Performance review July 2012 & comments
Portfolio Performance in July 2012 was a positve +1.8%, resulting the YTD performance of 16.9%. The Benchmark performed signficantly better in August with +4.4%, resulting in an YTD performance of 13%.
| Bench | Portfolio | Perf BM | Perf. Portf. | Portf-BM | |
|---|---|---|---|---|---|
| 2010 | 6,394 | 100 | |||
| 2011 | 5,510 | 95.95 | -13.8% | -4.1% | 9.8% |
| Jan 12 | 5,972 | 99.27 | 8.4% | 3.5% | -4.9% |
| Feb 12 | 6,275 | 105.90 | 5.1% | 6.7% | 1.6% |
| Mrz 12 | 6,330 | 107.22 | 0.9% | 1.2% | 0.4% |
| Apr 12 | 6,168 | 108.02 | 0.8% | -2.6% | -3.3% |
| Mai 12 | 5,750 | 108.90 | -6.8% | 0.8% | 7.5% |
| Jun 12 | 5,969 | 110.17 | 3.8% | 1.2% | -2.6% |
| Jul 12 | 6,229 | 112.15 | 4.4% | 1.8% | -2.6% |
| YTD 12 | 6,229 | 112.15 | 13.0% | 16.9% | 3.8% |
| Since inception | 6,229 | 112.15 | -2.6% | 12.1% | 14.7% |
This underperformance in such a period is not a surprise, as currently the portfolio carries a 21% cash allocation and many “low beta” stocks which only react very slowly (if at all) to short term market movements. So the “Draghi” effetc which moved the markets was almost not present in the portfolio.
For fun, I added the beta of my stock positions relatively to the respective main country indices in the overview of the portfolio as of July 31st:
| Name | Weight | Perf. Incl. Div | Beta |
|---|---|---|---|
| Hornbach Baumarkt | 4.8% | 4.23% | 0.62 |
| Fortum OYJ | 3.6% | -27.25% | 0.77 |
| AS Creation Tapeten | 4.0% | 3.02% | 0.53 |
| BUZZI UNICEM SPA-RSP | 4.9% | -10.97% | 0.97 |
| EVN | 2.8% | -11.61% | 0.63 |
| WMF VZ | 4.0% | 43.76% | 0.60 |
| Tonnellerie Frere Paris | 5.1% | 15.25% | 0.39 |
| Vetropack | 4.5% | 1.16% | 0.85 |
| Total Produce | 4.2% | 5.43% | 0.45 |
| OMV AG | 2.2% | -11.45% | 0.94 |
| Piquadro | 1.3% | -2.25% | 0.63 |
| SIAS | 5.8% | 14.46% | 0.86 |
| Installux | 2.9% | -4.71% | 0.63 |
| Poujoulat | 0.7% | 3.41% | 0.70 |
| Dart Group | 2.8% | 13.42% | 0.71 |
| Cranswick | 2.7% | 9.43% | 0.59 |
| April SA | 3.2% | 3.05% | 0.76 |
| Drägerwerk Genüsse D | 8.6% | 46.40% | |
| IVG Wandler | 2.2% | 8.29% | |
| DEPFA LT2 2015 | 2.8% | 21.02% | |
| HT1 Funding | 4.2% | 7.03% | |
| EMAK SPA | 5.1% | 16.94% | 0.42 |
| DJE Real Estate | 0.6% | -2.72% | |
| Short: Kabel Deutschland | -2.2% | -28.24% | |
| Short: Kabel Deutschland | -2.2% | -28.24% | |
| Short Ishares FTSE MIB | -2.3% | 6.43% | |
| Terminverkauf CHF EUR | 0.2% | 4.42% | |
| Tagesgeldkonto 2% | 21.3% | ||
| Summe | 97.8% | ||
| Value | 50.1% | ||
| Opportunity | 21.3% | ||
| Short | -4.3% | ||
| Cash | 21.3% |
I am quite surprised that overall beta is so low, avarage weighted Beta of the stock portfolio is only 0.66. Interesting to see that my “low fundamental volatility” investment style translates into a “low market volatility” portfolio.
Portfolio activity:
As mentioned before, I sold the Praktiker bonds and accepted the AIRE KGaA buyout offer. I did not yet record the proposed cash top up from the buyer, which would add ~0.4% of portfolio performance. I will only record it when cash is in the bank account.
Other than that, I recorded coupon payments for HT1 and dividends for Poujoulat and Hornbach as well as a special payment for the remaining DJE Real estate fund units.
Ongoing “programs” are further small purchases of Installux and Poujoulat as well as sales of the DJE real estate fund. I hope the position will be gone by next month.
Market commentary:
The major event was of course the “Draghi Statement” which moved markets significantly higher after a relatively weak start in July. In my opinion, the main purpose of this statement was to avoid another “summer disaster” when “Club Med” is on holiday and evil hedge funds try to exploit the absence of the Club Med financial sector.
So far it has worked but of course it could be only a “dead cat bounce”. Fundamentally, if one ignores the sensationalist mainstream press, there seem to be encouraging signs especially in the Spanish economy. The excellent “IBEX salad” blog has just pointed out the new Export record for Spain achieved in May 2012. So beneath the real estate and banking mess, the industrial sector seems to improve. So maybe this was then really “just” a normal real estate bubble deflating and not the “greek illness”. So maybe Spain is more Irish then Greek then ?
It is interesting to see that almost all of the US “moMo” stocks seem to be faltering, most recently Chipotle and Starbucks. Unfortunately I did not have the courage to short them. However shorting only on valuation is a quite difficult business and in a “no growth” environment, “real growth” stocks are in very short supply.
Outlook:
After continuously extending my Boss database, I will try to analyse more “BOSS” stocks in the next few weeks. My target would be at least one company per week. Let’s see how that works out.
Market wise I do not have a strong opinion at the moment. Although sentiment is relatively negative, overall stock market levels are not really cheap like the were in 2003 or 2009. As I am not a fan of market timing anyway, I will continue to look for undervalued single stocks and invest without really caring too much about macro events, provided that the business model looks stable enough.
