Where to park it? Themes are the thing to get super results

We've worked out that what moves share prices is the unexpected, not the expected, so in Part Nine Of How To Manage An SMSF For Newbies we're trying to predict what's going to happen in the next year that no one expects: surprises.

When you look back at the best and worst-performing stocks in your SMSF at the end of this year, there will be some surprises. Generally you'll fluke these rather than predict them. Exploration success, takeovers, bankruptcies. For now, as a newbie, this is not what you're trying to predict, it's too hard and, as anyone can tell you, jumping at tips and takeovers is a road to nowhere. Only one in 10 come off and you are left holding the rest.

As one seasoned stockbroker once told me: "If I'd never been told any inside information in my life I'd be a million dollars better off."

So let's try something less stressful. Picking themes. This is where that cocktail and swimming pool come in handy. Picking themes requires you to be a touch visionary in your thinking. Let me give you an example of what is involved.

We used to have a client who had "vision". He was an Australian living in Asia who saw Australia somewhat more objectively than the rest of us. In 2004 to 2007 he made a fortune. Stocks he bought were getting taken over, had better than expected results, landed contracts. He was always ahead of the game. In the end everyone was hanging on his every move thinking that he must have some sort of inside feed.

But there was no magic. All he had done, from his position as the "Man in the Moon" looking at Australia from Asia, was to realise a year after it got going that China's infrastructure build would need a lot more Australian iron ore and coal. So he simply trawled the Australian market for the highest-quality coal and iron ore stocks and bought them. That's all. The theme came first, the stock selection was secondary. All the other stuff that happened, the takeovers, the better than expected results, the success, were simply a function of being in the right sector playing the right theme. They were the bonus.

Good things happen in good sectors. Get the themes right, the stocks will pick themselves and the the rest will follow. So what themes are developing in the sharemarket at the moment?

Inside information. I often think when it comes to working out which sections of industry and the economy are succeeding a lot of people don't realise they have their own inside information. So this one is up to you. What industry do you work in, who do you know that is thriving, what business are they in? It's all out there in plain sight if you bother to look and ask.

What do you know? Ask yourself. Ask around. Keep your eyes open. Read. You'll be amazed what you know that the stockmarket doesn't.

Superannuation. My sector. I work in a superannuation-exposed industry. Today there is $1.6 trillion in superannuation assets. With the super guarantee on its way to 12 per cent, the superannuation pool will double by 2020 and quintuple by 2030, legislated growth, more if the market goes up. Any business exposed to the superannuation industry has a natural growth driver.

We have already seen the beginnings of the consolidation with three players putting in competing bids for financial services company Trust Co. Anyone would think it's the 1980s. The whole wealth management world and the superannuation services sector have a great future ahead of them and the bids for Trust Co are just the beginning of the industry players positioning for it.

Data centres. Things are already changing in the IT world, but it has only just begun. At the moment most large to medium-sized businesses have their own IT networks stuffed full of servers and staffed by dolphins (we know they're intelligent but we can't communicate with them). In 10 years' time all that will be gone and all our networks will be housed in custom-built data centres, properly backed up, serviced, uninterrupted, protected, secure, temperature controlled; and we will be paying for the services and applications by the hour. Telstra will be the biggest player as long as the Yanks don't take over. But there are others.

Having fun yet? More themes next week.