BizNews Share portfolio – a sparkling start to 2021 as Xero joins the basket

Launched in December 2014, the BizNews Share portfolio has delivered excellent returns for SA investors. The strategy has been to buy and hold, but the portfolio has seen some adjustments since being created. Currently, two thirds of the assets are invested in US exponential growth stocks, while the rest is in carefully selected JSE-listings. In the latest update, BizNews founder Alec Hogg announced the addition of Xero – a tech company based in New Zealand – in the portfolio. Listen below for the full BizNews Share portfolio update. – Jarryd Neves.Alec Hogg on Xero:.___STEADY_PAYWALL___.What we've done here in the portfolio, is used the benefits that we have as a business at BizNews. Understanding the exponential reality of the digital era or the digital companies, hence the investments in Amazon and Apple etc. But we've also targeted companies that you might never have heard of, because we've been using the products in our business. We have seen the benefits of their products being world leaders in their areas, in the way that they allow you to scale your business more, if you're a digital business.Xero is one of these products. We've been using Xero as our accounting system pretty much since we started BizNews seven/eight years ago. I was actually talking to one of the bookkeepers who used to work for us at Moneyweb, where we had four people in the bookkeeping team.You think of the costs that entails versus Xero, where you paid roughly a couple of hundred rand a month as a subscription fee. It's another one of those digital companies that attracted my attention because I've used the product a lot. My goodness, it's a phenomenal product. If you haven't used it before, just try it. Remember, we have a business in the UK and a business here in South Africa, and it's easy enough to integrate them both on the Xero platform. So [a] very high quality offering that they have. But what I like about this business is that it has done what many of the successful investments, for us, have done as well when they breakthrough into profitability..On the BizNews Share Portfolio performance:.It broke through R11 million a couple of weeks ago and it's now sitting at R11.3m, and that's from a starting point of R2.2m in 2014. Amazon has been our superstar, but also up there [is] Microsoft – who would have thought – has done phenomenally well. Apple is number two in the portfolio. Microsoft's done extremely well. We've done very nicely out of Netflix and the South African stock, Discovery. But one that, looking back, we would have loved to have bought more of is CloudFlare, up 240%. That's just in less than a year. Spotify – also in less than a year – up 125%. But I'm especially pleased now, by 2U, which had been one of the negative performers – it was in the red and it's now, in US dollars, up 12%, so it's starting to catch fire. We had a good month. In Rand, up 7.5%. 5% in US dollars. The compound growth now is 30% over the last six years. .On Netflix:.Netflix came out last week and I was particularly happy with what I saw in Netflix, and so should you be. The share price reacted very positively. If put on, I think it was 18% at one point. But the financials are really, really strong. The most recent spike that went up there was as a consequence of the financial results. Why? Well, that's part of the picture that the quarterly revenues continues to grow. Interesting thing here about Netflix is that they did have a price increase and some people were worrying that [it] would affect the Netflix growth proportion. The subscriber growth in the first quarter of 2020 – remember that was going into the pandemic – particularly in the United States, the concern that people had [was] that have nothing to do when they were sitting at home gave Netflix a really good boost. Their subscriber growth in that quarter was phenomenal. Then as things started calming down, there were concerns that in [the] third quarter [of] 2020 Netflix might even be going x growth. We had a lot of other streaming players coming into the market. Reed Hastings said at the time – and the Netflix share price actually went down a little on those figures [in] the third quarter – that only two million new subscribers in that quarter were added net. So they didn't go backwards, but they only added two million. He said, but we're not competing with other streaming services. We're competing with free to air television.Then came the fourth quarter results which were, again, excellent numbers. The third highest quarter ever [and] the fourth highest quarter ever in growth. More than eight million new subscribers added..On Naspers:.The second star performer in January was Naspers. Look at that surge in the Naspers share price. You might remember that two months ago I was saying, I don't know with Donald Trump attacking the Chinese stocks – would that affect Naspers? The share price, from the middle of the year, seemed to be declining. But then we decided not to do anything about it, because when you consider the discount that Naspers was trading at, just at Tencent shares, it was like a 60% discount. It was just a no brainer. You had to have it in your portfolio. It would be really dumb to sell it. What's happened now is that discount is narrowing [but] only slightly. The Trump dump – as we call the Americans by putting Trump out of office – all of the risk of American shareholders or American investors not being able to invest in Tencent, which is the company that Naspers owns 31% in – through it and Prosus. That was eliminated. But the second thing was, Naspers has been investing $5bn – between Naspers and Prosus – in buying back shares. So we have a share buyback and the relief rally from the Trump dump. And here we go. Naspers is way into a new record high territory. So [we're] very happy that we stuck with it..Read also: .Alec Hogg: Key issues for Tuesday's portfolio updateAlec Hogg: 52 trillion reasons to stay heavily invested in our share portfolioA peek inside turbo-charged BizNews share portfolio – and some good news about Eskom

BizNews Share portfolio – a sparkling start to 2021 as Xero joins the basket

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