Our gang of rough-rid­ing in­vest­ment writ­ers put their stocks on the blocks

Finweek English Edition - - FRONT PAGE - MARC HASEN­FUSS

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…

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