Maybe look at different ways of valuing shares - Simon wrote a good post earlier today on cheap shares - have a look at the Tickertalk post. Have a think about some fundamentals that fit into your investment plan, then try to value whether the share is a cheap (here we go again)or not and buy at the right time. The other option is to buy into SATRIX - as I understand it a relatively cheap option - little thinking required. In terms of long term, my plan is to try to buy shares that I will keep forever, ultimately leaving a legacy for my children (if I ever have any), that will pay me a decent dividend yield in my retirement....or something like that. Beer and wine may dicate slight adjustments.
Well start with Beer, wine and Tobacco move on to Mining. Then food retailers ..then banking, private hospitals and fast food chains...basically put your investment where others put their spending money!.
well that may be true if you into a value play but banks are facing some serrious head winds....only part that iterest me at the moment is bank insurence business or stock broking... stuff that is not liked to credit! My least vavourite is ABSA..way to much card and homeloan risk for my taste, and you know I can take a risk.
Banks are the center of the economy - correct, they face headwinds, but are a vital part and as a result getting some really cheap banks over the last few years made me very happy - Pharmaceuticals is very solid, stable and required, the more people come on earth, the more virus' spread and evolve, these firms will always be trying to prolong human life and the costs involved are high, but people pay them... I have Aspen Pharma and Merck & Co (NYSE). I love Grindrod (haha i guess some guys are laughing at me now?) but this one will do very well when the next economic upswing comes about - shipping is another core to global trade, hence economic progress, but many of these companies are not very stable and solid, GND is well managed. What they say when looking for long term investments, try to find the companies that people cannot live without - they say fresh water will be a huge problem in the future! i dont know if there is anything listed on the JSE related to water though (i dont think so) - I also like electricity utilities (again none here) these print money like AT&T in USA.
My point Werner is that although thing you cant live without will always beat inflation they will also never have exeptional profits (like a miner) so perhaps one should look toward where people chose to spend their cash first...Drugs, alchol,sex, gambling...if it works for exsise tax and govenment it works for me!
I think one needs to structure ones portfolio in such a way to have characteristics of solid well established (cant live without) businesses and some growth ones - for example GND, it is not a very large business, but has some very well managed businesses and can create exceptional profits - CPI, is a bank with brilliant business model, something exceptional! things like BTI are very solid, but surely dont deliver those 'exceptional' gains either? What do they say - listing your company on the stock market is one of the biggest wealth creators ever - thats what one needs to do, get an idea, build it and sell a portion of it, thats where the real money lies!
Another thought - sorry guys - i get too many ideas like this - this is not so easy, i know a guy that is good at this though, one must find out which industries are going through a radical change, something that will revolutionise the industry, put pressure on all the market participants to change or adopt a new technology, etc, once you find the firms that have these abilities you must invest like anything in them and be patient... that is the key ingredient in almost all major success stories from Google, Apple, Microsoft, WallMart, the dotcom guys make millions/billions by changing the way we operate today... Only thing is that this approach is a bit risky, so its important to have a diversified portfolio containing those solid businesses that arnt about to change.
Why does everybody ignore property? What is wrong with buying into a good dividend strategy? I read about ABSA's new fund "Diluculo Fund" - low cost housing for low income people. We have a country full of low income people and it is growing year by year. Does it then not make sense to get into this early? Just as you need food to eat, you need a place to stay unless you intend sleeping under a bridge when the world economy has another hickup. For most of the people in SA. a house is like a funeral. Everybody contributes as long as everybody can get a place to stay, be it 10 or 20 people per house.