Active vs Passive

It’s often in volatile markets that we find ourselves researching and reviewing more than before. It’s in these moments that we might ask ourselves if it’s worth paying a higher fee for active management of assets, or to just get our exposure through the use of “low cost” investment vehicles? From our perspective, there is no clear right or wrong answer, but we have implemented a strategy that we feel covers our clients across both.

At any given point in time or any given market condition, there will always be a winner and a lesser winner. This just means that some funds might not be losing their clients money, but they may not be producing the best return for them either. The same can be said for different asset classes. With passive or index investing, you get what you pay for. Meaning that if a specific asset class gives you 5%, your ETF or index fund in the same sector should, in theory, give you 5% less costs. Active managers in the same sector could have a spread of -5% to +10%, which could mean either significate under or outperformance. It is with this thinking that the passive model sounds appealing. Why try pick the winner, when you almost certainly can beat the loser?

We can not argue that theory, but when you invest in our funds, you can benefit from both sides.

At Deton Private Wealth, we use a satellite approach to our investing, which we feel offers the investor the best of both worlds. We have set up low-cost passive core funds across the different asset classes, which gives us the exposure to specific sectors or asset classes, but at a fraction of the cost of active management, and then incorporate satellites made up of active managers to enhance, or to provide uncorrelated returns. This approach smooths out volatility while lowering total investment charges to the client.

For more information, please do not hesitate to contact us, or view our website http://www.detonpw.co.za.

Changing lanes

Ive often sat in traffic on Johannesburg’s busy streets, and wondered why so many drivers constantly lane hop… These drivers will cut and push their way into different lanes as that lane speeds up, but the end result is they normally get to their destination in the same amount of time. I always wondered if it was worth all the effort to cut a few seconds off their travel time? I would guess that in some instances, these drivers do cut some time off their ETA, but how often?

This then got me thinking about investing and how some investors try to hop in and out of investments during volatile times, with the aim of timing it perfectly. Are these investors any better than the guy pushing his way through traffic? in the long run, do they achieve a higher return? The short answer is no. In some cases, I’m sure investors could get the call right, and avoid some drop in capital value, but then you have the problem of timing your entry back into the markets. What you normally find is they will panic when the markets drop, and switch everything into cash, just to find that markets have actually bounced back by the time the switch happens. Or they will exit too soon, missing some of the upside, and then wait too long before getting back into the markets.

As it stands now, “cash” gives around 6% yields per annum. It has very little volatility, but little growth. With the Equity market, you do increase your risk to volatility, but in good times, you could see higher yields than cash in less than 1 week. This means if you didn’t time the market right, and missed that run in Equity, you could potentially miss a full year’s worth of cash growth.

So what is the best strategy for investing? Its quiet simple, speak to your Investment Manager, select a risk profile that suits your needs, or investment horizon, and stick to it. Don’t panic when you see markets reacting to situations that are out of your control. You need to ignore the noise, and just let your Investment Manager do what they do best! As per the Wall Street adage – “Time in the markets is better than timing the markets”.

Oil, where to next?

So in the past year, oil has dropped 49%, which is the second biggest fall since inception. The question is why?

The oil price is mainly determined by supply and demand dynamics, and with a slow down in Europe and China, this would explain the demand, but surely this could be countered by OPEC cutting supply, and driving the oil price higher? This would be basic Economics 101! Another reason could be the political unrest in the Middle East? This should not have that big an effect on the price, as they only make up one third of the OPEC production. What about the big move to alternative energy sources?

All of these may be a factor as to why, but one of the main reasons the price is falling, and may continue to fall are the internal arguments in the oil cartel! OPEC or better yet, Saudi Arabia could bump the price of oil back to $90 per barrel, but why? Saudi Arabia has the lowest cost to produce oil in the world. At a cost of $5-$6 per barrel to produce, they are still making 900% profit! So why not get the price higher and make more profit you ask? Well simply put, the U.S. needs a higher crude price to drive the technology advancements in fracking and shale oil, and to potentially move fracking to other countries. Currently, the U.S. is the only country with successful fracking operations. There is also a big drive to hybrid transportation. With a lower oil price, and ultimately a lower petrol price, why would you trade in your V8 Mustang for a Nissan Leaf? If you make petrol more affordable, you make the end user of petrol more likely to keep his gas-guzzler. This in turn means the consumer has more money at the end of the month due to lower expenses on gas, driving consumer spend in other areas. Which, once again is supply and demand!

