SEVEN FOR 11
Our gang of rough-riding investment writers put their stocks on the blocks
In terms of returns, 2010 will not be a year that stands out for investors – which is not that surprising after the easy money was made in 2009 after the markets recovered strongly from the calamitous 2008 financial meltdown.
But 2010 will be memorable for the Finweek stockpicking team because it is one of the few years that we’ve managed to beat the market (the All Share Index, if you will).
Collectively, Finweek managed a rather nifty 18% return against the 16% growth shown in the ALSI over the year. We also beat a couple of the well-regarded equity-based unit trusts – although we’d be the first to admit that there’s a huge difference in picking stocks for an annual competition and selecting stocks to grow (or preserve) clients’ money.
I think what stood the Finweek team in good stead last year is that the general consensus was that growth on the JSE would be more pedestrian in 2010, and that value stock selection would be critical.
Many of us chose shares with reliable cash flows, generous dividend policies, strong brands and well-tested management.
Joan Muller, our property queen, was our top performer – breaking the 30% return mark (after returning a slender 0,14% in 2009). I can’t recall property ever coming out tops in our annual stock selection contest – but the development obviously says something about the local equity market in the past year.
But we had a very poor showing from our (admittedly higher risk) commodity stock selection, and our penchant for Liberty International (now split into CCO and CSO) was also a bit of a drag.
Looking ahead, Finweek’s portfolios for 2011 certainly don’t suggest an abundance of adventurous spirit – if for a moment we look past Marc Ashton’s truly left-field selections (which I think I can put down to this irrepressible writer’s eccentricities and not fundamentals invisible to ordinary investors).
Significantly, I count half a dozen stocks (Remgro, Zeder, Basil Read, Capital Shopping Centres, Hyprop and Resilient) that have been retained by writers for another year. A case of better the devil you know?
If there is a pattern to be discerned from the 2011 stock selections then I might venture to say Finweek is looking for growth from the consumer. We have holdings in Mr Price, Richemont, Hyprop (it owns the Canal Walk shopping centre), BAT, Lewis, Tiger Brands, Transpaco, Adcock Ingram and Spur Corporation.
For all the talk about gold, we have only selected two gold counters for 2011.
Still, there are the less obvious punts like engineering group Raubex, Telkom, Amecor, Evraz Highveld Steel and Vanadium and EOH. Hopefully these ‘outsiders’ make some strong running…