That sinking feeling (not)
THE “DOWNER” PORTFOLIO comprises Finweek ’s selections of stocks we feel are likely – for a variety of reasons – to take a tumble in the year ahead. This year – and it was bound to happen some time – the downer portfolio actually holds our best performing stock: Capitec (+112%). I remember discussing the inclusion of Capitec in the downer portfolio with a colleague (who shall remain anonymous) at year-end 2009. We both felt the share had run too hard, too fast. Say no more… The other big surprise was Lonrho plc, the pan-African conglomerate. The share was up 50%. SABMiller was thankfully only somewhat frothy (up 10%).
But the downer portfolio (much to our relief) took a pasting, thanks to the massive retreats in the share prices of WG Wearne (down 55%) and cash shell Cenmag (down 50%). Still, the downer portfolio returned 13,4% – which is unacceptably modest. Consequently, for 2011 we’re going back to basics with some no-nonsense selections.