Performence review April 2012 & comments
April 2012 was a relatively good month for the Portfolio. Against a Benchmark Performance in April of -2.6%, the portfolio showed a gain of +1.2%. YTD, the portfolio is now up 12.6%% against 11.9% of the Benchmark.
|Bench||Portfolio||Perf BM||Perf. Portf.||Portf-BM|
The outperformance in April was mostly triggered by the jump in the share price of AIRE KGaA, which went up from around 11 EUR to 17 EUR at month end. Luckily, I only sold a very small amount after the 10% tender offer from the company itself (~1000 stocks) before the AIG offer of EUR 17 was announced on Monday April 30th.
The relatively weak performance of my Italian positions (EMAK, Buzzi, Piquadro, SIAS) was partly off set by the gain in the FTSE MIB short position.
Other notable outperformers in April were WMF and AS Creation.
Portfolio Changes April:
Nestle: fully sold
Piquadro: 0.5% added at around 1.43 EUR (50% hedged with FTSE MIB short)
AIRE KGAA As discussed above, I sold 1.060 stocks at 13.52 EUR (25% of trading volume) before the announcement on Friday April 30th with a gain of 54.50%. On Friday April 30th, the volume was so high, that I sold 22.952 stocks (position down to 5%) at 17 EUR with a gain of 94.26%, almost a double.
Installux: Beginning on April 30th, the first 55 shares were bought. This will be a long way to establish a position…
Portfolio composition April 30th
|Name||Weight||Perf. Incl. Div|
|AS Creation Tapeten||4.0%||-4.02%|
|BUZZI UNICEM SPA-RSP||5.1%||-12.75%|
|Tonnellerie Frere Paris||4.9%||7.07%|
|Drägerwerk Genüsse D||8.9%||44.61%|
|DEPFA LT2 2015||3.1%||29.04%|
|DJE Real Estate||4.2%||-3.18%|
|Short: Kabel Deutschland||-2.2%||-23.07%|
|Short: Green Mountain||-1.6%||14.30%|
|Short Ishares FTSE MIB||-2.4%||3.74%|
|Terminverkauf CHF EUR||0.2%||4.43%|
Outlook & Strategy:
As a contrarian investor at heart, current times are quite exciting. There are a lot of industries and entire countries (PIIGS, utilities, financials) which trade at very cheap valuations. Of course there are a lot of macro risks on the horizon. As a value oriented contrarian investor one should howver focus on the long run. The “This time is different” argument should also be applied on the positive side, meaning that the world will not end, people will still need bank accounts, electricity or want to travel in the future.
So the focus should be less on guessing and interpreting daily Central Bank actions or election outcomes but on analyzing cheap companies with lasting business models, no matter where they are located.
Greed and fear are the two worst investment advisors available. Because of this, one should not fear investing in currently depressed businesses if they are deemed to be lasting, on the other hand one should try to avoid chasing expensive past “winners” like consumer stocks, flats in Munich etc.
However this is often easier said than done, especially if one takes the daily news “tsunami” too serious. My personal technique is to read a historical finance book from time to time in order to get the “right perspective” and that current problems are nothing new. At the moment I am reading “Lombard Street” from Walter Bagehot, I hope I can post a rview soon.