The bottom line is that the Cartel is at a crossroad. There are views that Saudi Arabia is trying to cripple the U.S. Shale industry, while others say they just pulling a raspberry at Iran and Russia.

The question then must be where to next for the oil price? It would be easy to assume that the oil price may continue to fall to around $30 per barrel, based on the fact that Saudi Arabia seems to be driving the price down, and they still making profit at $10 per barrel, but realistically, even Saudi Arabia needs the price of oil higher! Making profit is one thing, but driving an economy is another. Saudi Arabia relies so heavily on the oil price to sustain GDP, that it would need the oil price above $90 to keep its GDP healthy. This current flooding of oil into the market will have short-term effects on the oil price, but its other factors that will determine the long-term price. We may see lower prices over the next 6 months to a year, but even when Brent crude hit its low of $04 in 2008, it didn’t remain there for long, and 3 years later it was back over $100 per barrel, a 200% increase.

Fed Minutes: A Summarised Version.

Monetary authorities spent their most recent policy meeting agreeing that the economy was improving and no longer needed stimulus tools such as asset purchases, though concerns persisted that inflation expectations may be falling, the minutes of the Federal Reserve’s October policy meeting released last Wednesday revealed.

At its October monetary policy meeting, the Fed left its benchmark interest rate unchanged at 0.00-0.25% and said it was closing its monthly bond-buying program in a move widely expected by markets.

While the economy is improving, some monetary authorities want to be sure recovery remains sustained before raising interest rates, which is seen taking place sometime in 2015, with a few voting members expressing concerns that inflationary pressures remain soft.

“Participants anticipated that inflation would be held down over the near term by the decline in energy prices and other factors, but would move toward the Committee’s 2 percent goal in coming years, although a few expressed concern that inflation might persist below the Committee’s objective for quite some time,” the minutes read.

“Most viewed the risks to the outlook for economic activity and the labor market as nearly balanced. However, a number of participants noted that economic growth over the medium term might be slower than they currently expected if the foreign economic or financial situation deteriorated significantly.”

