Who is Donald Kau?
Donald Kau started investing at an early age and his first savings experience was through participation in a stokvel. Kau grew up in a poor area where people had little ability to save for a rainy day. He saw many families in his community lose homes as a result of not having savings and these early experiences strongly influenced his investment philosophy. He describes himself as a low risk investor who takes a long-term view on investments he likes to “buy and forget about.” “I am all for keeping a penny for a rainy day and letting investments work for you,” he says.
Personal investment philosophy
“Risk is a serious business and I really believe that all types of investments should be taken seriously. My investment philosophy is based on an understanding of what I can afford to risk, and what I need to protect. It’s very similar to insurance really. If I buy assets or valuables, I always insure those that I just can’t afford to lose,” says Kau.
Investment strategies
DONALD Kau looks for proven performers with good management at the helm who are also invested in the companies they run, and are in it for the long haul. “I believe in investing in entities I know about and like. Since I am an avid television and print consumer, I have a preference for investing in media companies.
I also like companies with a single business focus. I am not a person who looks at stock performance everyday or even every week.”
Don’s Investment lessons
1. What turns you off an investment?
I am not one for making a quick buck so I won’t be looking at quick short-term investments too easily. I am also wary of companies that try to be everything in a market as they often compromise on their main offering, and are often forced to use their money to fund new directions and strategies at the expense of what brought them success in the first place. As soon as they do that, I am ready to move.
2. Where are you currently investing and why?
I invest in unit trusts mostly to give me a good spread as well as BEE shares as they come onto the markets. I do believe that BEE schemes are a good way to get started with investing. For me, these shares are more of a means to leave behind a legacy for my family and not so much to reap the rewards for myself.
3. What do you believe makes for a good and bad investment decision?
I have a good financial advisor and I make sure to keep myself educated on financial issues so that I can discuss my financial matters at his level. I did well with property, which is a good medium to long-term investment. I got in early on the cycle and stuck through it when the sentiment was to flip for short-term gain.
4. Where do you believe the best investment opportunities currently lie?
I do see opportunity in property again right now. Mining and minerals also present some positive and attractive investment options. Minerals are in high demand and will remain so as developing economies create and fuel new demand.