Finweek English Edition - - COVER STORY -

like No­var­tis, BMW, LVMH, To­tal and Royal Dutch Shell. I also think Amer­ica will stage a strong come­back driven by its in­vest­ment in nat­u­ral gas and tech­nol­ogy. Cheap en­ergy (nat­u­ral gas) will sup­port re-shoring – bring­ing back man­u­fac­tur­ing from off­shore. Re­mem­ber wages in the US have re­mained static while ris­ing in na­tions like China – so the cost gap is nar­row­ing.

But how does this shape our in­vest­ment strat­egy and what can we buy on the JSE to meet th­ese trends? I have to go with our heavy­weights – I think they will con­tinue to dom­i­nate in­vest­ment re­turns for a long time.

Big brands that will get big­ger – SAB­Miller, Richemont and Bri­tish Amer­i­can To­bacco – as the de­vel­op­ing na­tions get richer they will smoke, booze and want to buy the most ex­pen­sive watches they can lay their hands on.

I think Aspen will knock the lights out as well – spread­ing into South Amer- ica and Asia Pa­cific – but I don’t think the brand will last 10 years – it will be bought out by Glax­oSmithK­line – so I’m leav­ing it off. I’m also con­cerned about Bid­vest – in 10 years’ time Joffe will be 75. I’m a great fol­lower and sup­porter of his. He has a su­perb man­age­ment team but I still think he is the glue that keeps ev­ery­thing to­gether. Don’t get me wrong, he still has a lot of fight in him but we’re talk­ing 2023! While we’re spec­u­lat­ing, I think Sho­prite is best placed to grow into Africa, but once more I think re­tail­ers rely heav­ily on the qual­ity of man­age­ment and with­out Whitey (he’s al­ready get­ting twitchy) I have to pass on this one.

So my last two stocks are Sa­sol and BHP Bil­li­ton. I think Sa­sol will be a win­ner in the US, well placed to take ad­van­tage of the growth in the nat­u­ral gas fields as well as pro­vid­ing the chem­i­cal feed­stock for a num­ber of man­u­fac­tur­ing op­er­a­tions that will emerge from the avail­abil­ity of cheap en­ergy.

Last, I will go with BHP Bil­li­ton – I’m be­gin­ning to ques­tion whether we’re really in a su­per-cy­cle but even if we’re not, the com­pany has good as­sets (cop­per, iron ore, coal and oil) at the low end of the cost curve and I think it’s best placed out of all the min­ers to score from on­go­ing to de­mand for re­sources – it will con­tinue.

And to f in­ally end… re­mem­ber the golden rule – buy high, sell higher.

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