Deton Chronicle

QUOTE OF THE WEEK  Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it.  If it keeps moving, regulate it. And if it stops moving, subsidize it.       –Ronald Reagan (1986)    FROM WITHIN DETON:   Good morning from a very soggy Johannesburg – it is either feast or famine when it comes to rain. Just 2 weeks ago we were all lamenting at the heat and how desperately we needed rain. Now we have it in droves. Sort of reminds me of the stock market where a few weeks ago we were all looking at doom and gloom, and now we have the US markets hitting new highs and a decent recovery at home as well! Makes our lives very interesting to say the least!    GLOBAL MARKETS  The last 3 months activity around the globe: CURRENT 1 MONTH RETURN 3 MONTHS  RETURN JSE OVERALL INDEX 50355 46673 7.89% 51449 -2.13% USA DOW JONES 17615 16315 7.97% 16561 6.36% GERMAN DAX 9369 8825 6.16% 9069 3.31% JAPAN NIKKEI 17197 14937 15.13% 15161 13.43% HONG KONG 23824 23047 3.37% 24689 -3.50% RAND/$ 11.22 11.03 -1.69% 10.61 -5.44% RAND/EURO 14.00 13.98 -0.14% 14.22 1.57% RAND/POUND 17.84 17.60 -1.35% 17.89 0.28% GOLD 1167 1235 -5.51% 1315 -11.25% So apart from the Rand/$ and the gold price, looking a little better than it did a month ago, but no predictions at this stage!  The last few days has shown that…  The US labour market continues to show improving strength. Initial jobless claims came in at 278K, the lowest level since the Global Financial Crises and the second lowest level in 35 years. This is a strong indication that could signal stronger wage growth which will increase inflation, currently below the Fed’s 2% target. On the political front, the midterm elections have favoured the Republicans by a colossal margin, which has fed through to a stronger tone in the dollar. Over in Europe, the ECB governing council (GC) left the policy rates and longer term refinancing operations (TLTRO) programmes unchanged as was expected. The ECB stated that these programmes are expected to increase the balance sheet to EUR3trn, which was supported unanimously. As expected the BOE decided to leave the Bank Rate and its Asset Purchase Facility target unchanged. Back in South Africa, Moody’s downgraded South Africa’s long-term foreign currency debt rating to Baa2 from Baa1 and changed the outlook on the rating to Stable from Negative. As a result the rand fell victim to stronger US employment data and the Moody’s downgrade which saw the currency move from 11 to 11.30 to the dollar. Adding further to the currency woes is South Africa’s vulnerable and tight electricity supply situation which gave rise to further load shedding risks. Someone needs to step up the plate and start taking some firm moves to fix the economy! SEYMOUR SAYS….  The recent market activity brings me to the tale of the Pied Piper of Hamelin, who I am sure everyone remembers?  It tells the story of a piper who in the year 1284, through the seduction of his pipe-playing, lured away the plague of rats that the town of Hamelin had been experiencing.   After getting rid of the rats, the townspeople of Hamelin reneged on the deal to pay the Piper, and so, in revenge he used the melodic sounds of his pipe to lure away the children of the town, who were never seen again. Only 3 children escaped, and that was because there was a blind kid, a deaf kid and a lame kid.   The moral of this story is that sometimes markets too can seduce us into following it into desolation, and we become so captivated that we lose all sense of where we are, and where we are going, and why we were invested in the first place.  So in a funny sort of way, it pays to be blind, deaf or lame when it comes to investing in equities – By that I mean to be immune to the effects of the tunes that the markets play for us.     This, of course, is why some of the most successful investors on the planet are those who consider themselves to be contrarians.  They don’t listen to the market, for that is the herd, and the herd are like the little children of Hamelin.  The good investor is one who doesn’t base their investment premise on what the market tune is, but choose their own way.   What this really points us towards, of course, is to know where you are going and to not be distracted.  It means having a plan and sticking to it.  If the markets trebled in a year, and you were only half invested, do not believe that the following year will bring the same and then go all-in.  If you do, it will be only because you have listened to the music of the markets too much.  It’s time then to tone down that treble and go back to the base.  LIGHTER SIDE   Out of the mouths of babes:  A little boy opened the big family Bible. He was fascinated as he fingered through the old pages. Suddenly, something fell out of the Bible. He picked up the object and looked at it. What he saw was an old leaf that had been pressed in between the pages.  ‘Mama, look what I found,’ the boy called out. ‘What have you got there, dear?’ With astonishment in the young boy’s voice, he answered, ‘I think it’s Adam’s underwear!’

The European Crisis and Prospects for Recovery

Introduction

Since the financial crisis of 2008, GDP growth in Europe has been dismal. This could be attributed to the appreciation of the Euro exchange rate, which has strengthened 10% on an effective basis between August 2012 and March 2014. This has led to a loss in competitiveness in export markets as well as business confidence with a resulting negative knock-on effect on manufacturing activity which continues to gradually decline as evidenced by the persistently poor PMI numbers coming out of the Eurozone countries. Effects of the latter phenomenon have been more pronounced in countries that have been slow to take up and implement structural reforms namely, Spain and Germany. To add to the Eurozone woes, rising political tensions in Ukraine are adversely affecting sentiment on the continent.

It has not been all bad though, Europe can still point out to continually and gradually declining bond yields; stabilizing unemployment which in turn has given consumers new found confidence to increase consumption; signs of renewed housing market transactions and rising construction activity as some of the factors that gives the continent and investors alike hope for an improved economic outlook.

Economic recovery: Scenarios

Investment: as driver of growth

In light of the above it is plausible that going forward, external demand from relatively thriving economies like the US and Emerging Markets like the BRIC countries supported by a weaker Euro will form the basis of economic growth in Europe which will be driven by investments.

