Performance August 2012 & comments
August was the second best month for the portfolio so far with a performance of +6.5% against +3.2% for the Benchmark (30% Dax, 20% MDAX. 50% Eurostoxx). YTD that means an incredible 24.5% for the portfolio against 16.7% for the Benchmark.
The August performance was driven mainly by the move in my largest position Draegerwerk Genußscheine, which alone has accounted for almost 3% of portfolio performance. Among the others, April and EMAK as well as Tonnellerie were outperformers.
Again, this was a very exceptional month. I did not and do not foresee such a performance of the portfolio. Those months should be considered as “outliers” especially in a month where overall markets performed so well and having on average 20% cash for most of August.
|Bench||Portfolio||Perf BM||Perf. Portf.||Portf-BM|
– The DJE real estate fund was finally sold, all in all a -3% loss including the special payments
– Piquadro has been sold down to ~0.2% and will (hopefully) disappear next month
– Dragerwerke was reduced by -1% to 10% portfolio weight
– as discussed, I managed to increase Hornbach, Total Produce and Vertropack close to 5%
– Mapfre: however only a small position due to bad timing (wish I had bought more)
– KAS Bank: 3.4% at month end, target full position (5%)
– Installux and Poujoulat: Smaller position were bought within the month (Installux: target full position, Poujoulat half position)
Cash is now at 17% and will be reduced to around 15% when the KAS position is filled.
Portfolio as of 31.08.2012:
|Name||Weight||Perf. Incl. Div|
|AS Creation Tapeten||3.9%||4.89%|
|BUZZI UNICEM SPA-RSP||4.6%||-11.66%|
|Tonnellerie Frere Paris||5.1%||23.35%|
|KAS Bank NV||3.4%||0.49%|
|Drägerwerk Genüsse D||10.0%||94.05%|
|DEPFA LT2 2015||2.8%||30.24%|
|Short: Kabel Deutschland||-2.2%||-30.51%|
|Short Ishares FTSE MIB||-2.3%||-2.35%|
|Terminverkauf CHF EUR||0.2%||4.38%|
2012 so far is a very good example why market timing in my opinion is a fool’s game. The economic situation and outlook is bad in most parts of the world and stocks in aggregate are not really cheap. Nevertheless the stock market finishes one positive month after the other.
I think especially 2012 shows nicely how momentum and institutional money management work. The year started with a surprising upmove in the markets. Many funds managers who were negative on the market were down against their benchmarks from the beginning and had to catch up. Even the best hedge funds (apart from Baupost maybe) had to throw in their towel at some point in time and get back into stocks if they underperform the indices. I think this reaction explains a lot of this years stock market developement.
For me it is a clear sign that market timing or “tactical asset allocation” does not add a lot of value for the “ordinary” investor. Looking for and investing in undervalued securities regardless of the status of Mr. Market’s manic depressive mood is the better way to achieve long term investment success.