More than hot tips: Why we still need investment analysts
The job of the Investment Analysts Society of SA is education, and it has never been more vital
Formed by a cadre of the like-minded in 1968, the Investment Analysts Society of SA (IAS) has evolved significantly. Most similar societies around the world have either folded or been absorbed into the US-headquartered Chartered Financial Analyst Society.
At a function to commemorate the society’s 50th anniversary a number of speakers (including me as the current chairperson) reminisced about the first few decades of the organisation, and deputy chairperson Lungile Malinga gave her vision of how the IAS is likely to evolve in the future. Malinga reminded the audience of the objectives of the IAS, which are to improve the general quality of investment analysis and analytical techniques; establish and maintain professional standards; and foster the interchange of ideas to solve common problems.
Pivotal in all these goals was the establishment in 1972 of the IAS Journal. In the early days, the journal attracted contributions from well-known business people and economists such as Brian Gilbertson and the late Ronnie Bethlehem. Lately it receives contributions from as far afield as South Korea, South America and Eastern Europe. No longer in hard cover, it is now fully electronic. Its editors are Wits University professors Christo Auret and Robert Vivian.
The mainstay of IAS activities has always been company results presentations. These were usually held after the market closed, in the auditorium of the old JSE in Diagonal Street in the Johannesburg CBD. The mining houses often hosted results announcements at their offices, as did SA Breweries. Not surprisingly, the SAB presentation was always heavily oversubscribed and it wasn’t just the beer that attracted analysts, as then CEO and later chairperson Meyer Kahn kept the audience in the palm of his hand, while FD Selwyn MacFarlane brought everyone back down to earth with the numbers. It was a hugely successful double act and it was quite common for the drinks afterparty to carry on until well after midnight.
Also, back then, field trips to far-flung parts were quite common and often organised by companies such as Gencor, Sappi, Sentrachem and De Beers. Of particular notoriety were the mining analyst trips, at which vast amounts of alcohol were consumed en route. In today’s politically correct and highly regulated environment such excursions are no longer on offer, and unfortunately our sclerotic mining industry does not have much to showcase.
A feature of company presentations has been the growing use of webcasts and conference calls to replace or augment live presentations. Although electronic or telephonic dissemination of information has become the global norm, nothing substitutes for live presentations where one can compare opinions on a stock with peers and talk to corporate management. SA remains one of the few countries in which live company presentations are still the norm, rather than webcasts or teleconferences.
Chris Gilmour is an investment analyst.