Consumer spending: as driver of growth

With consumer confidence on the rise as unemployment abates, there is a high degree of probability that consumption will follow suit. To further support consumer spending in order for it to have material effect on economic growth, authorities could relax lending conditions.

Avoiding deflation

It is encouraging to note that in terms of rhetoric and policy action there has been a shift in emphasis from austerity measures which comprises of freezing, capping and or cutting expenditure to accommodative monetary policy- best exemplified by the recently instituted bond buying program by the ECB also known as quantitative easing-meaning that deflation is likely to be avoided. However, given the continuing substantial underutilization of resources in the labour market, the Eurozone may still struggle with very low levels of inflation for long time to come.

Conclusion

As I intimidated earlier, risks to growth forecasts are balanced. Downside risks include impact of US and the European Union (EU) sanctions on the Russian economy and Russia’s retaliatory measures. Upside risks encompass stronger-than-expected earnings growth in Germany and a positive shock to exports boosted by the weaker euro and a stronger world demand.

Impact of the current account deficit on the financial markets

History is littered with examples of countries that have experienced turmoil in financial markets due to large current account deficits. Turmoil in the markets is more pronounced if the deficit is being financed by short term portfolio investments.
The classical textbook definition of a current account deficit is the difference between imports and exports of goods and services. A decline in trade balance caused by either increased demand for imports and or poor export performance, as was the case in the second quarter of 2014 according to the Reserve Bank’s latest quarterly bulletin reported last Tuesday can increase the current account deficit.

A large current account is an imbalance which is always undesirable. However, for investors to navigate the treacherous waters caused by a current account deficit it is important that they establish the source of imbalance and how it has been financed. Because being large in itself may not necessarily lead to turmoil in the markets, case in point- the US has been running huge current account deficits since 2006 without any negative repercussions on the financial markets. Although studies by the IMF have shown that large deficits are ultimately not sustainable as a result of financing problems or a change in investment patterns in a domestic economy.

In the case of South Africa, a stubbornly low savings rate has meant that the country has had to rely on foreign investment to fund the deficit since first quarter of 2006, in particular through “…a combination of direct, portfolio and, to a lesser extent, other investment flows”. This has not been a problem in the past, especially in the wake of the global financial crisis which later morphed into a full blown economic crisis resulting in ultra-loose monetary policy, circa 2008 in the US and Europe making emerging markets attractive investment destinations.
The times are changing though. Whereas in the past 6 years, the only risk to South Africa’s attractiveness as an investment destination was external- from global markets. At the moment South Africa’s macroeconomic environment is weak, implying risk may arise internally as well.

Contrast these prevailing economic conditions in South Africa with recent developments in both the US and the UK where monetary authorities have already made the commitment to put an end to their respective quantitative easing programs and are seriously considering hiking interest rates. A rate hike in the US specifically, will fundamentally alter investment options across the universe posing a threat to the attractiveness of South Africa along other emerging markets as investment destinations.
Given the scenario as described above. Is it time for investors, foreign ones in particular to dispose of their equities in SA stocks? My view is that not yet, not least because returns on capital on the JSE represents income from outside the borders from South Africa but the country despite its economic and social challenges continues to attract capital and investment inflows, the latest bulletin from the Central Bank highlights the fact that foreign direct investment has more than tripled in the second quarter to ZAR 24.6 Billion Rand from ZAR 8 Billion in the first quarter.

Given the ever widening deficit and other disappointing data, it is counterintuitive that investments especially in long term projects have increased. However, it is important to note that these inflows are a vote of confidence in the future of South Africa despite what the credit rating agencies may think. Embedded within this economic data- inflows- is a key political and social message subtly making a positive judgment call about the relative capacity of South Africa’s monetary and fiscal authorities operating within the existing political system to come up with a feasible plan to narrow the current account deficit. And this has and continues to inform my optimistic outlook on the fate of domestic financial markets.

Property, is it a buy, sell or hold?

The most frequent question we get from our clients about property is, should we pay the bond or invest the capital. The second most common question we get is, should we use our investment to buy an investment property and rent it out, or just leave it?

