2015 – My stock portfolio view

This time last year, I blogged about my view on the upcoming year in the markets, and which shares I’d be holding to try and keep up with the Jones’. My sentiment at the time was that the US would return to growth and that the South African economy would come under pressure. Although the Rand didn’t give up as much as I’d expected, the US economy certainly carried on gaining momentum.

The results of my portfolio, at time of writing excluding dividends, is a 21% growth in ZAR terms, relative to the S&P500 gaining 18% and the JSE Top40 gaining 13,5% – also, both in Rand terms. My star performers were Coronation, Naspers and Visa, with Netflix and Sasol dragging their heels. I had also thought Google would gain further that the 10% it did – but it seemed a year of sowing for the search giant. Below is the detail, including the 2013 distribution in value.

2015 – well, what could happen in the coming year? Starting at home, Eskom blackouts and postal, metal and mine worker strikes will likely be back again next year – the lower end of the market finds itself in a high relative inflation environment with short term unsecured debts to pay, without much further option in terms of payday financing. The reality of South Africa’s move away from its reliance on resource exports towards uncompetitive services as well as inefficiencies in government will subdue returns for listed companies operating in SA. Growth into Africa will only provide significant contributions to earnings closer to 2020.

Europe and Russia will tick along with very little excitement. The Middle East will battle to come to terms with the “new oil normal”.  The US, on the other hand, is where I feel the action will happen. Interest rates will rise towards the end of the year, increasing demand for the dollar, strengthening the currency. Technology, healthcare and industry sectors will deliver great returns, likely into the low double digits.

My portfolio picks for 2015 focus on companies that are looking into the future and bringing solutions to market that address the challenges the middle of the bell curve aren’t entirely aware of as yet – or have discounted their solutions too much today. Let’s call it the “Futurist Portfolio” dedicated to the visionaries and implementors, including:

  • Novo Nordisk – creating diabetes medication and delivery devices for the millions of overweight people about to be diagnosed with type II diabetes
  • Airbus – building the fleets that will carry the world’s travellers in efficient aircraft
  • Apple – sitting on $155bn in cash – has options in terms of payments solutions or possible acquisitions to further monopolise the smartphone services industry. They could easily buy Morgan Stanley, PayPal and Tesla, with change to spare.
  • Alibaba – The behemoth Chinese online goods store, will put the capital it raised at IPO into growth and be keen to win investor sentiment through return
  • Tesla – Although American fuel is now more than 30% cheaper than it was last year, the future of driving and the opportunity for market share penetration as the current price discount is good.
  • Google (who owns some interesting possibilities in Uber, Glass, and robotics firm Boston Dynamics) will explore wallet and cloud services and rise with the move towards online retail
  • Naspers will continue to grow through it’s portfolio of e-commerce holdings and benefit from the rising tide of emerging market technology adoption. I’ll hold shares in USD, though.

If I could, I’d buy shares in the leaders who run these incredible businesses – in the way I discussed listing oneself on the stock market a while ago. Seeing that I cant, here’s my preferred weighting of these companies to hold for 2015. Let’s see how they do!

Trackback URL

POST A COMMENT

Subscribe to Comments