January 4, 2015

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INVESTMENT
INVESTMENT
GUIDE GUIDE
SAVING

One day youll

be glad you did
Youth makes it easier for investors to take on risk and
to get in and out of small cap shares by Charlotte Mathews
discipline which makes it harder to
dip into her savings.
She also puts a few hundred rand
into her old student account in
months when she has spare cash.
This is money she can access for
extra spending, including on treats
like cosmetics.
My father always said that money
doesnt grow on trees, she says.
He made me very independent. I
get embarrassed if I have to ask my
parents for money.
The JSEs penny stocks are the
favoured savings vehicle for Derek
Hendricks, a 25-year-old with an
economics degree. He says he has
generally done quite well out of
them, citing shares like Wescoal and
Torre Industries. He has held shares
for as little as a couple of months
and as much as two years.
Hendricks believes he has an
advantage when it comes to penny
stocks because his youth makes it
easier for him to take on risk, and
being a small investor enables him
to get in and out of small cap shares.

A big fund manager with millions to

invest cannot be so exible.
The point about being able to
take on more risk is also true when
it comes to debt. Big-ticket items
like cars and houses are out of the
reach of most people in their 20s
but theres nothing wrong with
taking on manageable levels of debt
to build up assets, particularly if it
starts with having saved enough
to be able to put down a decent
deposit.
Hendrickss next goal is to club
together with some of his friends in
a buy to let property, for which he
will sell his shares to contribute to a
deposit, he says.
Khumalos savings goal is to have
her own business one day. When
I do, I would like to have some
comfortable money behind me, not
just my normal salary, she says. She
hopes disciplined saving will stop
her from being emotional about
money, and to see it as something
that will help me to move
forward.

THERES NOTHING
WRONG WITH TAKING ON

MANAGEABLE
LEVELS OF
DEBT TO
BUILD UP
ASSETS

Gallo Image/Thinkstock

STARTING OUT

or some people, developing a savings habit

starts early in life, when
their parents encourage
them to set aside some
of their pocket money.
For others, it develops only in their
20s, when they begin to earn a salary and have some spare cash.
And there are others, of course,
who are never able to cultivate an
ability to save.
Lindi Khumalo, who is 24, saves
in two ways. She has a debit order
for R1 000 a month that goes into a
three-month notice account. This
not only earns better interest than a
current account but also imposes a

Financial Mail

January 4, 2015

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INVESTMENT GUIDE
group shows, solo shows and biennales, special projects and collaborations and all of these are usually
reected in an artists CV.
Age is obviously a question and it
pays to catch them young. Though
track record counts, supporting
an artist at the beginning of his or
her career is an investment in itself
and a collection that traces the
development of style gives a certain
coherence that will translate into
value later.
With younger artists it pays to look
at the commercial outlet that is doing the selling.
Nowadays it is very rare to buy
straight out of the artists studio,
but if you can youll be chopping a
signicant mark-up off the price
that you would pay a gallery.
Two of the most established
galleries dealing in young up-and-

coming artists are based in the newly gentried district of Woodstock

in Cape Town and each has its own
distinctive stable of artists who
have made waves both locally and
abroad.
Blank Projects, operated by
Jonathan Garnham and situated
opposite the Stevenson Gallery on
Lower Main Road, has some notable
artists whose work is crossing the
boundaries between painting and
installation and attracting a lot of
attention. One of its exhibitions was
a solo show by Gerda Scheepers
titled Pyscho Socio Surface, a range
of sculptures and paintings that
started from R25 000 and went up
to R90 000.
Another artist from the Blank
stable to keep an eye out for is
abstract painter Jan-Henri Booyens.
His big paintings reach R75 000 but

his drawings and prints present a

more affordable point of entry into
his work, starting at R4 000. In his
midrange one can pay R30 000 for
paintings of a metre square. Booyens has managed to translate his
distinctive style across mediums,
which makes him an attractive artist to collect.
The Whatiftheworld Gallery,
operated by Justin Rhodes, also in
Woodstock, has been around since
2008 and has a distinctive group of
young conceptual artists who work
across mediums, as well as some
more established artists.
Entry-level works start at about
R12000, for which you can get a
small watercolour by Michael Taylor
or a sculpture by minimalist Rodan
Kane Hart.
In the midrange from R30 000 to
R50 000 you could get a demolition

Jan-Henri Booyens
Imprints, 2014
Spray paint and
marker on paper
R5 000

Gerda Scheepers
(above) Gathering 2014
Oil and acrylic
on fabric, wood
R38 000

18 Financial Mail

January 4, 2015

painting by Rowan Smith, who has

recently returned from studying
abroad, or even a work by Lyndi
Sales, whose unusual sculptures, use
of material and extensive exhibition record make her popular with
collectors.
Those looking to spend between
R100 000 and R250 000 can look at
a big tapestry by Athi-Patra Ruga,
who has been selected as one of the
2015 Standard Bank Young Artists.
In this range one could also obtain
a substantial drawing by Cameron
Platter, who has exhibited extensively abroad.
For those whose taste is a little
more traditional, the auction circuit
is the place to watch.
In the secondary market, prices
are determined by estimates rather
than xed evaluations set by galleries, which means that good deals are
easy to pick up. Auctions are also
one of your rst stops when looking
to start recycling your collection
back into the market once youve
lived with something for too long.
Though the big names like Irma
Stern and JH Pierneef have dominated the headlines of the secondary market recently, there have
been other artists who have been
notable performers.
On the contemporary side of the
curtain is William Kentridge, whose
work at the recent Strauss & Co sale
in Johannesburg far exceeded its
estimates, cementing his presence
as one of the most formidable SA
artists producing work today.
Another solid performer has been
Walter Battiss. There has been a
resurgence of interest in his work.
It now fetches into the hundreds
of thousands of rand. Strauss & Co
is an interesting model to look at
regarding the investment cycle of a
collection.
Also at its recent sale was a
selection of 30 works from the
Harry Lits collection of works by the
Amadlozi Group, which included
Cecil Skotnes, Sydney Kumalo and
Eduardo Villa.
With relatively conservative estimates, some of the lots in this section of the sale more than doubled
their high estimations, reaching
R360 000 in the case of Villa and
R1,25m for Kumalo, illustrating how
a thoroughly built collection grown
over time can provide a solid return.
For those looking to recycle their
collections, auctions are not the
only way to go. Another facet of

the secondary market is the dealer.

The thing about art dealers is that
they usually trade only in works
with signicant historical value or
a proven track record on both the
secondary and primary markets.
This is not the way to turn around
a purchase of a young up-and-coming artist but rather an alternative
to oating an important work on
an auction, where it might not sell
because of a miscalculated reserve.
The danger is that such works
obtain market saturation, which
means that the next time they appear the sellers desired value will
have diminished. Some of the most
notable dealers are Johans Borman,
Warren Siebrits and Joo Ferreira,
who specialise in works by important SA artists.
Recently Siebrits, who is generous
with his wealth of knowledge about
SA art, has been showing a collection of Battiss that he put together
some years ago for a private client
and that includes some notable
rarities.
Ferreira, who markets his services
as discreet and professional advice
for the ardent collector, has also
produced some gems recently,
including a Steven Cohen screenprint from the 1980s which was
shown at the National Arts Festival
in Grahams
town.
Borman, who is based in Cape
Town, is one of the most established
dealers on the secondary market
and trades in much of what one
could expect to nd on the auction
circuit.
So before you go straight to auction with your historical gems, it
would be sensible to shop around
the secondary market and get as
much advice as you can before
deciding where and how to test the
value of your investment and to
reap its rewards.

Gerda Scheepers (below)

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