Are there any views in the forum on investing in wildlife, specifically in buffalo, sable that sort of thing? There appear to be some high profile business and sport personalities who have. Is this a good diversification away from the stock market?
There are now thousands of game farms out there that were previously cattle ranches and the main reason for the switch has been cattle theft, and cost of labour. I have shares in a game farm and we run it like any other business, and like any other business it has it's problems, the main one being poaching. Those fancy figures that get thrown about that the odd farmer gets for an animal is definitely not the norm, its when Rupert bids on the same buffalo bull that Ramaphosa wants, that is when these fancy figures are broadcast. Rupert himself admitted, it was a c**p investment, that amount of money spent by him would be the same as if we had decided to spoil ourselves and buy a bottle of Lagavulin. It's definitely one of the playgrounds of those that have more cents than sense.
I have a client in the industry, my question to him was, who do you sell to ? They sell to other game farmers, so you go auction sell R x million game and buy R x million game. Price are recorded, but what really happened ? What happens when all the game farms have the same game ? It will all end in tears, but while the party is on, you must party.
I was hoping that someone else would tell the good news story. Let me try. I own a piece of land. Starting in 2006 I began to invest in game. To date for every 100k I invested I have sold animals and banked 280k and the remaining herds are now worth 1020k (hence the 10 bagger title) This is not for everyone, there are unique risks involved, but the secret to this investment is that the investment units copulate and reproduce. That gives a lot of fat to counteract any downturn. Are any of you toying with the idea of getting involved? The first auctions of the year are coming up this weekend. Observe. See whether you think the momentum is still there. I do.
Also bought in 2006, done ok, for every 100k invested 120k banked (gross) and value of remaining stock +/- 280k. Cost of capture expensive and that is what you have to value the game at, and not as if they are trophy animals.
There was this Father & son chatting on a country road & the son turned to the father & said " Dad lend me R 10 mill. to buy a Game Farm" The father said "son you see that little store down the road take this R 2.00 and buy a mirror & bring it back here". This the son dutifully did. When he arrived back the father said "now son take down your trousers and position the mirror under you backside". Again the son dutifully did as he was told. The father then said " son can you see your backside?" the son then said "yes Dad I can". And the moral of the story? It cost the son R 2.00 to see his backside and not R 10 mill. buying a game farm.
There are game farms and game farms. We developed ours from scratch and for a quick sale could ask at least 5 fold or initial investment, which equates to the investment compounding at roughly 23% pa. Not a NPN an APN, but better than most, but of course it does come with it's set of headaches.