The answer to both of these questions is not clean cut. The fact remains, unlike shares, ETF’s, or Unit Trusts (like the Deton funds) which are measured and priced, property is not. This means you can physically see an increase in your investment over a set period of time whereas with residential property, there is very little data to show the same. Property is an asset, but you only realize your profits or losses once you sell the asset. This means that there is no real return value on this asset. The general thinking is that you buy a property, sit on it for a few years, and you either rent it out or you live in it, and several years later you sell it for double. This may have been the case a few years ago, but since 2007, the property market has not really moved. Once again, as stated, this may vary depending on area and depending on leverage (bonded or not), but on average, property has not beaten inflation (according to states given by ABSA bank).

So the question is, do you use property as an investment or not? Well, if you had invested R1 million in property in 2007, (7 years ago), the truth maybe that you have only received 3% or less from rental income. And the capital price hasn’t beaten inflation of 5.7% (results will obviously vary), so your R1 million is now only worth R1,500,000, provided you can find a buyer for it. And you would have received R230,000 in rental income profit, once again, provided it wasn’t bonded. So your R1 million is now worth around R1,8 million after 7 years. The real question is, what would it be worth if you were invested in the stock exchange?

Since January 2007, the JSE all share has given us over 100% return. Which is around 10.75% compound over the period, meaning your R1million has now doubled and would be worth around R2,050,000. If you consider that the JSE All share is only ranked in the middle of the Unit Trust pack over 7 years, where would you be if you had invested in a Unit Trust? Well one of the well known Equity managers in SA has compounded at a little over 14% for the 7 years, meaning your R1 million would now be worth R2,5 million. If we use the top performing Equity manager over the same period, this return would be closer to R3 million.

Remember all of these figures and values above are just looking at capital price, and would exclude any dividends on the shares. I cannot factor in the other variables on the property like monthly rates and taxes, maintenance and general upkeep of a property. Seeing that different properties have different needs, this would also be impossible to work out.

Where does the above leave us with a rising interest rate cycle and bonded property? The truth is, we are in a rising interest rate cycle, and we could see rates going up by another 2% over a 24 months period. While this increase helps our clients with interest bearing investments, it doesn’t help the man in the street with debt. This means the higher the Prime rate, the better “return” you receive by paying off a bond. So with this being said, what sort of return could you see from paying off debt? With the current Prime rate at 9.25%, and a potential 1-2% increase over the next 24 months, this could mean you could see a return of up to 11.25% if you have the capital to pay off your bond. While this return is not a bad return, it is not a compound return, as such, a return of 10% plus compounded over 5-10 years on the JSE would still beat this 11% return. If we start seeing rates return to the 13-15% levels, then there may be an argument for debt consolidation versus Equity investments. But while the Equity space is giving 5-6% dividend yields and capital growth in the teens, my view is that Equity is still the place to be.

So based on the above, where does this leave us? Do we now sell our properties we live in and go rent? Do we sell those investment properties and give the profit to your trusted investment manager at Deton Private Wealth to invest? Well I guess that is the million-dollar question, and it is definitely one that could be argued all day, but do we really have time for that? Personally, we are not big fans of residential property as an investment, and feel that over the longer term, Equity will outperform cash and Commercial Property. Another factor that you would need to consider is if you require an income, could you break a corner of your gingerbread house off to eat if money is tight?

Deton Chronicle 08/10/2014

QUOTE OF THE WEEK  

Money can’t buy happiness – but somehow it’s more comfortable to

cry in a Porsche than in a Corolla.

Unknown

  FROM WITHIN DETON: 

There has been a reasonable amount of panic amongst some clients over the fund’s performances of late. To fair, we have been warning of the potential for short term volatility quite a bit over the past few months, so this should not have been a total shock – we have entered a very scratchy period in the global economic arena (as discussed in more detail below). Is this a crisis? No, we don’t believe it to be the beginning of the end. In fact, we actually welcome a correction as things have become a little bit to “frothy” of late.

