Catching up with Anton Eser, 10X CIO

17 October 2023

How did you get involved in financial services?

From a young age, I’ve been fascinated with history and how the world works, so combining that with a penchant for numbers, it naturally drew me into the investment industry. I studied financial accounting and economics at university, which was extremely useful. I was never an expert in either (thankfully) but having an understanding of both helped me connect the dots in deciphering how companies and the global economy works. My career journey began as a bit of a generalist, but after leaving SA in my mid-20s, I found my place in fixed income at an asset manager in Edinburgh. 

What was your first investment, and do you still have it?

My first investment was a shocker. Back during the tech hype in the 90s, I bought a company called Brainware, which went bust within months of my purchase. It wasn’t a huge amount of money, but it was enough to hurt. I learnt a lot, though. Do your research, don’t buy the hype, there is no easy money, and leave the gambling for the gamblers. I discovered that investing, at its core, is a world of mathematics and probabilities, with risk management being your most important tool. It sounds boring, but in a way it should be. 

What have been your best – and worst – financial moments?

The 2008 Global Financial Crisis was a defining time in my career. Managing funds through a complete market meltdown not only tests your financial skills but also teaches you a huge amount about yourself and human behaviour. I managed the balance sheet of a large financial institution in London and was very fortunate to work closely with the CEO to navigate some very difficult situations. It taught me a huge amount about thoughtful but decisive decision-making. A lot of asset owners lost a lot of money through cumbersome, committee-based decision-making processes, but we were able to cut through that and participate in a lot of the opportunities presented by forced liquidations at incredibly attractive levels. However, my most challenging period followed the European debt crisis in 2012. I fixated too narrowly on the technical aspects of the euro bailout, neglecting the intricate political dynamics at play. I dug myself a bearish hole that got harder and harder to get out of. It’s a well-known cliché to not fight the central banks’ ability to rescue financial markets. They have the money-printing press! I learnt that the hard way.

What are some of your biggest lessons?

I’ve learnt many lessons about financial markets, the global economy, and human behaviour over the years. Yet, perhaps the most important lessons are the lessons I’ve learnt about myself. Without failing, it’s hard to grow as a person. I’ve failed many times in both investing and as a leader of large teams. While it didn’t feel great at the time, in hindsight, all those experiences have helped me improve. It taught me to be a better listener, intentionally seek out the alternative view, and recognise that winning every battle can be counterproductive and that your biggest enemy is your own ego.

What makes a good investment in today’s economic environment?

Any investment decision must always first be defined in the context of the investor’s unique circumstances. The answer for a 25-year-old working in the UK is very different to a 75-year-old pensioner living in South Africa. Most of our investors are your average South Africans saving for or living in retirement. Their time horizon is typically longer than 10 years, but they also require stability of returns. Diversification across multiple asset classes plays a pivotal role in achieving this balance. To get that right, we focus on risk management and asset class valuations. Our portfolios are currently skewed towards inflation-linked SA government bonds and a bias towards defensive, consistent dividend-paying global equities and emerging markets. This combination offers a well-rounded solution, providing dependable income that outpaces inflation and opportunities for growth.

We’re living in very interesting times as we deal with many long-term themes, including ageing societies, climate change, artificial intelligence and deglobalisation. But to me the most important theme that is playing out right now is the escalating burden of debt and the increasing cost of funding. For the last four decades, we’ve lived through a cycle of declining interest rates and a relentless increase in debt across all parts of the global economy, from the US government through to property developers in China. Often economists have underestimated the profound impact this accumulation of debt has had on economic growth. As interest rates declined globally, it provided the fuel for financial engineering and a reckless borrowing from the future to spend today. With interest rates on the rise, that dynamic is slowly going in reverse. The global economy simply cannot grow without a continuous cycle of debt accumulation. It’s effectively a Ponzi scheme and, as history shows us, unfortunately those don’t end well.

What are some of the books you’ve read that you will recommend?

I’ll pick three that have in some ways coincided with my own journey in this industry over the past 25 years.

Liar’s Poker by Michael Lewis

– I read this when I was in university and couldn’t put it down. Lewis has this unique ability to write stories about the world of finance that are both incredibly accurate, and very entertaining (read the Big Short as well if you haven’t).

Fooled by Randomness by Nassim Taleb

– I almost don’t want to put this one down on my list as Taleb is so incredibly arrogant, but the lessons I learnt around risk and the behavioural elements of finance were hugely important for how my own approach evolved. He has a genuinely insightful perspective from both a financial and philosophical viewpoint.

Thinking, Fast and Slow by Daniel Kahneman

– be warned that this is not a page turner, but it’s a book that I couldn’t stop thinking about when I finished it, and still do to this day. It’s not a book about finance; nevertheless, the lessons I learned about the way we think have helped me gain a better understanding of my own shortcomings and the influence of psychology on decision-making and markets.

10X Investments is an authorised Financial Services Provider (FSP number 28250). The content herein is provided as general information and is not intended as nor does it constitute tax, legal, investment, or financial advice as defined by the Financial Advisory and Intermediary Services Act, 2002.

The 10X Living Annuity is underwritten by Guardrisk Life Ltd.

10X Fund Managers (RF) (Pty) Ltd is an approved manager of collective investments schemes in securities in terms of Section 42 of the Collective Investments Schemes Control Act, 45 of 2002.

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