South Africa’s favourite stockbroker, David Shapiro of Sasfin, came to the Biznews.com studio today to talk about stock market booms and his favourite shares. Â The result as always, was entertaining and insightful. In the short video below, South Africa’s favourite stockbroker explains why he is excited about prospects for share prices this year. His logic is unimpeachable – a collapsed oil price will feed trillions of dollars into the pockets of people around the world, lifting global economies and company profits. The longer, in-depth audio interview has been transcribed for your convenience and follows below the video. You can listen to the audio by clicking on the link to Soundcloud.com below the transcript. – AHÂ
[youtube http://www.youtube.com/watch?v=I9sSaxraNHw]
ALEC HOGG:  In this Undictated Special Podcast, David Shapiro is with us in the studio. Well Dave, 2015 is just around the corner.  You have some pretty strong views that it could be a good year for shares on the JSE.
DAVID SHAPIRO:  I think so and I think itâs the oil price thatâs going to be the big driver of consumerism – globally. We may only feel it a little later in the year but I think that markets have reacted to the falling oil price from a production point of view and is very worried about producers. But we havenât seen the benefit that itâs going to bring to consumersâ wallets and to companies as well. Itâs a big factor of production, and so I think that will filter through in the rest of the year and give global markets a huge boost. I say that because if we look at who the big oil importing nations are; itâs China, its India, itâs Europe – the whole of Europe – and certainly, even America, Japan, as well.
ALEC HOGG: But people seem to be focusing on other things for the moment – Europe and Grexit, as they call it now, the possible Greek exit from the EU. Is it because they havenât really done their homework yet on the impact of the lower oil price?
DAVID SHAPIRO: I think so. I think that whether Greece goes or not, weâre automatically assuming that the Syrzia party is actually going to win the Greek election and theyâre going to opt for an exit. Thatâs not right. Firstly, weâre not sure whether they will win it and secondly, if they do win it, it doesnât mean that theyâre going to go out. Also, their view is that Angela Merkel will actually not welcome it, but wonât oppose it so I think thereâve been knee-jerk reactions to Europe.
ALEC HOGG:Â Do you remember what Charlie Munger said about Greece at the Berkshire Hathaway AGM?
DAVID SHAPIRO:Â Repeat.
ALEC HOGG:Â âIt reminds you of your brother-in-law whoâs in the family business, but he prefers to spend his day in the country club with the companyâs credit cardâ.
DAVID SHAPIRO: You know whatâs ironic is that Greece was actually starting to look better. Their economy was improving. It was going in the right direction. Maybe thatâs too strong a way to describe it, but it was moving in the right direction. Bond yields there were coming down. People were feeling more sanguine about Europe and all of a sudden, itâs raised issues about Italy, France, Portugal, and Spain. I think there are enough good companies in Europe that are export-orientated. What we havenât factored in, in the companies themselves, is that the Euro has fallen dramatically, which means that a lot of companies like BMW, Daimler, LVMH the luxury goods company and the pharmaceutical companies are now producing at significantly lower levels so that becomes a big theme for European companies.
ALEC HOGG: So investing-wise, you donât really have to worry too much about Greece. This stock market boom, though â and we have spoken about it before, the surges in 1987. 1997, 2007âŚÂ Do we have to wait for 2017 to see that again?
DAVID SHAPIRO: Remember with those boomsâŚyou started to see the early stages a long time before. I think thatâs what weâre going to start see now is the early stages of a major boom. Again, itâs coming from the consumersâ side.
ALEC HOGG:Â How much do share prices go up in a major boom like that?
DAVID SHAPIRO: We talk dramatic: 30/40/50 percent. Who knows? I think this is the one leg that weâre still missing from the turnaround that we saw in 2009.
ALEC HOGG:Â So the smart money….
DAVID SHAPIRO: We havenât seen themâŚÂ The smart money will start to get out later on , but you have to go for the ride. This will be the blow-off of the boom that started in 2009.
ALEC HOGG:Â Is the smart money still getting into the market?
DAVID SHAPIRO: Itâs been in for a long time. Itâs the other money that hasnât come in, that comes in, and that gives it this kind of boost.
ALEC HOGG: So itâs almost like the dumb money comes in late, pushes it to the stratosphere and thenâŚ
DAVID SHAPIRO: The sceptics â the cynics whoâve been worried about things like inflation, American debt and all those things that we heard around 2010/2011. Suddenly, you turn around and say âthings are not that bad, particularly in the U.S.â, so Iâm quite positive on the global economy. South Africa remains another issue. We have electricity issues here. We have structural issues here. If you looked at the matric results, I think those are all worrying factors but it doesnât mean that the boom will pass us by.
ALEC HOGG:Â Because our companies are exposed to what happens in the rest of the world?
DAVID SHAPIRO: Dead right. We have wonderful companies here on the JSE â seriously, big, good companies. If you look at Tencent and Naspers which I think as we talk now, is trading at an all-time high. Why? Because Tencent is starting a bank, so you have those kinds of companies. Aspen, British American Tobacco, SAB, and BidvestâŚyou have a whole host of companies that I think, will benefit from the global turnaround.
ALEC HOGG:Â So whatâs your pick for 2015, if there was one pick you could make?
DAVID SHAPIRO: On the local market, itâs hard to say. Iâm still going – and youâre going to kill me for this – with Naspers. I donât think weâve seenâŚÂ I think Chinese Internet companies are going to run…
ALEC HOGG: I like Naspers. Remember, last year I said to you after Davos  â in fact, two years ago â I said this is a company that the rest of the world knows and there arenât too many South African companies that are held in such high esteem as Naspers is globally. So I would go with you, Dave.
DAVID SHAPIRO: Donât be scared of it. Alibaba is another one that I would take offshore. I think we havenât built in China as an economy and some of the Chinese companies â I canât pronounce the name of the Smartphone that they produce (Xiaomi). Itâs huge. Theyâve doubled their sales. I wish I knew it, but youâll pick it up.
ALEC HOGG: Weâll pick it up and weâll put it onto the transcript. That was David Shapiro from Sasfin.
[soundcloud url=”https://api.soundcloud.com/tracks/184736698″]