On the positive side, this correction also presents buying opportunities. In the words of Warren Buffet: “be scared when everyone is greedy and be greedy when everyone is scared”. We have been scared and thus had quite a lot of protection in the funds, as everyone out there was being greedy. Now that there is a bit of a panic, we see an opportunity to do some shopping.

But just how have we faired amidst all of this since the peak in the JSE Overall Index on the 29th July to date, and have we done what you pay us to do? We believe we have, and the numbers stack up as follows (note that I have NOT included the Balanced portfolio, as this has only just kicked off, so not enough data for that):

	29/07/2014	CURRENT
JSE	52242	48712	-6.76%
STABLE	10502	10470	-0.30%
MANAGED	10761	10694	-0.62%
EQUITY	10689	10572	-1.09%
GLOBAL	10180	10374	1.91%

So I would hazard a guess that we HAVE done our job, with the equity fund only falling 1.09% VS the JSE at 6.76%. Please note, however, that should you be drawing an income, you WILL see slightly different returns depending on how much you are drawing.

I trust that this eases your minds somewhat?

GLOBAL SNAPSHOT

	Current	Weekly change	Monthly Change	Annual Change
JSE ALL SHARE	48712	48875	51610	43726
		-0.33%	-5.62%	11.40%
DOW JONES (USA)	16719	16805	17111	14777
		-0.51%	-2.29%	13.14%
FTSE (UK)	6496	6558	6835	6437
		-0.95%	-4.96%	0.92%
DAX (GERMANY)	9086	9382	9758	8592
		-3.15%	-6.89%	5.75%
ZAR/US$	11.24	11.24	10.67	9.96
		0.00%	-5.07%	-11.39%
ZAR/POUND	18.02	18.25	17.41	16.04
		1.28%	-3.39%	-10.99%
ZAR/EURO	14.19	14.2	13.94	13.55
		0.07%	-1.76%	-4.51%
BRENT CRUDE OIL	91.01	94.12	100.28	109.64
		3.42%	10.19%	20.47%
GOLD	1212	1209	1259	1324
		0.25%	-3.73%	-8.46%

It does not take a rocket scientist to see that it is not just us at home who are under pressure. Europe, in particular, is not looking very pretty right now!

GLOBAL MARKETS

According to Reuters, US markets closed slightly lower in volatile trading on Monday, with the S&P 500 index failing to hold above a key technical level as there were no real catalysts to support the market, while traders nervously turned their attention to the start of earnings season due to the recent Dollar strength and continued weakness in the Eurozone.

The week saw some good news on the housing front in the US. Home prices were up 0.6% in July, but the annual growth rate slowed down, rising 6.7% yoy. This, in fact, was a good report since home prices are starting to outpace inflation and every tick up translates to more upside for home owners who have been underwater for some time now. The ADP payroll report showed that private sector hiring picked up in September, adding 213 000 jobs, the 6th consecutive month in excess of 200K in job growth. Fundamentals in the US continue to strengthen.

The IMF said it expects the Federal Reserve to start raising interest rates in the middle of next year, a projection that’s in line with the median estimate of economists surveyed by Bloomberg. The U.S. central bank has held the federal funds target rate near zero since December 2008.

“The slack in the economy, well-anchored inflation expectations, and downside risks to the outlook imply that the current accommodative monetary policy remains appropriate,” according to the fund.

The euro area will grow 1.3% next year, slower than the 1.5% pace predicted in July, after a 0.8 percent gain this year, according to the IMF.

“We see the major risk in the stalling of the euro zone,” IMF Economic Counselor Olivier Blanchard said in an interview on Bloomberg Television. “The risk of recession is there,” he said, adding that European authorities should increase infrastructure spending to boost growth. If inflation doesn’t improve in the currency bloc, the European Central Bank may need to do more to stave off deflation, including the purchase of sovereign bonds, according to the fund.

In Europe, the ECB president, Mario Draghi, missed a critical opportunity to expand QE to sovereign debt purchases. Meanwhile, the Eurozone’s economic powerhouse, Germany, posted a contraction in its manufacturing sector, a precursor to recession. The ECB also kept its main policy rate unchanged and disappointed investors who had hoped for a commitment to ECB balance sheet expansion.

