Financial Mail and Business Day

Cristal challengers leave JSE in the dust

DAVID SHAPIRO

At the close of business this evening, I will calculate the half-year winner of the Cristal Challenge, a competition I organised last December, in which I invited a few colleagues in the investment industry to choose five local shares they believed would deliver great riches to shareholders over the coming 12 months.

A few outsiders muscled their way into the battle on Twitter and at the interim stage also managed to elbow themselves onto the winners’ podium. The front-runner is the erudite Piet Viljoen, with MTN and Aveng buttressing his fivestock portfolio’s 56% gain.

Inspired choices of Jubilee, PPC and Sasol have placed longdistance runner Altus Badenhorst marginally behind Piet — up 53%. Pianist and fitness fanatic Betsie Schaap — up 52% — is still in with a chance buoyed by Renergen, Purple and PPC. In the first six months, 13 of the 15 participants have outperformed the JSE all share index’s 15% move by the proverbial mile.

Bright Khumalo and Simon Brown are both up about 40%, with me in sixth place at 35%. I selected five companies that have made top management changes: PPC, Woolworths, Invicta, EOH and Tongaat. My performance has been held back by EOH and Tongaat, which recovered strongly in 2020 but, lamentably, have failed to repeat 2020’s dazzling rally.

The motivation behind the game was to highlight the fun and financial rewards of creating an investment portfolio consisting of individual shares.

I always advise first-time investors who seek guidance on how to establish a share portfolio that instead of building a library of know-how books or filling the pockets of course promoters, nothing will accelerate their learning more than staking a portion of their savings in a few companies of their choice. There is an abundance of information available on company websites, while working through management presentations provides readers not only with knowledge of the enterprise but with an understanding of the industry and economic landscape.

Building wealth is a serious business, and you should dedicate as much time to your financial health as you do to your spiritual and physical wellbeing, even if you choose to abdicate your asset management to a third party. But be aware of the moral hazard. If things go wrong, at worst your adviser loses his or her reputation; you, on the other hand, lose your pension.

Hoping that a touch of diversity would conjure its magic in the quest for a bottle of Louis Roederer Cristal Brut Champagne, I created a phantom team that invested in five quality businesses run by female CEOs: Bidvest, Angloplats, Santam, JSE and Sygnia. No such luck. Up a paltry 8%, the portfolio was one of two that fell short of the all share index’s gain. The other was Herman Lloyd, who put his money on last year’s mining winners: Sibanye, DRD and AngloGold. The strong rand, though, proved a jinx, taking its toll on Greg Katzenellenbogen’s resource-focused selections too.

For Greg Davies, Nick Kunze, Deon Gouws, Melinda Smit and Mia Kruger the game still has six months to run and anything can happen in that time. Giulietta Talevi cursed when her Vukile crashed 28% early on, but since then the real estate investment trust has recovered dramatically and is now up 27%.

Looking back at individual stock performances on the JSE over the period, our contestants seemed to have nailed all the big movers: PPC, Distell, MTN, Tsogo and Sasol. Yet no-one selected the one bet that would have popped the champagne cork unopposed: ArcelorMittal. It is up a staggering 400%.

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2021-06-18T07:00:00.0000000Z

2021-06-18T07:00:00.0000000Z

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