Look

Is this time different?

 

Source: PortfolioMetrix

 

Late 1990s – Tech Bubble

The first chart illustrates the global IT sector in the late 1990s, where share prices surged much faster than company earnings. While profits did rise, the growth was slower than valuations, creating a widening gap that reflected the period's excitement and speculation, often termed “irrational exuberance.” Eventually, when expectations became unsustainable, prices plummeted.

 

Today – Post-AI Surge

The second chart highlights the global IT sector since the launch of ChatGPT, showing significant price increases. Unlike the late 1990s, earnings have also grown meaningfully. While valuations have risen, they remain more aligned with actual profitability, indicating that the rise is based on genuine earnings growth rather than just optimism.

The charts show a key difference: in the late 1990s, prices outpaced earnings, while today, they are more in sync. This suggests the current situation is not a clear repeat of the dot-com bubble, although risks remain.

 

Listen

In conversation with Hendrik du Toit (NinetyOne)

I always look forward to listening to Hendrik du Toit. He is, in many ways, a titan in our industry, but what strikes me most is not his stature; it’s his clarity. He speaks in a plain way.

What he returns to repeatedly is change. Markets change. Politics changes. Technology changes. His message is not to resist it, but to learn to move with it, staying curious, open, and adapting before you are forced to.

And yet, alongside that flexibility, he speaks about something that sounds almost contradictory: stubbornness. Not stubborn about everything, but stubborn about a few core principles. He argues that if you have too many principles, you won’t truly hold any of them. Focus on what is most important and what you stand for.

 

Learn

Where are you looking?

I was recently reminded of an old story about a man who lost his wedding ring in the dark basement of his house. After searching for a while without success, he walks outside and begins looking under the streetlight. A neighbour joins him and asks where he lost it. “In the basement,” he replies. “Then why are you looking here?” the neighbour asks. “Because this is where the light is.”

It’s funny. And uncomfortable. Because we do this all the time.

In financial planning, the “streetlight” is performance. Returns. Market commentary. Charts that glow neatly on a screen. It feels productive to talk about these things. They are measurable. They are visible. They are well-lit.

But often, the real questions sit in the basement.

What is enough?
What does retirement actually look like?
How do we want our children to experience wealth?
What trade-offs are we quietly making?
What are we afraid of?

What decisions are made out of someone else’s lifestyle?

These are hard conversations. There is no perfect spreadsheet for identity, purpose, or family dynamics. So, we stay under the streetlight.

The irony is that better investment decisions often come after we have spent time in the basement. When goals are clear, when values are articulated, when fears are

The basement is not a place of fear. It’s a place of clarity.

Sometimes the most valuable part of planning is not adjusting the portfolio; it is having the courage to search where the light isn’t.

 

Ponder

In this section, I invite you to think about a question I may pose or a thought I may share.

If you stepped into the basement of your life for a moment, what would you find waiting there?

 

Oenophilia

“Oenophilia simply refers to enjoying wine, often by laymen.”

Black Elephant Vintners is a spirited boutique winery in Franschhoek that feels very much like a passion project rather than a corporate wine brand.

This month’s pour is the Black Elephant Vintners MCC.  It’s one of my favourite bubbles in South Africa.  It's a lively, celebratory sparkling wine that feels both polished and playful. It’s made in the traditional method, which gives it that fine, persistent bubble.

With notes of fresh citrus and green apples, it will pair well with smoked salmon or goat's cheese. 

I chose a bubble this month as a reminder that not every good bottle needs a grand occasion. Sometimes, a thoughtful conversation and something delicious on your plate are reason enough.

 

 

Stay curious,

Elke Zeki