BA types mentioned above They have a great role to fulfill In my case as an introverted, intuitive, thinking perceiver, I am certain to mess it up if I it myself My miserable trading record proves it, especially when my pet company Uranium One dropped by almost 80% overnight! This all when my dear fund manager seems to sit boringly on her hands, yet steered it all wisely to survive the market collapse Understand your weaknesses, and use your strengths in combination with wise people diverse from yourself To make a sure mess, is to sit in the “we-warmourselves” crowd and follow the herd Like the Norwegian lemmings and Hamelin’s mice, you and your cronies will run over the cliff Back to table of contents BLINDERS IN OUR OUTLOOK Each of us look at life with tinted glasses This is our biggest enemy in wealth creation Some of them are (from Wikipedia): • Remembering chosen options as having been better than rejected options • Bandwagon effect; if all thinks it’s great, then it must be • Remembering one's past performance as more different than it actually was • Recalling the past in a self-serving manner, e.g remembering one's exam grades as being better than they were, or remembering a caught fish as being bigger than it really was • Keep things as it is; not rock the boat • Difficult to let go • An item that sticks out is more likely to be remembered than other items • The emotion associated with unpleasant memories fades more quickly than the emotion associated with positive events • The inclination to see past events as being predictable; also called the "I-knew-it-all-along" and the “I told you so” effect In our great country the “good old days” is a lively topic when we braai We conveniently forget the cheating, bribing, paving the way for our cronies The only real difference is that these days we at least know about it The herd will move through phases in the investment world: Rejection – distrust – safe play - trust – exuberance – greed – whatever – negative – it’s not true – worry – fear – panic – despair – surrender – back to rejection.(De Klerk, 2009) Since September 2008 we almost witnessed the whole cycle and now somewhere between safe play and trust Perhaps the trick is to be steps ahead of the herd? Back to table of contents A FULL LIFE A full life is so much more than being wealthy (Demathini, 2005) It is to balance family, spirituality, doing sensible work, create wealth, have friends, have a healthy body If passing into the 50s, creating a legacy will be the 7th pillar To sum up: Mind, Body, Soul, Friendship, Wealth, Hard Work and surrounded by Loved ones Tinker with any of these pillars and your castle of happiness will tumble down To be wealthy is not to be rich It is to survive maintaining our current lifestyle (Danko 2004) Demathini (2005) advises that we should have 2x months of salary saved in the bank, then build up to months in bonds, then a mutual fund, then in blue chips, large cap, small cap, derivates and then only hedge funds It is to follow a route of small steps, covering risk and learn along the way Maglolio (2205) advises a full year of research and understanding before any trades The PSG Make a Million competition served me well as I focused on a slice of the market (e.g Alt x) and worked with real money A great learning exercise The most important is to find an asset manager that walked the road A person that can listen and get under your skin An open ear, dedicated with perfect administration If not drawing a fixed salary, yet accumulated a bundle, long term planning can sensible done with Danko’s Wealth index formula adapted by De Lange (2006) It gives a monthly extraction rate Stick to this, money not spend can be blown and enjoyed All new income is never allocated for expenditure, but form part of the pool By choosing a conservative WI, the pool must grow over time giving the freedom never to succumb to daily temptations, yet building a legacy Back to table of contents About the Author After studying Science and technology, Van der Spuy (61) worked in mining IT, a decade on offshore mining development, managed Industrial Engineers, Knowledge, Innovation and several mining restructuring projects He lectured Innovation and Strategy for Unisa’s MBA and now an external examiner for Stellenbosch’s Industrial Engineering and strategy lecturer at Milpark Business School As a strategy facilitator worked with many companies including Discovery, Amplats, Sasol and recently the faculties and campuses of North West University The heart warming highlights were guiding a day session with the Truth and Reconciliation Commission and to be the MC for the governor general of Canada on her South African tour He owns a startup stake in Asset Management, Media, Venture Capital and Health companies, his startup company is the winner of the Enablis business plan competition of 2009 and Dept of Science and Technology’s best new company award for systems management in 2010 Spending most his life in coaching and guiding students and senior managers, he excels when co-sharing views and ideas give birth to a diamond He is the proud grandfather of handful diamonds and goes though live with a Canon capturing the oddities of life believing that in any heap of dung there is always a lily about to bloom Back to table of contents REFERENCES AND FURTHER READING Aburdene, P (2007) Megatrends 2010, Hampton Roads Branson, R (2006) Screw it let’s it, Virgin Books De Bono, E (1999) New thinking for the new Millenium, Penguin De , E (1985) Tactics: The art and science of Success, Fontana Demartini, J (2004) How to make a hell of a profit and still go to Heaven Hay House Gladwell, M (2000) The Tipping Point, Abacus Gladwell, M (2009) Outliers, Abacus Hamel, G and Prahalad, CK (1994) Competing for the Future, Harvard Business School Friedman, T.L (2006) The World is Flat, Penguin McLeod, F and Thompson, R (2002) Non-stop creativity and Innovation, McGraw Hill Naisbitt, J (2006) Mindset, Collins Ollinger, H (2004) Master’s thesis University of Pretoria, unpublished Peters, T (2003) Re-imagine!, DK Peters, T (2005) Trends, DK Schwartz, P (2005) The art of the Long View, Wiley Sunter C, (2001) What it takes to be World Class, Human & Rousseau Sunter C, (2000) Games foxes Play, Human & Rousseau Sunter C, (2005) Socrates and the Fox, Human & Rousseau Back to table of contents ... ladies so sad Then, when working at the age of 22 under the baton of the great Dr Craven as the resident scientist on the John van Reenen world record project, brought insight into the world of... Tassenberg (That is the one with the cork.) One of them the Springbok fullback at the time, Dawie Snyman Respect shown by my mates in the res’s corridors grew by the day In the same corridors... Yet, their legacy is Potchefstroom and Grahamstown cherished in Milnerton, Not the end of the saga yet as the Titan’s union then succumbed to the onslaught of the Mighty Rand and renamed their