Stock Picking Competition And Predictions For 2023

After last year’s dismal picks, yielding -25.77%, I’ve decided not to bother doing the competition in future. While it’s just a bit of fun, it’s not very fun for me because it’s completely random. Why is it random? Well, December is not a time of year that I do research into stocks because the values are all skewed due to the Santa Rally effect. In addition to the lack of research (making my picks just guesses), the skewing affect of the Santa Rally makes picks a bit random anyway, because it’s impossible to know what effect market sentiment will have on stocks after the erratic rally.

Finally, picking stocks at a specific time of year means that it’s not possible to emulate the way I invest because there’s no way to pick the stocks as buying opportunities appear. Consequently, I don’t feel invested in my picks and so I find myself saying each year, my stock picks rarely represent my personal stock portfolio throughout the year.

Predictions For 2023

I will, however, take a punt at predicting how the year will go. This is something that I do constantly throughout the year, which is necessary for investing. While I update my ideas throughout the year, it’s worth having a guess at where things will go so I can plan out my investments throughout the year as time goes by. So here goes, a cursory punt at predicting what may pass in 2023:

  • The property market will continue to decline. I won’t predict how much because the official reports are not aligned with my own perceptions and measurements, so there’s no way to measure the success of such a prediction in an unbiased way. Also, I don’t have enough data to make an accurate prediction on this anyway.
    The fundamental reason for me to think that the property market will worsen is that I believe that inflation will persist, which will lead the RBNZ to continue to increase the OCR, which will increase mortgages and make it harder afford a house (therefore reducing demand)… Which brings me to my next predictions…
  • The OCR will increase to at least 5.5% by the end of the year. This will lead to fixed mortgage rates in excess of 7.5%.
  • Inflation will remain high, but headline inflation will be reported slightly lower. I have no way to work out how much and the concept of “headline inflation” is arbitrary anyway, but for fun, let’s have a guess and say that headline inflation will be 6.2%.
  • Given that the government is churning out policy at high rate, polls and popular opinion don’t seem to be in their favour, I imagine that the government will delay this year’s election as long as possible (unless something comes up that might lean towards their political favour). On that note, I suspect that the next government will be comprised of a National and ACT coalition. This has significant bearing for 2024, meaning that business will improve (in 2024) as immigration policies change improving employment options which will reduce business costs, RSA workers will be allowed in again so food prices will come down, many aspects of the local stock market will recover, etc… But let’s stick with the predictions for 2023 before we get into 2024… needless to say you can see which of the two year’s I’m most looking forward to.
  • Finally, implicitly, given the previous predictions, it should be obvious that I’m going to predict a bit of a recessionary environment throughout 2023, improving in 2024.
  • Jocularly, given how this year started for me, among my peers with whom we are also making predictions, I have also predicted that this year I will get a horrible disease!

Those are my predictions, let’s hope I’m wrong.


2022 Stock Picking Competition

In last year’s stock picking competition, my picks gained a mere 10.8%, mainly lacking due to my selection of Ryman Healthcare (not a stock in my personal portfolio) and Fisher Paykel Healthcare not gaining much (a stock held in my personal portfolio, but as a bond proxy). Not bad compared to the NZX 50 which was in the negative for the year and not bad compared to the brokers picks, only 2 of which beat me (Forsyth Barr and Jarden). I’m not pleased with my result overall, but I didn’t expect much as this time of year is a difficult one to buy stocks after the Santa Rally and there wasn’t a lot of thought that went into it due to the holiday.

Hopefully I’ll do better this year (though I don’t have high conviction for this statement). My picks for 2022 are:

  • MFT
  • FRE
  • HLG
  • SCL
  • TRA
  • Sixth pick: SKL

I have to say that it’s hard picking out some stocks that aren’t currently over-priced and also have potential tailwinds for the coming (highly unknown) year. As with last year, very little research has been done in preparation for these selections. I picked these selection based on inflation expectations, previous performance and in the case of SCL, orchard fruition coming in 2023 (in the hope they’ll re-announce this towards the end of year and get re-rated). 3/5 of the above picks are in my personal portfolio.

Disclaimer: These picks (or anything on this website) does not constitute financial advice and [as inferred in the article] very little research has gone into this selection of stocks for the purpose of this competition.


2021 Stock Picking Competition

Each year there is a stock picking competition, which I believe started on, and is now sponsored by NZ Herald (I may be wrong about that). The competition requires each participant to select 5 stocks at the start of the year and a backup stock in case one gets bought out. The winner is the participant who’s stock price (adding any dividend payments) has increased the most from the start of the year to the end of the year.

I find the competition quite difficult because of the time of year it starts. Typically I don’t do a lot of research over the Christmas break, and it’s often a time that is between company announcements, so it’s a bit of a guess where things are at, at that time of year. Also prices are a bit random due to the annual Santa Rally.

Nevertheless, here are my picks for the 2021 competition:

  • FPH
  • SUM
  • RYM
  • EBO
  • HLG (I was very tempted to pick ATM, but I don’t expect the Daigou Channel [Australia/China travel] to have recovered by the end of the year – ATM will likely be my pick for the following year)

Feel free to record your own picks in the comments at the bottom of this article, or head over to the website to enter officially (though I think it might be a bit late if you haven’t already entered – still, there’s no reason you can’t comment your picks below and join in the fun).

Addendum: These picks (or anything on this website) does not constitute financial advice and [as inferred in the article] very little research has gone into this selection of stocks for the purpose of this competition.