Freddie Achom on Blockchain
The Entrepreneur to the stars, Freddie Achom, is a popular black Englishman who has built a following in the world of finance and e-commerce. As the CEO of Rosemount Group, he has built a fortune in his many businesses and investments alike.
But every true leader doesn’t follow the pack when it comes to investment and capital growth. Blockchain is seen as the modern go-to for investors with cryptocurrencies, seemly, popping up everywhere.
Whilst Freddie has a keen interest in blockchain and cryptocurrencies, he does not base his investment portfolio on this medium. Clearly, he sees it as an opportunity but it’s not the get rich quick idea that so many believe it is in the modern day.
Freddie’s company, Rosemount Group, is a private equity company in England but operates globally. He has a philosophy of using others money to set up businesses and stop using his own. This is all about risk minimisation.
As the CEO of the company, and heavily involved in many other ventures, Achom maintains a low profile when discussing the idea of blockchain because he does not see it as a long term profitable investment that will return positive income over an extended period.
To understand the reluctance to support blockchain investment we must first understand how Freddie Alchom has made such a success over his almost 20 year career as an Entrepreneur. He holds one key philosophy about money. He believes that the modern world has stopped the idea of saving until you can afford it and moved towards using others money to invest in business and create success and income.
A generation ago people would work hard for years to start up a business. They may borrow a little from a bank, but generally they saved then they opened their dream business. A long term and rather safe way to create your own dreams but it took years, even decades, to get to the point of being responsible for your own future in a business.
With several changes over the past generation, the idea of investment and savings have changed. No longer are banks in favour when we talk about business investment. Todays world uses private equity to start new ventures.
Private Equity is, essentially, the money that was once in low interest savings accounts. Nowadays, private equity companies and individuals have expectations of solid and constant returns for their investment. Gone are the days of getting 3 or 4% in a back savings account. And this forms the basis of Freddie Alchom’s reluctance to weigh in heavily with the blockchain idea.
Feddie often notes that the Blockchain sector comes with enormous risk. Blockchain was developed from an idea with no actual investment. It is a way of trading that holds its value on the desire of its user to adopt the idea over the traditional Government and country based forms of trading, such as money.
Blockchain followers see the Government control over currencies as an imposition because, at the end of the day, the government of a country controls the value of that money and not the market. Cryptocurrencies get around this idea by allowing the users to control the value through demand.
The risk, as Freddie noted, is that there is no real control over the volatility of the value of the currencies. We saw that in the past year with the enormous gains in the value of Bitcoin, then the, almost overnight, 25% reduction in the value of the currency. Not a good long-term structure for venture capital investors.
Additionally, his company Rosemount investments has a strategy of investment in such sectors as, Consumer Brands, Leisure & Entertainment, Food & Beverage, Technology, Alternative Investments, Property Development & Sales, Business Services & Products, Renewable Energy and Financial Services. All as seen as solid growth industries over the next decade. Clearly blockchain investment does not fit the companies’ methodology.
Rosemount’s methodology is to invest in companies and investments that will expand with their investment and return earnings over the longer period. This may not be a bricks and mortar approach to investment but it’s not that much different because it is all about minimal risk in investment and a very high success rate based on their business plan. Blockchain, certainly, does not sit in this methodology.
One great challenge for investors in blockchain is that there is such a large variation in the opinions of the 5 year and 10 year movement of blockchain. And this comes with some logic. Some investors like to talk up the value of blockchain investment to stimulate the interest of uneducated investors. Others are more honest and see, because of the obvious limitation to the currencies, the high risk and poor outcome expectations of the future of the currencies.
“It really is an unknown quantity” said one investor recently when talking about the 25% reduction in the value of Bitcoin. And he is right because it just takes one Government, like the USA or Germany, to make some legislation changes and the whole blockchain movement may change almost overnight. To date no government has seen a way of placing controls, and taxes, on the movement but there is always that future risk that someone will find a way to do it and change the future of the whole blockchain movement.
I suppose it is all summed up in an interview with Feddie recently in England. He notes that “ Mum and Dad investors, a generation ago, put all their money in the bank and were happy to get 3 or 4 percent interest, but today more people are taking their money away from banks and are investing in solid investments. However, the expectation is now to get 7 or 8 percent interest on their investment. They are becoming more interested in creating wealth”.
Feddie Alchom agrees that blockchain investment is not for the mum and dad investors because there is a high risk of losing much, or all, of your investment. Whilst 7 or 8 percent is a reasonable expectation in todays financial world, it should be done in reputable investments with a solid history and capital to support the investment. Bitcoin could be just a fad or a phase but who really knows where it will go.