LOCAL MARKETS

Back in South Africa, the continued bullish US economic data has put pressure on EM currencies, particularly the ZAR. However, the rand climbed as much as 0.9% against the dollar on Monday as investors applauded the appointment of respected technocrat Lesetja Kganyago to succeed Gill Marcus as central bank governor.

South Africa’s August trade and budget balance data reflected notably wider-than-expected deficits, highlighting that the country’s twin deficit problems remain severe. The BER consumer confidence index (CCI) reversed course and fell back to -1 in Q3 2014, which indicates that consumers’ rating of the outlook for the national economy and their own household finances deteriorated compared with the reading in Q2. On a more positive note, the manufacturing PMI printed above 50 for the first time since March 2014, signalling that operating conditions continue to improve gradually.

The gold price traded above the $1,200 an ounce level in Singapore on Tuesday, following some profit-taking in the US Dollar, but bullish sentiment over the US economy, as well as the possibility of higher interest rates kept investors on their toes. Gold was last trading at $1,204.60, with the platinum price quoted at $1,242.00, while palladium is trading at $768.10.

SEYMOUR SAYS…. 

THE MAGIC BANK ACCOUNT

OK, this is not a traditionally insightful comment from young Seymour around financial markets etc., but it was forwarded to me by a friend and I felt that I just have to share it with all of you – CALL ME A SOFTIE IF YOU LIKE!

The author is unknown, and it was found in the billfold of coach Paul Bear Bryant after he died in 1982.

Here we go – Imagine that you had won the following *PRIZE* in a contest: Each morning your bank would deposit $86,400 in your private account for your use.  However, this prize has rules:

The set of rules:

1. Everything that you didn’t spend during each day would be taken away from you.
2. You may not simply transfer money into some other account.
3. You may only spend it.
4. Each morning upon awakening, the bank opens your account with another $86,400 for that day.
5. The bank can end the game without warning; at any time it can say, “Game Over!”
6. It can close the account and you will not receive a new one.
   What would you personally do?
   You would buy anything and everything you wanted right? Not only for yourself, but for all the people you love and care for. Even for people you don’t know, because you couldn’t possibly spend it all on yourself, right?
   You would try to spend every penny, and use it all, because you knew it would be replenished in the morning, right?
   ACTUALLY, This GAME is REAL … 
   Each of us is already a winner of this *PRIZE* –  We just can’t seem to see it.
   
   The PRIZE is *TIME*

1. Each morning when we awaken, we receive 86,400 seconds as a gift of life.
2. And when we go to sleep at night, any remaining time is NOT credited to us.
3. What we haven’t used up that day is forever lost.
4. Yesterday is forever gone.
5. Each morning the account is refilled, but the bank can dissolve your account at any time WITHOUT WARNING…
   SO, what will YOU do with your 86,400 seconds? Those seconds are worth so much more than the same amount in dollars. Think about it and remember to enjoy every second of your life, because time races by so much quicker than you think.
   So take care of yourself, be happy, love deeply and enjoy life! Here’s wishing you a wonderful and beautiful day. Start spending….
   “DON’T COMPLAIN ABOUT GROWING OLD!
   SOME PEOPLE DON’T GET THE PRIVILEGE!”

LIGHTER SIDE

  “4 Worms In Church”

A minister decided that a visual demonstration would add emphasis to his Sunday sermon. Four worms were placed into four separate jars.

• The first worm was put into a container of alcohol.
• The second worm was put into a container of cigarette smoke.
• The third worm was put into a container of chocolate   syrup.
• The fourth worm was put into a container of good clean soil.

At the conclusion of the sermon, the Minister reported the following  results:

The first worm in alcohol ……….   Dead;

The second  worm in cigarette smoke …….. Dead;

Third  worm in  chocolate syrup ………… Dead;

Fourth  worm  in good clean soil …………Alive

So  the  Minister asked the congregation, “What  did you  learn from this demonstration?”

Maxine  was  sitting in the back, quickly raised her hand and said . ..  .

“As  long as you drink, smoke and eat  chocolate, you  won’t  have worms!”

That pretty much ended the  service!