Who is Steven
Bacher? Steven Bacher (known as Stevie B) comes with 15 years of experience as a JSE stockbroker, and many years as a radio presenter and business editor, firstly at Talk Radio 702 and more recently KayaFM. Steven presents Kaya Biz every weekday and the show is now the largest business show on radio in South Africa.
He is equally well known as an MC for conferences, gala dinners and special events, and an after-dinner guest speaker.
Steven’s portfolio of equity investments
“Though my experience as a stockbroker with Frankel Pollack tends me towards an equity portfolio, I attain a degree of diversification through an Allan Gray balanced fund and some cash.
I do not believe anyone should have more than six stocks in his portfolio – if you want more you should go for a Satrix fund. My six stocks are split fairly evenly at about 18% each, consisting of: Woolworths, Famous Brands, SABMiller, Pick n Pay and Old Mutual, with the final sixth split among three Satrix funds, Alsi, Rafi and Divi.”
How did you select these companies and what do you look for as an investor?
My philosophy is twofold: eventually good companies become good shares (to quote Warren Buffet); and I follow exceptional leaders and entrepreneurs. The former principle does have exceptions – Blue Label and Nando’s are good companies that were not good stocks – though I find the principle still holds generally true.
The latter principle is unequivocal, to my regret: I would have invested in Discovery (Adrian Gore), Bidvest (Brian Joffe) and Capitec (Jannie Mouton) had I the foresight.
Among the stocks I’m invested in, Famous Brands is the best performer, and I would have put all my capital into it if I could. It also has great leadership. Woolies has not had a bad year, and Satrix has also been a great investment, one I got into early in 2006.
However, Old Mutual has been my biggest disappointment, hampered by its holding in Nedbank and its overseas investments. It would have been better had I purchased any of the other banking stocks, particularly Capitec which has returned 1 100% in five years.
Even now, if I get the right price I may swap Old Mutual for Discovery, that is a great company and a great share. I would have preferred Shoprite to Pick ‘n Pay, but believe the latter has overcome its problems and turned the corner.
Although I do not take a sector approach to investing, one sector I avoid is Mining and Resources. I’m bullish on gold and platinum, but not on our South African mining companies with all their labour and political challenges.
I am especially apprehensive that we live in an economy that is not booming, yet have a market that is going through the roof with no apparent concern for the economic fundamentals.
My selection process is a bottom up one that combines a gut feel derived from years of trading and ability to read balance sheets, with a close study of technical analysis. I am also in the fortunate position as a broadcast journalist to periodically meet formally and socially with top CEOs, thereby gaining the necessary insight and gut feel regarding companies I invest in.
My worst ever investment was a rather foolish purchase of two Porsches in 2007, which immediately lost a third of their value when the recession hit in 2008. I learnt a lesson that exotic cars are not an investment asset but a liability.
What returns have you had to date?
I haven’t called any of the big winners of the past five years, though my return is a respectable 20% a year over that time, a figure that excludes dividends which I do not count in my return on investment. My objective in investing is to generate a return at least 10% above the rate of inflation.