Choosing the winners and the losers

One of the most important strategies in investing, is getting the investing cycles right. To see if you are one of the few people who can do this, take the above chart of the year-to-date price and performance figures of the top 41 companies in South Africa and make your prediction on how this picture will look in one year from now, i.e. on 30th August 2020.

There are a few noticeable points of interest about this chart:

  • The difference between the best and worst performer is 135%. So if you invested R1000 in AngloGold you have almost doubled your money and in SAPPI you have ¬†almost halved your money.
  • There are only nine shares with returns of 10% plus, and fifteen with worse than -10%.
  • Only ten shares have outperformed cash.
  • The top performers have been mining companies and companies earning most of their income outside South Africa.

So, if you believe mining and international earners will still be the winners in twelve months’ time, invest you money in the top two lines of the chart. If you believe South African companies have touched rock bottom and some of the multi-nationals like Aspen and Sasol have been unfairly punished, invest in the bottom five rows. We will see how things have panned out twelve months from now.

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