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A little experiment to see who is really worth their salt

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SOL - Oil is rising & will still be here over the next 5 yrs despite the greenies protests; SFN - Solid high yielding bank not as cumbersome or over bought as the big ones; ALT - Technology stocks in an african market place of 900 million consumers, all cellphone operators need their services; GND - still a long term favourite due to solid ahead of the curve infrastructure investments to open Africa to the world; BIL - best diversified low risk commodity play out there; APN - generic drugs will be in greater demand in the developing world & they have good contracts; PIK or SHP - Retailers in africa diversified risks. PPC - solid conservative high divdends good position for the new infrastructure wave or housing boom - Not sure how tro allocate funds but try to spread it around, I guess - OMHO
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Super Contributor
Some good and interesting advice here. The greatest challenge however would be not to loose/maintain your 20% that is earmarked for TRADING.
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Frequent Contributor
I would invest R350K in Grindrod (nearly zero competition & lots of growth opportunities).R100K in Pioneer Foods , R100K in Pick & Pay, R100K in Shoprite -(everyone needs food / great defensive stocks and most people cannot afford shopping at the Woolworths of the world etc). R75K in JSE (no competition),R75K in Grand West (lots of potential growth gowing forward & people love having fun). The R200K balance i would use in my active trading account buying & selling AngloPlatinum (I love the volatility in this share and its a Great Company). Cheers
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Super Contributor
If you like gold, i would say GLD (Gold ETF) is the best way to own it, risk of it being stolen is not there, easy to sell, etc...
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Super Contributor
I really love GND, its one of my largest positions, they the only listed shipping company on the JSE, but they have a bit competition from guys like Mersk, MSC, etc that are from Europe... But they offer excellent value and have very good management, just patience is required, perfect long term investment...
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Regular Contributor
Hey CPS interesting post, but what sort of returning are you looking for? Anyone can suggest shares but I would think that share picks are dependant on the return and risk you want.
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Super Contributor
I cannot give a list of shares, i think it depends on risk profile (as mentioned above) as well as time horison. I only invest for long term, by making use of my 'secret' valuation model that basically identifies companies that offer good value and future earnings, this valuation indicates what the balance should be, e.g. its based on value not number of positions, e.g. the higher value the larger the % would be for the position. I am a huge believer in buying with a large margin of safety, this reduces risk of market fluctuations and gets me into some excellent companies at very good prices. GND is one that i can say i really like and qualifies currently.
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Jim, thanks for the question. Good insight as well. I guess after all said and done I need to beat the marketlink and unit trust investment options. I am not wanting to shoot the lights out but if I get a really great share and it performs well (maybe SOL & SHP etc) they should do better than average over a 5 year period. The risk has to be minimum thus longer term for growth. Div will be a nice added benefit (but I dont calculate that into a investment as it is not predicatable or guaranteed) and then if I look at a broker account, ie. OST I need to cover the monthly/annual fee if I decide to not do anything for a year or two other than look at the share portfolio every so often....
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Super Contributor
The premium is for the artwork and the rarity of the piece. There are collection sets, and some pieces to complete the sets are produced in lower quantities and become extremely collectable to those wanting to complete their sets. I had a collection of Mandella's and one of the pieces I purchased at R8500 and was offered R81000 for it.
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Super Contributor
3 basic points.. first it seems from conversations I have been having..people are finding it difficult to find good places to put their money at the moment. second.. share picking assumes in essence 2 things ..value or momentum.. As value is somthing that is uncovered with intense research and can sometimes only be unlocked over a long time 5 years has its questions and Momnetum can not be predicted it is something that is eaither present currently or not.In which case one has to derive a means of identifying it and moving were ever and when ever it can be found... but "picking momentum or value is a fools game.
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Super Contributor
John, very true... Value i think can be seen as the longer term approach and momentum as a slightly shorter term, not that its short term, but one might have to switch investments earlier than that of the value portfolio/selection. Momentum could cost more over time in broker fees though, but gains could be quicker. I think momentum could have higher risks... maybe one should split such a portfolio depending on your risk profile between value and momentum stocks.
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Super Contributor
I think in both cases the "way" you measure the value and the risk also impact on the risk..
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Super Contributor
true, i see many value funds have shares that i wouldnt buy, but some that are really good... So in the end it all depends on the strategy... most investors are lazy though, leading to taking an approach that is not fundamentally orientated because that takes too mcuh time, which is actually sad, because there is so much opportunity with reduced risk if done properly... I created a valuation model (its very specific and not many shares qualify - but thats better for me, i only want a very few excellent companies) i just feed certain data into and it filters the shares for me, then i look at the ones that offer value only (got SBK, RMH last year using it) and doesnt take that long to get the data (thanks to OST and/or annual reports).
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Super Contributor
I want to put you in touch with a school mate who is a huge Buffet fan but also runs risk IT at Morgan Stanley London.. I have invited him on to TickerTalk but tells me he is very very busy at present so we will have to wait.
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Now this I believe has become possibly the best post for the 1Q2010. It has opened the investors to look at diffrent options, and Like John and Werner have rightly illustarted, does the "modern" market allow you to buy and hold for the long term?

"Buffet style" I think might apply to maybe the top 3% of the JSE and it would be interesting to know if anyone here has or can say in the last 5, 10, 15 & 20 years (every period is important for longer term portfolio knowledge) has the top 3% (maybe that is only 3 or 5 companies) of blue chips changed at all in terms of the companies and/or sectors they represent in these years.

This is where the stratergy of regulary reviewing a portfolio might be crutial.

Then if you are going to change the makeup every say 3 years would you accurately factor in things like brokerage, taxes, CGT etc to keep the position profitable?
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Super Contributor
Awesome. i am always keen to meet new friends! thanks...
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Super Contributor
I think regular reviewing of ones positions is very important, i like to think of my strategy as value, but review each year in december/january and make adjustments, i check if the companies still fall under the same criteria as when i bought them, ok, some do well, e.g. APN, CPI, they are now very high, i dont sell them bacause the reasons i bought them are still present, strong management, excellent business and room for growth. but other shares i sold out because i think they not so good anymore, or i think the risk of uncertainty increased and i could do better elsewhere, i sold DAW for a investment in BlackBerry maker Research in motion a while back. So yes, one must review ones portfolio, if one doesnt you could loose out better value opportunities, sometimes one would like to reduce positions that did well if you think it hasnt enough room for growth, but some companies, like that 3% you might only want to add to, because they excellent - i find it easier to find really value companies in USA than here in SA though...
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Super Contributor
CPS... SA is blessed with a number of companies that fit the buy and leave concept SAB, SOL, BATS, Richmont ... but ... the single and only really important feature of the stockmarket over any other asset class.. is it acurate pricing and liquidity but most NB is the very very low cost of transfer...gold,art,property,etc all have very high turnover cost..it seems to me that tax isues aside..because thats a moral issue in my mind beyond this debates scope...to not look to use it to your adavantage would be simply stupid.
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