On the 3rd of January , US Special Forces flew into Venezuela and captured the President, Nicolas Maduro, and his wife. Maduro was labelled a narco-terrorist by the US in 2020 and will face charges in New York. If this is the way 2026 kicks off, we are in for a wild ride. Maduro was a dictator and Venezuela suffered under his regime, just like so many other countries currently run my militants. The sad thing is that, just like in South Africa, only politically connected people benefit when the ruling government is compromised by irrational ideology and corruption. Talking about South Africa, have you seen how well our shares, currency and general financial standing have done? The JSE All Share index is up 38% and the rand is 12% stronger against the dollar. But just to give these returns some context, our Resources companies were up close to 140% for the year 2025 and the dollar has been under pressure all over the world. So if you had your investments in shares outside of gold or platinum, you did well but not that ridiculously well. Look at this table for returns across different asset classes.
For a long time the US could spend whatever they wanted because they had the world’s reserve currency and could just print more money if needed. We are seeing a global effort to move away from dependency on the dollar, causing it to weaken. The biggest beneficiary has been gold, as central banks bought more to use as a type of collateral. The US has taken notice of this stealth attack on its currency and knows very well that the chink in its armour is its high debt-to-GDP ratio. We are seeing a concerted effort by the US to cut spending, especially those billions of dollars it has been giving to foreign aid and military assistance for Europe. It is clear that the Trump administration has had enough of giving money to NGOs in countries that take the money, but then turn around and curse the US for being fascist. The US is becoming lean and mean, it is consolidating around its own interests and is cutting the umbilical cord with those countries and institutions that have taken advantage of their generosity for decades.
The repercussions of this change in attitude by the US are still to be seen, but make no mistake, countries like China, Russia and Iran have been playing hardball for centuries. There is a palpable shift in geopolitical alliances. As a country, you have to choose either the West, namely the US and Europe; or the East, namely China and Russia. For an insignificant country like South Africa, the best thing to do would be to stay neutral; but unfortunately the ANC has a deeply rooted ideology that overrides their rationality, causing them to side with the East. Fortunately for us, we are a miracle of humanity. South Africans as a people are predominantly peace-loving, energetic, colourful and adaptable. There have been so many times when we could have collapsed like Zimbabwe, Libya, Iraq or Syria; but after a disastrous decade under Zuma, we are growing stronger against all odds.
As is the case with all things humans are involved in, the pendulum swings too far and we can see that now with Trump wanting to take Greenland from Denmark. If you were an uninformed investor, you would avoid investing in the USA due to their bullying attitude, but they have one thing going for them and that is their unbelievably strong innovative capability. Companies in the US are still leading the new evolutionary technological wave called artificial intelligence, which will very soon morph into autonomous robotics. This is a generational wealth-creating opportunity and you have to be invested in it.
As we stand at the beginning of this new year, we know not what the future holds, but we cannot be paralyzed by this uncertainty. We have to believe that politics will cause volatility, but only in the short term, and that innovation and necessity will cause those companies we are invested in to flourish. We should not overestimate our own convictions, we might be wrong. We have to provide sufficient liquidity in our portfolios for the shorter-term volatility so that we are never forced to sell a share and realize a loss. We have to stop worrying about things we have no control over and become extremely good at those things we do control. May we enjoy another year of positive returns.