Performance September 2012 & Comments
Again, September has been a surpisingly strong month against the Benchmark. The Benchmarl (50% Eurostoxx, 30% Dax and 20% MDAX) gained +1.3% resulting in a YTD perfromacne of 18.2%. The portfolio returned however +3.3% in September, resulting in a YTD performance of 28.7% or 10% better than the benchmark.
Full performance overview:
| 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% |
| Aug 12 | 6,428 | 119.48 | 3.2% | 6.5% | 3.3% |
| Sep 12 | 6,510 | 123.48 | 1.3% | 3.3% | 2.1% |
| YTD 12 | 6,510 | 123.48 | 18.2% | 28.7% | 10.5% |
| Since inception | 6,510 | 123.48 | 1.8% | 23.5% | 21.7% |
Top performers in September were Total Produce, SIAS, Buzzi and KAS Bank, although most of the positions were positive.
There were no big changes to the portfolio apart from the two new shorts (Prada, Focus Media) and the 1% Rhoen Position. Piquadro has been completely sold down. As discussed https://valueandopportunity.com/2012/06/18/cranswick-plc-isin-gb0002318888-business-model-and-valuation/#comment-3106, Cranswick has been “upgraded” to a full position.
Portfolio as of Sep. 30th 2012:
| Name | Weight | Perf. Incl. Div |
|---|---|---|
| Hornbach Baumarkt | 4.6% | 2.6% |
| Fortum OYJ | 3.4% | -23.8% |
| AS Creation Tapeten | 3.9% | 9.5% |
| BUZZI UNICEM SPA-RSP | 4.9% | -2.4% |
| EVN | 2.7% | -5.5% |
| WMF VZ | 3.9% | 51.2% |
| Tonnellerie Frere Paris | 5.1% | 27.0% |
| Vetropack | 4.8% | -3.1% |
| Total Produce | 5.5% | 28.1% |
| OMV AG | 2.1% | -6.2% |
| SIAS | 6.0% | 35.8% |
| Installux | 2.9% | 1.4% |
| Poujoulat | 0.7% | 10.2% |
| Dart Group | 2.5% | 12.6% |
| Cranswick | 5.2% | -0.4% |
| April SA | 3.3% | 15.3% |
| Mapfre | 0.7% | 44.2% |
| KAS Bank NV | 5.2% | 12.6% |
| Drägerwerk Genüsse D | 9.7% | 94.0% |
| IVG Wandler | 2.1% | 13.4% |
| DEPFA LT2 2015 | 2.9% | 39.2% |
| HT1 Funding | 4.4% | 21.1% |
| EMAK SPA | 5.0% | 26.3% |
| Rhoen Klinikum | 1.0% | 4.0% |
| Short: Kabel Deutschland | -2.2% | -52.2% |
| Short: Focus Media Group | -1.0% | 2.4% |
| Short: Prada | -1.0% | 1.7% |
| Short Ishares FTSE MIB | -2.3% | -3.0% |
| Terminverkauf CHF EUR | 0.2% | 5.1% |
| Tagesgeldkonto 2% | 13.9% | |
| Summe | 100.0% | |
| Value | 67.4% | |
| Opportunity | 25.1% | |
| Short | -6.3% | |
| Cash | 13.9% | |
| 100.0% |
Comments:
The portfolio now has a certain “tilt” towards the Euro crisis. Although the direct percentage of PIIGS is only around 18%, a couple of the other positions (HT1, IVG, April) do show correlation with the developement in the Eurozone.
I do not have a problem with this as I think all those stocks are cheap based on “bottom of the cycle” valuations. As indicated in my “boss Score” posts, I will prioritize to a certain extent French stocks going forward, as I find them exceptionally cheap as well.
Regarding the macro picture, I have nothing new to add. BRIC’s look relatively weak if you look through the hype and the US is not doing that well either. So I find no reason to go “hunting” for value outside Europe for the time being.
Cash is with 13.9% still comfortably high, I could add one position and still maintain my minimum threshold of 10%.
All in all I try to prepare myself for some months of underperformance as the current status seems to be “too good to be true”. Past experience however shows that such “hated rallys” have really long legs and it usually doesn’t pay to time the market.
value and opportunity 
this is a result I would like to congatulate you to. Especially on a risk-adjusted basis it’s impressive!
thanks mate ! However, after good times there will always be bad times…..everything is cyclical.
Sorry if you felt “slightly” insulted. As the commonly used Eurostoxx 50 index does not include the dividends and you did not specify that you are using the perfomance index, I just wanted to check…
no hard feelings 😉
Interestingly it was (is ?) quite common to use a price index in many of the fance “cerificates”…..with that, banks could skim an easy 3-4% p.a. from the “investors” on top of the other fees.
I would appreciate if you could give your view on your opportunity positions. I am very heavy long in equities (90%) since the start of the year and want to diversify into bonds.
The performance of equities was very good and I am not that comfortable with valuation of equities any more. In the past I have mainly invested in bunds to diversify, but I have sold all of my positions, as I view the valuation of bunds as ridiculous for private investors.
Hi MArtin,
if you search the blog, you will find a lot of posts about my opportunity positions.
Howver, I would never sell stocks if I feel thath the general market is overvalued. I would always concentrate on my specific stocks. If they are cheap, then don’t sell.
If you really see overvalued stocks, the best diversification would be a short.
MMI
thanks, mmi. I will think more about it. Of course I think my equities are not overvalued.
Although some shares in my old capital-gain-tax exempt portfolio may be (e.g. Nestle). There I have the problem to weigh potential higher return of newly bought stocks against holding capitalgaintax-free stocks. I have run some simulations but it is difficult to decide.
What do you use to measure the risk of your portfolio? My beta against the dax was 0.8.
beta is only one factor, I also look at vloatility to a certain extent.
However, I am most concerned with fundamentals. So if a company does well fundamentally, I am not concerned too much with volatility.
Do you use the Eurostoxx performance index (dividends included)? The Eurostoxx 50 pays very high dividends. If you include your dividends in your performance, just for the sake of fairness the benchmark should include them, too.
I have to admit that I feel slightly insulted by this comment. Why should I cheat myself by using a price index ?