8 stocks to buy in a shrinking economy
Professional investors differ on what might constitute a recession-proof share portfolio. The FM prefers companies with low or no gearing, reassuring cash flows and brands or services with compelling value and operational diversity
Picking shares that will weather an economic downturn is no easy task — especially when the very notion that there are "recession-proof stocks" on the JSE has been shattered. Back in the day, there were certain classes of shares that were regarded as recession proof or "defensive". If we look at the JSE it is certainly possible to insulate a portfolio against SA’s daunting economic challenges simply by considering the numerous global counters listed on the JSE. Think of heavyweights such as AB InBev, Richemont and British American Tobacco (BAT) to the mining giants like Glencore, BHP Billiton and Anglo American, through to homegrown global ventures like Naspers, Aspen or specialist counters like Trencor and Montauk, as well as a slew of global property companies. Finding shares that are largely rooted in SA and can withstand a prolonged economic downturn is a trickier proposition. Typically, recession-proof shares would incorporate companies involved in the "sin sectors" — booze, ci...