Friday, 8 February 2008

My Portfolio: 2nd Year, First Quarter Return

That was tough 3 months. Returns have been much harder to come by in the last 3 months as the All Ordinaries index has fallen almost -13%. As can be seen below the 2 companies I own shares in are down in line with the broader market. The reason my Portfolio has managed a flat return is because of a well timed trade in ANH which enabled me to book a 20% profit.

It is not part of my investment strategy to trade stocks. I took advantage of the sharp decline in ANH's stock price on January 22nd as world stock markets plummeted. However, the company's subsequent quarterly report was disappointing and therefore I felt it was prudent to take my profits off the table and look elsewhere.

My investment strategy is to seek out good businesses with the ability to grow at better than average growth rates and acquire them at reasonable prices. I expect both PWK and PBP to confirm that they are such businesses when they report half year earnings in the next couple of weeks.

Since inception (November 2006) My Portfolio is up approximately 25% as opposed to the XAO which is up just 5.5% over the last 15 months. I believe this year will continue to be tough to generate the above average rates of return enjoyed in the Australian market over the past 4 years. However, the good news in such an environment is that a number of good businesses are now looking much more attractive after the recent correction in prices.


Glen said...

I really love this blog.

I read it quite often, but never have much to say about it, and have been slack with my blog. I'm intimidated when it comes to fundamentals, so don't comment.

Keep an eye out, I'll be posting a lot more I hope. Especially in regards to economic philosophy.

Congrats on your returns by the way. I can't keep track of things like that due to multiple accounts, trading methods and general disorganisation. But beating the market is never to be sneezed at, so well done.

Would be interesting to see your opinion of other investibles other than equities, if in fact you do that.


The Fundamental Analyst said...

Thanks for the kind words Chops. Feel free to post away, it's good to get differing views on things.

As for other types of investments. The reason I stick to equities is because that's what I know. Although I have been considering dabbling in other areas such as FX.

My views on commodities are that they will deflate like other asset classes over the coming 12 months in line with a global economic slowdown.

I just don't think the US can inflate their way out of trouble this time and therefore commodity prices will have to come down with everything else. However I have to admit I'm not well versed in the supply and demand equation with respect to commodities.