In an exclusive BizNews interview, 36One Asset Management co-founder Cy Jacobs unpacks his investment strategies amidst global uncertainty. From Tesla’s cult-like status to Bitcoin’s volatile allure, and the opportunities still hidden in South Africa’s market, Jacobs provides a masterclass in balancing risk and opportunity.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here.
Watch here
Listen here
BizNews Reporter
In a conversation with BizNews founder Alec Hogg, Cy Jacobs, co-founder and CEO of 36One Asset Management, laid bare the complexities and opportunities in today’s investment landscape. Known for his hands-on approach and sharp insights, Jacobs touched on global market dynamics, technology’s impact, and South Africa’s economic prospects. ___STEADY_PAYWALL___
Markets Under Trump’s Shadow
The election of Donald Trump brought seismic changes to global markets. Jacobs noted that Trump’s pro-market policies, particularly in sectors like electric vehicles and defence, continue to shape market dynamics. While Tesla, which Jacobs described as a “cult stock,” benefited from this shift, he remains sceptical of its valuation, calling it “far removed from fundamentals.”
Jacobs argued that similar sentiment-driven momentum fuels stocks like Palantir and MicroStrategy. These companies thrive on political and social narratives but pose significant risks due to stretched valuations. “Fundamentally, these are shorts, but timing is everything,” he said, emphasizing the need for caution when engaging with overvalued assets.
The Bitcoin Phenomenon
Bitcoin also came under scrutiny. While Jacobs acknowledged its revolutionary potential as a borderless digital currency, he underscored its speculative nature. “It’s not a business; it doesn’t yield anything,” he noted, advising investors to allocate only a small portion of their portfolios to cryptocurrencies. Despite its volatility, Bitcoin’s increasing adoption by major institutions like BlackRock suggests it may carve a permanent niche in global finance.
South Africa’s Resilience
Despite global turbulence, Jacobs remains cautiously optimistic about South Africa. He highlighted improving GDP prospects, better Eskom performance, and significant infrastructure investments as reasons for optimism. “We’re seeing a shift, albeit slow, towards more consistent 2% growth,” he observed.
Jacobs also praised South Africa’s banking sector, noting the resilience of institutions like Absa, which he described as “the forgotten stepchild of commercial banks.” He emphasized that while Capitec remains a darling of the market, its high valuation warrants a more measured approach. “Capitec is no longer just a bank; it’s a fintech,” he said, comparing it to global disruptors like Nubank.
Opportunities in Undervalued Stocks
For retail investors, Jacobs pointed to opportunities in mid- and small-cap stocks. He cited Famous Brands and Remgro as examples of undervalued companies with potential for significant upside. “Famous Brands needs operational changes, but it has room to return to its glory days,” he said.
Remgro, trading at a discount to its net asset value, represents another intriguing prospect. Its portfolio includes major holdings in Discovery and FirstRand, both of which Jacobs views favourably. Discovery, he explained, has transformed from a cash-intensive startup to a mature, cash-generating powerhouse. “This year, Discovery has been a star performer,” he said, crediting the growth of its bank and global health insurance divisions.
A Word of Caution
While optimistic, Jacobs warned of headwinds, particularly in resource stocks tied to China’s slowing economy. He also expressed concern about proposed changes to South Africa’s tax treatment of unit trusts. These changes could, in his view, stifle market liquidity and discourage investment. “This is short-term thinking that will hurt the broader economy,” he said, urging policymakers to prioritize growth over immediate revenue.
Balancing Risks and Returns
For Jacobs, the investment game is about balancing risk and return. Whether it’s navigating the hype around tech stocks, gauging the potential of cryptocurrencies, or finding hidden gems in South Africa’s market, his approach is rooted in pragmatism. “Markets thrive on narratives, but fundamentals always matter in the end,” he concluded.
Read also:
