It’s exactly a year today that Biznews first appeared. My first call this morning was to my friend Andrew Trench, editor of The Witness. It was only right. Andrew spent hours over weekends guiding me through the complexities of WordPress, replicating the Grubstreet look and feel built in his spare time for his talented wife, SA’s top media sector writer, Gill Moodie. They are two very special people.
Just as appropriate on Biznews’s first birthday is the publication of this contribution by Timothy Wood. A former head boy of Mooi River’s Treverton College, Tim was my first real business partner – the technical half of the team that started Moneyweb. As soon as my start-up generated its first R25 000, Tim became employee number one, joining me in the tiny office with pink walls above the garage in Kilkenny Road.
Together we built business into a size that allowed it to list on the JSE, in July 1999. During those early years Tim uncovered more than one issue that could have turned the little business into roadkill. One of his happiest days – winning a US Green Card – was one of my saddest. He duly relocated to America, played a major role from over there in getting our Mineweb.com off the ground, and then went on to a glittering career elsewhere. As one does, I sometime muse about what might have happened if my wingman, my important “Yes, but….” partner had not won that damn lottery.
Tim has lost none of his love for research. Of crunching numbers and looking under stones others leave unturned to find answers the world either passively ignores or just doesn’t want to hear. He shared the graph below which tracks the inflation-adjusted price Rand gold price. Its conclusions are obvious. Even though the bullion price might have done little in US Dollar terms, pure Rand gold plays (NewGold units or Krugerrands) have been a wonderful hedge against the local currency’s depreciation.
As he writes: “The graph obviously speaks to the rand’s weakness against the dollar in key periods (e.g. 2002), but it’s also instructive for the inflation differentials (e.g. ’98 spike, ’02 spike; 1980s acceleration; 2014 accelerating).  It is also interesting to observe the decade of relative stability from mid-1992 to mid 2001 when rates converged somewhat. Would likely be difficult to find a better hedge to maintain your purchasing power in SA than to convert rand to gold, especially as a retirement vehicle.”
What a pity the country’s gold mining companies, bedevilled by falling productivity and frequent work stoppages, haven’t been able to take advantage.
