Be patient, I’ll tell you in a minute after I build up the suspense and drag this post out longer than the Grammy awards shows.
Anyway, 2014 is behind us, the second year of the competition and the first in which you could sell shares. This obviously meant that there was a little wiggle room for people to break the system. To stop this, initially all shares trading less than 16 times a day, and with a value of at least one rand. That kind of worked, but one smart guy realised that it was possible to make huge profits by using live prices on a trading account to get that 15 minute advantage over everyone else. Fortunately he was honest about it, and allowed us to reset his account. It also created a lot of work for me to put the prices in pending mode now, so that if someone does use live pricing, he’ll have his advantage removed 15 minutes later when the prices update themselves.
So let’s check up on how the market did last year…
JSE performance in 2014
It’s pretty easy to see that progress was relatively good until September when we had a decent correction. As per usual, there was panic, and a lot of people, including a few I work with sold shares at what was probably the best buying opportunity of the year. Happily I wasn’t one of them, and even managed to scrape together some more money to add to my holdings. In the end, the JSE ended up gaining about 6.8% through the year.
In the ETF realm, the Satrix 40 (Top 40) index which most news sites quote was only up 5.85%, actually losing money to inflation if you don’t include the dividends. Being very full of mining shares in an unfriendly mining environment probably had a lot to do with that. The ETF I tend to put the largest chunk of my holdings in did a fair amount better at 14.7%, and paid out around 1.4% more in dividends. The top ETFs did far better, in third spot was the Stanlib SA property ETF at 20.2% with a great 5.2% dividend yield (note this dividend is income, so it’s taxed differently to regular dividends). Second went to the DBX US market tracker doing 24% and another 0.4% in dividend yield, but the top ETF was the Satrix Fini doing a fantastic 24.8% with a healthy 2.6% in dividends.
So where did people spend there money last year?
1) Naspers R20,159,895.23
2) Telkom R17,210,903.77
3) African Bank R12,286,705.97
4) Coronation fund managers R9,888,808.62
5) SAB Miller R8,645,732.88
A few of those were real winners, Telkom went up 143.2% last year! Coronation fund managers was up 38.6% and paid dividends of over 4%. Naspers also had a very good year, being the first JSE share to climb to over R1000 a share, and ending 37.3% up for the year.
Ellies, 2011 to 2014
And after those winners we also need to congratulate the biggest losers. And boy were they big! In the runners up spot for the biggest loser was everyone’s favourite DSTV remote supplier, Ellies. What a company. If you’d have bought for around two rand in 2012 you could have sold for ten rand 18 months later. And hopefully you did sell (like a lot of the directors seemed to be doing) because another 18 months later the share is only worth around one rand fifty. Looking at the chart below you’d believe it was a plot of Lions head! The scary thing is a lot of speculators on different forums were talking of buying them once they reached seven rand, as they were so likely to rocket back up. Punters on this forum backed the share to the cost of R5.64m making it the 11th most invested share for the year. The total loss for the year was a healthy 76%. All the statistics for JSE shares can be found here if you’re interested.
But there can only be one champion loser this year. A company so bad it almost displaces our No. 1 Mampara of the year for his title, well not quite, but it was a share very heavily backed by participants. You know who I’m talking about, yes it’s African Bank. Our wise participants spent a big R12.28 million rand on this share, with it being the third most invested share in the challenge. A scary thought indeed considering that they lost pretty all of their value going from R12.12 a share down to R0.31 a share before trading was stopped, and from what I could figure out, the investors won’t even get those cents back in any shape or form in the future. Even more scary is the fact that for a very long time this share was trading in the upper thirty rand a share range. If you were one of the few invested in this share don’t feel too bad, even experienced fund managers, you know, the guys we pay far too much money to manage our money including the those from Investec, Coronation, ABSA, Liberty and the Government pension fund all had your money invested and now partially lost thanks to African Bank.
African Sank
And now for the moment we’ve all been waiting for, queue drum roll, it’s time to reveal the winners. Here are the top fives:
Traders (anyone who has sold a share for profit)
5) simms
4) MfanakhitiInvestment
3) letlhogonolo
2) Chadb
Interestingly, Chadb actually made a loss on his trading overall, but had the foresight to hold a large chunk of Telkom bringing him decently back into profit.
1) Imran
Yes that guru for the year is Imran. Even though he had a late start to the competition joining in May, he had an outstanding year. For someone who claims to have only been following the market for around a year he sure is a fast learner. Admittedly some of the small cap trades may not have been exactly possible in the real world with those sums of cash, it still took a lot of focus and attention to understand the moves and to profit from them. Amazingly Imran made R1.49m in profit and would have been on 124.4% profit had the 30% profit taxes not dragged him down to a still extremely impressive 99.94%. Well done Imran for winning both the trading section and the overall competition!
Investors
5) fonoi
4) Marco
3) chrissimms
2) Ombre
Something unusual about Ombre was that he made a loss when he sold Adaptit holdings, but put the remaining funds from that transaction into a profit making share to increase his profits.
1) The Investor
And our investor of the year is, suitably, The Investor. In common with all but Marco in the top five, The Investor predicted Telkom to be the share to hold for 2014, and just kept putting his faith into that company. As I mentioned earlier, Telkom’s total growth for the year was over 140%! Of course gaining 140% would only have been possible if you had the full R1.2m available in January rather than monthly as in this contest, The Investor still managed an extremely respectable 48.69%. To put that into perspective, the best unit trust fund only managed around 23% for the last year. Another plus point for The Investor is that this performance was something that would have been possible in the real world. Well done The Investor, now please tell us how you identified this as the share of the year, and give us a clue what’s going to be the share for next year 🙂
That’s all from me, please invite your friends, colleagues and other people who deserve an ass kicking to join the contest in 2015.
All the best for the year,
Patrick