STOCK-PICK­ING

Finweek English Edition - - COMPANIES & INVESTMENTS -

All funds, in my opin­ion, should have con­stant ex­po­sure to this area of the mar­ket to reap the ben­e­fits of this com­pound­ing ef­fect of ex­cess alpha over time. How­ever, this is a stock picker’s area of the mar­ket and your port­fo­lio man­ager must be well ex­pe­ri­enced in un­der­stand­ing di­verse busi­ness mod­els and di­verse busi­ness driv­ers. Imag­ine the po­ten­tial re­turns of call­ing some of th­ese shares cor­rectly and go­ing along for the

Capitec Bank Hold­ings There is a host of rea­sons, but sim­plis­ti­cally many of th­ese com­pa­nies are in the nat­u­ral growth phase of their busi­ness cy­cle. It is per­fectly un­der­stand­able that they will grow earn­ings faster than the over­all mar­ket in this growth phase, and this ex­tra earn­ings growth should drive share prices. Ac­cord­ing to Neil Churchill and Vir­ginia Lewis of the Har­vard Busi­ness Re­view, there are f ive stages of small busi­ness growth:

STAGE 1:

In this stage it is all about prod­uct ca­pa­bilit y and sell­ing to cus­tomers, and

Mr Price Group

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