Performance November 2012 & Comments

November was a quite good month in the end for the market despite a short slump by the mid of the month. The Benchmark (50% Eurostoxx, 30% Dax, 20% MDAX) made 2.0% for the month against 1.4% for the portfolio. Again, this is something I would expect in a normal “up month”.

Best performer was clearly Dart Group with ~+33% in November and Total Produce with +9.3%, underperformers were mainly Kas Bank (-7.1%), Emak (-8%) and April (-7%).

YTD the portfolio is now up 32.4% against 23.5% for the BM.

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%
Okt 12 6,672 125.32 2.5% 1.5% -1.0%
Nov 12 6,804 127.04 2.0% 1.4% -0.6%
           
YTD 12 6,804 127 23.5% 32.4% 8.9%
           
Since inception 6,804 127.04 6.4% 27.0% 20.6%

The composition of the portfolio looks as follows:

Name Weight Perf. Incl. Div
Hornbach Baumarkt 4.5% 1.7%
AS Creation Tapeten 4.2% 20.9%
BUZZI UNICEM SPA-RSP 5.2% 6.5%
WMF VZ 3.6% 45.5%
Tonnellerie Frere Paris 4.8% 25.1%
Vetropack 4.6% -4.3%
Total Produce 5.8% 38.2%
SIAS 6.1% 43.5%
Installux 3.2% 3.9%
Poujoulat 1.0% -2.7%
Dart Group 3.6% 68.0%
Cranswick 5.0% -0.8%
April SA 3.1% 12.4%
Bouygues 2.7% -1.3%
KAS Bank NV 4.7% 4.8%
Gronlandsbanken 1.1% 5.2%
     
Drägerwerk Genüsse D 9.7% 99.3%
IVG Wandler 4.9% 8.7%
DEPFA LT2 2015 3.0% 49.1%
HT1 Funding 4.8% 35.6%
EMAK SPA 4.5% 17.1%
Rhoen Klinikum 2.5% 4.2%
     
Short: Focus Media Group -1.0% -0.4%
Short: Prada -1.1% -7.1%
     
Short Lyxor Cac40 -1.3% -4.3%
Short Ishares FTSE MIB -2.2% -4.9%
     
Terminverkauf CHF EUR 0.2% 4.8%
     
Tagesgeldkonto 2% 12.8%  
     
     
     
Value 62.1%  
Opportunity 29.5%  
Short+ Hedges -5.4%  
Cash 12.8%  
  98.9%

As discussed, I took a first 1% stake in Gronlandsbanken and slightly increased the Installux and Poujoulat positions under the usual rules.

Comment & Outlook

December is always the month for predictions for the next year. In my opinion, those predictions should be viewed as entertainment rather than a serious effort. No one knows what’s going to happen, so it’s best to stay prepared for any outcome.

However one thing I can predict with absolute certainty: The popular trailing 10 year average returns for stocks will dramatically increase. The arithmetic is relatively easy:

From the beginning of 2002 to the end of 2011, for instance the DAX earned a meager 1.35% annually. Much less than bonds. Next year however, the 10 year average will exclude 2002 but include 2011. 2002 was a very bad year (-44%), 2012 seems to be a quite good year (YTD +26.6%).

So this small statistical change results in a sudden jump to an annualised 10 year yield of 9.94% for the DAX !!! So all this talk of the “lost” decade for stocks suddenly will move into a “stocks performed great over the last decade”.

I don’t know what that means for the stock market (most likely nothing), but it shows that many of “common known truths” like “the lost decade for stocks” are in fact nonsense and/or (Bond) marketing slogans.

Edit: Starting next year I will switch to quarterly reviewss as the monthly review is somehow not so interesting for a longer term oriented portfolio.

7 comments

  • Im Augenblick scheint ja dein “Zocken” mir den ungeliebten Ländern und Branchen voll aufzugehen. Selbst Bouygues steigt ja inzwischen an 😀

    Die Frage ist halt, ob man mit so nem Depot im realen Leben auch gut schlafen könnte 😀

    • benny,

      die Antwort ist “Yes I can”. Die Frage ob “man” kann ist eine andere. Ich fühle mich deutlich wohler wenn ich weit weg von den “geliebten” Assets bin.

      Es gibt viele Strategien für den erfolg an der Börse, das Wichtigste ist, dass Strategie und Persönlichkeit des Investors zueinander passen.

      MMI

  • Gratulation zu der beindruckenden Performance! In diesem Jahr, wie oft in der Hausse, war es besonders schwierig, die Benchmark zu toppen.

  • “It is not my intention to promote bonds instead of stocks today – both won’t be good investments in my opinion.”

    How do you mean that? Do you think you will lose money with stocks or are there better alternatives (or both)?

  • Memyselfandi007,
    I could not disagree stronger with you – what rarely happens at all. But in this case, you see only what you want to see: Of course the 10 year record for stocks look great, that means if you bought at the right time, i.e. at the beginning of 2003. But if you bought a few years earlier, around the millennium, then you are still “under water” with your investment. What does that prove? First, We have more than a lost decade, it’s rather one and a half lost decades! Second, it matters when you entered the stock market! This is not an argument against, but for market timing.

    If you look at real returns – which is of interest for someone, who questioned himself whether to invest his money or to spend it -, or if you compare stocks to bonds, then you can go back many, many years in history, in which stocks returned zero or less, depending on the bond index.

    E.g. the german all-government-bond index REX had a better return in the last 15 years! I once calculated or read, that even in the last 30(!) years, bonds performed better than stocks (that was when the stock market was nearer to his lows). So it is pure nonsense to say that stocks are always the better choice.

    It is not my intention to promote bonds instead of stocks today – both won’t be good investments in my opinion.

    • well, what is more boring than total agreement ?

      The point i wanted to make is that any comparison of two asset classes over a couple of years contains a lot of randomness. E

      If we look at your Rex example: Yes, over 15 years the Rex outperfomred. However over 16 years, 17 years, 18 years, 19 years, 20 years, 21 years, 22 years, 23 years and 24 years the DAX outperformed the REX (and then Bloomberg stops).

      So sorry, I did not want to promote stocks against bonds or vice versa, I justed wanted to emphasize that I don’t think those comparisons make a lot of sense.

      • Yes, that’s true, it contains randomness, seen from the viewpoint of today’s investor. Except for those who have invested at the mentioned start point in history. It won’t be much comfort for them, that if they had invested two years earlier or later, their performance would have been much better. 😉
        So it does somehow make sense to search for periods where stocks did poorly – they DO exist, and that is a point against buy and hold (or at least against the wrong expectations connected with it). Nowadays, you don’t even have to search in Japan or Thailand for such periods…

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