Update No. 95 – 11/01/13

I write this entry from Guangzhou, the third biggest city in China.  Once again, my less ‘hands-on’ approach has paid off this week with a 1.2% gain against a fall of 0.3% for the benchmark.

I jest of course in attributing the recent run of good weeks to the fact I am away and less actively monitoring the portfolio. The important thing with good investment ideas is the gains will rarely come in nice, steady out-performance.  It is my experience that as often as not there will be no particular catalyst in the correcting of a previously undervalued stock, but the correction will often come very quickly.  This has been the case with a couple of the stocks we own, and because we have fairly concentrated holdings, the movement in our portfolio has been correspondingly rapid.  Truth told, most of our holdings are moving no more impressively than the market, but one or two shining lights are making us look good overall.

I maintain as I said in the weeks leading up to the close of 2012 that there is still meaningful undervaluation in our portfolio, which I expect will correct itself eventually, when it does, I expect there will be (there usually is) some newly undervalued businesses to replace them to maintain what Einstein called ‘the most powerful force in the universe’, compound interest.

I look forward to reporting next week’s results from the comfort of my own office, though I won’t complain if our recent run of growth continues as it has during my travels – Tony Hansen 11/01/13

EGP Fund No. 1 Pty Ltd. Up by 6.27%, leading the benchmark by 4.94% since January 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 29.36%, leading the benchmark by 23.78% all-time (April 1^st 2011).