Update No. 117 – 14/06/13

After last week’s epic blog, I’ll take it a bit easy this week and talk about something trivial.

We (just!) beat the market for the 4^th consecutive week this week. In total over the last 4 weeks, EGP has increased by 0.15% while the benchmark has declined by 3.65% – our 3^rd best 4 week run. This marks the 6^th time in EGP’s history this has happened and interestingly, we have never had a 5 week winning run, so hang on to your hat next week (on average the market has given us a 1.22% beating in the 5^th week).

I have said before I expect our performance to be best in flat or declining markets. Over the 24 weeks in question, the benchmark fell by a total of 7.22% while in those same 24 weeks, EGP was up by 17.04%. Given we have beaten the market by 32.24% over the 115 weeks we have operated; it means that 75.25% of our current margin of victory was generated in 20.87% of the time.

This is a small reminder that you will never be certain when the gains will come, but if you get your selections right, you can expect the gains to come eventually. Owning the right businesses is more important than perfectly timing the entry point. Rather than worrying too much about the general market, having a selection of companies you know intimately and waiting for one of them to enter a predetermined buying (or selling) zone is what I find works best, then adjusting your valuations as new information comes to light. Trying to enter and exit at guessed peaks and troughs can only lead to disaster in the longer-term – Tony Hansen 14/06/13

EGP Fund No. 1 Pty Ltd. Up by 16.40%, leading the benchmark by 11.37% since January 1^st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 41.70%, leading the benchmark by 32.24% all-time (April 1^st 2011).

^{*1 after 31May 2013 dividend of 2.333 cents per share plus 1 cent per share Franking Credit}

^{*2 calculated based on dividends reinvested}