The Rugby World Cup has been the topic of conversation in my circle of friends over the last few weeks and being passionate rugby supporters we have analysed, criticised and complimented the team, the pattern of play, the coach, the referee and each other’s opinions. But earlier this week I listened to a discussion on Afrikaans radio broadcaster, RSG, which goes beyond these observations and opinions.
In this programme, PSG Konsult’s Marius Kruger and ex-Springbok rugby player, Brendon Venter discuss the similarities between rugby and finances – with special reference to the World Cup.
Click here to listen to the discussion in Afrikaans.
Marius and Brendon agree on the importance of long term goals – whether you are playing rugby or planning your finances. It is important to be patient, to deal with criticism and to work towards this goal. Markets and circumstances might change, you might hit obstacles, but your focus has to be on the ultimate goal.
It is important to work with a quality portfolio. Brendon used the example of Springbok coach Heyneke Meyer choosing a very experienced team to play in the world cup. He was much criticised about “the retirement home on the field” – especially so when South Africa lost their first game against Japan!
But although the Springboks still have to survive the quarter finals, they have impressed since that terrible day against the Cherry (or Brave) Blossoms. And especially so the more experienced players. Australia has really been impressive in the World Cup and they also rely on a very experienced team. England, who has opted for a young team has not been so successful.
But how does this relate to finance? Being conservative is not always a bad thing. Do not get rid of “blue chip” performers while they are still doing a good job. Upcoming and dynamic performers are exciting but the trusted performers will get you through.
On the other hand, be careful not to be too sentimental. All players with potential have to start somewhere. Victor Matfield is a “blue chip”, but Lood de Jager’s potential earns him a place in the team. Sometimes a commodity shift is necessary.
Choose your team or portfolio to be consistent and understand that there are horses for courses. You might have a centre pair that perform brilliantly but you have 5-meter scrum. Here your pack of forwards is essential. Sometimes property might be the better option, even though you have a portfolio of shares that performs very well.
Coaching is the other important factor. Your players can perform well, but when circumstances change and the field is wet, the plan has to change, the leader of the pack has to offer another option. In the same way, a company that performs well might have to face a changing economic climate and needs exceptional leadership to survive. Decision-making, especially in tough times, is never easy. You have to trust your coaching team – the same with your financial adviser.
It is important to invest in your team. Venter uses the example of Toulon that bought the best players. It was an expensive exercise, but they became the first team to win a hat-trick of European titles. In short, even if they (players or shares) are more expensive, choose the best team, compile the ultimate portfolio.
I am delighted to be on my way to England to watch South Africa in the quarter finals this weekend, but whether I will be planning my finances when Habana has ball in hand, remains to be seen!