During 2023, two Slovenian blue chips outperformed SBITOP, two matched the index, while the remaining five companies underperformed the index, at least in terms of the number of days. Today we bring you a detailed overview of why this happened, but also why looking at this data by itself does not tell the entire picture.
2023 turned out to be a solid year for the SBITOP index overall, with an overall increase of 19.8% during the year. Of all the constituents, seven recorded solid growth, one remained roughly unchanged, while one recorded a decrease.
Price performance of SBITOP and its constituents in 2023 (%)
Source: LJSE, InterCapital Research
Leading the way in this regard was NLB at 36%, followed by Luka Koper at 30%, Telekom Slovenije at 28%, Sava Re, at 25%, and Krka, at 20%. On the other hand, Cinkarna Celje declined by 11%, while Triglav remained roughly unchanged.
How much did individual constituents outperform/underperform compared to the index (2023, p.p.)
Source: LJSE, InterCapital Research
As compared to the index, NLB outperformed it by 16.4 p.p., followed by Luka Koper at 10.4 p.p., Telekom Slovenije at 8.4 p.p., and Sava Re at 5.2 p.p. On the other hand, Cinkarna Celje, Triglav, and Equinox underperformed the index, by 30.7 p.p., 19.2 p.p., and 14.8 p.p., respectively. In total, 2023 recorded 249 trading days in 2023. Of all the SBITOP constituents, two outperformed the index, two matched it, while five underperformed the index, at least in terms of the working days.
How often did SBITOP constituents outperform the index in 2023 (% of working days)
Source: LJSE, InterCapital Research
Of these companies, NLB outperformed the index 52% of the days, followed by Telekom Slovenije at 51%, while Cinkarna Celje and Krka matched it 50% of the time. On the flip side, Equinox outperformed the index on only 46% of the working days, while Luka Koper and Triglav outperformed in on 47% of the working days.
What can be taken away from this? Two things. Firstly, day-to-day trading, as much as we would like to time it, is quite hard for many different reasons. Of course, a situation might occur when an investor scores a win, but one also has to take into account the higher inherent costs of buying and selling constantly. Secondly, a day always comes when a certain share performs extremely well. While it might happen that an investor times this correctly, without any prior knowledge (which of course, is generally unavailable publicly, or if available, wouldn’t mean much), investing for longer period in a stable portfolio will generally yield a lot more stable result. After all, a 20% return (and this is not including the dividends!), turns out a lot better than trying to time the market, both for the sake of time and for the sake of higher costs associated with this action. Not to mention, if a certain share loses a lot of its price due to some development, the risk is diversified far more when investing into an entire portfolio, than an individual stock.
