Who is Steven Cohen?
Steven Cohen and his brother-in-law Ivan Epstein began their leading software company, Softline Pastel, in the 1980s with little more than the basic idea that companies had to computerise, but that there was a dearth of accounting packages. Softline Pastel developed the first such locally developed package. Steven’s motivation was to do something on his own.
A key moment in the business’s history was when it listed as Softline Limited in 1997, though it later delisted and was bought out by Sage Group Plc.
Steven’s lessons learnt
I have made my money out of my business and continue to do so. Once capital has been earned I find there are plenty of jackals lurking out there looking for an easy feed. My advice is, if you use a financial adviser do a due diligence and make sure he or she is somebody you can trust.
Can you describe your portfolio of equity investments?
My investment experience has been a disaster. However, there are lessons to be learnt from mistakes. I am invested in a portfolio of unit trusts rather than direct shares, but few of these investments have beaten their index. This means that fund managers are simply eroders of value and if I could do it all again I would simply invest in ETFs (exchange traded funds).
I don’t like the fact that they take fees on the entire portfolio irrespective of whether it is making a profit or loss as there is no downside in it for them. Every fund manager is extremely proud when he beats the index, but I question whether they do so consistently.
What do you look for as an investor?
When we in 1997 I made some decent money. My focus and attention has always been on my business, and left to my own devices I would have left the entire portfolio in a call account. My financial adviser offered the single best suggestion I have had as an investor, simply to place half my portfolio in the stock market.
It is the market that has produced results, not the fund managers. Of the 50% that I invested on the stock market, albeit indirectly through unit trusts, half is in rand hedge stocks and the performance of these has been little short of disastrous.
The problem with the investment industry is that they operate on the basis of consensus — if they are all offering the same advice, that’s regarded as ‘best advice’ irrespective of actual returns.
The other half of my portfolio has been 30% in cash and 20% in property. I hold two physical properties on golf estates and these have similarly been disastrous. They’re illiquid, hard to dispose of and with a lot of expenses associated. You hear of many people who claim to have doubled their money with property, but does their return include all the expenses?
- International Conservative Fund of Funds
- Momentum Endowment
- Standard Bank
- Stanlib International Property
- Stanlib Offshore South-East Asia Fund
- Centaur Unit Trust
- Investec Equity Fund
- Investec Growth Fund
- Investec Emerging
- Investec Worldwide