Billionaire Tomorrow
Creating waves and changing tides
His ambition was born on the crest of a 15-foot roaring wave off the coast of Cape Town looking far into a blue-sky future. Like the towering wave, that ambition crashed – leaving entrepreneur Charles Savage swimming for trickier waters of taking the markets to the people.
Thirty years ago, a young, bronzed, athletic surfer rode towering waves on the shore of the mother city, Cape Town.
Charles Savage, aged 12, rode high on dreams a professional surfer. The freedom of the ocean; the surge of adrenalin on the peaks of the waves; the democracy of the sea; it was an intoxicating dream. This dream may have died in his teenage years, but a fresh one flowed in on another tide; on another night on an African shore.
The idea of making money by guiding people through the market came also came to the crash of waves. This time it was on the golden shores of Mozambique, 2500 kilometers north east of Cape Town.
It was a hot night of conversation and ice-cold beer.
Around the dinner table, Savage and family debated a thunderous topic. Why is Mr. Savage the only person investing?
“We feel intimidated!”
“Scared to ask questions because we will seem stupid”
“We are not invited to the party.”
Those words opened the mind and an opportunity for Savage. Create a platform, he thought, taking away the difficulty of investing. Create a platform making it easy to buy equities.
The next party Savage hosted was for investors. The chat had turned into an opportunity that threw up an idea, that turned into a startup, that won the MTN Business App of the year award for 2020.
Technology is a relative newcomer in the long history of share trading that began back in 1611. That is when the world’s first stock market opened in Amsterdam as the Dutch East India Company sought capital to expand its fleet by trading shares.
For centuries, retail investors had to go into a store or bank to buy shares at a high cost. Just 20 years ago this was how Savage traded in his student days at the University of Cape Town.
“Back then we didn’t have smartphones, we needed to use the newspapers to track share prices.”
This was the method the students used. Call a stockbroker to place an order to buy a share, it would take 7 days to clear. If the share price increased within 7 days, Savage could call the stockbroker to cancel the purchase of shares and all that was remaining was the sweet taste of profit.
What could go wrong?
“We made some profits on the first couple of trades before paying significant school fees!”
The school fees paid dividends and Savage made his career in financial services. First as CEO of Global Trader, which evolved into CEO of the Purple Group which ultimately lead to the CEO and Founder of Easy Equities.
Most importantly, these early experiences lit a beacon that would guide a life of leading people through the stock market.
“Democratizing investing for all!”
“If you doubt your idea, it is wrong. You will know in your gut if it's right.”“Have you ever spoken to someone who says they don’t want to own shares? Everyone wants to own shares.”
Savage believes by combining the internet, fast news flow, and low fees can open the way to financial freedom. The stats bear out his ambition; he claims average age of retail investors in South Africa was 55; on the Easy Equities platform, it is 31.
“Have you ever spoken to someone who says they don’t want to own shares? Everyone wants to own shares.”
Maybe so, maybe most individuals seek to own shares, but how does a company built on low costs company generate 12.4-million-rand worth of profit in 2020 the year of COVID-19?
“When we began, we focused on the customer, not on the income statement.”
A customer-focused firm is naturally prone to ride waves of success, however, a platform earning R96 million in revenue does not run itself.
“It is all about scale,” says Savage. He admits the platform is designed to profit from the economies of scale.
“We are not the cheapest, but we provide excellent quality.”
Easy Equities aims to undercut the traditional financial institutions and provide better service.
When COVID-19 hit, the rush to online helped the business. South African lockdowns resulted in an EasyEquities mini- boom.
“Business tripled in a month, from 12 000 new clients to 60 000 new clients!”
In the teeth of the COVID-19 pandemic came another name to disrupt the business – GameStop.
The share price rose from $ 5to 500$ back to 50$ in a couple of weeks because of RobinHood and Reddit traders.
The ‘Reddit Rebellion’ caused mayhem around the globe. This forced the hand of RobinHood to halt trading and lead to an inquiry, Lawmakers questioned the Robinhood CEO, Citadel CEO, Reddit CEO, and an investor named Roaring Kitty.
EasyEquities was not unscathed, halting trading of Nokia shares.
Savage finds it difficult to quantify how GameStop’s market valuation vs book valuation strayed. A bubble, as explained by the textbooks. Naturally, these events create concern, not only for the platform but for EasyEquities investors. Individual Robinhood traders are said to have lost $50 000 during the GameStop saga, according to the Wall Street Journal.
“We are focused on investing not trading,” says Savage.
However, Savage must cater to all customer demands. As such the introduction of live pricing, followed by the future introduction of leveraging and the ability to buy shares in Europe adding to the current portfolio of South African, Australian, and American shares. A sophisticated platform to invest in real estate called Easy Properties, allowing individuals to buy segments of larger properties. Lastly, the ability to buy shares via the Capitec app and partnerships with Sanlam, Bidvest, and Satrix.
These partnerships are part of the greater goal to reach 2.5 million customers in the future.
“The real magic will be 30 years from now”
A last word from the surfer turned entrepreneur in the financial markets?
“If you doubt your idea, it is wrong. You will know in your gut if it’s right.”
You could argue that playing the markets needs guts right now.
