Our run of consecutive positive weeks ended this week at 14. We declined by 0.04% this week, the benchmark fell by 0.91%.
On this day 4 years ago, if you purchased 1 share each of the ‘Big 4’ Aussie banks, you acquired an investment costing $124.03 cents, which had generated $9.65 in after tax earnings in the prior 12 months. Your purchase traded on 12.85x trailing twelve month earnings, or an ‘earnings yield’ of 7.78%.
If you made the same purchase today, for $209.17, you get TTM earnings of $12.52. Your investment has an earnings yield of 5.98%, and trades at a P/E of 16.71x.
Perhaps a better way to think about it is that your earnings have appreciated by 6.73% annually and the capital value of those earnings has appreciated by 13.96% over the 4 years.
I won’t labour the point I’m trying to make. Suffice it to say that the capital value can’t grow at twice the rate of any given earnings stream for very long – Tony Hansen 27/03/2015
|
|
Apr 1st 2011 |
Jul 1st 2014 |
Current Price |
Since July 1st 2014 |
Since Inception |
|
EGP Fund No. 1 |
1.00000 |
1.56145 |
1.66193*1 |
6.43% |
81.33%*2 |
|
35632.05 |
45991.23 |
52253.43 |
13.62% |
46.65% |
EGP Fund No. 1 Pty Ltd. Up by 6.43%, trailing the benchmark by 7.19% since July 1st 2014. Since inception, EGP Fund No. 1 Pty Ltd is Up by 81.33%, leading the benchmark by 34.68% all-time (April 1st 2011).
*1 after 31May 2013 dividend of 2.333 cents per share plus 1.000 cent per share Franking Credit & 31 May 2014 Dividend of 7.000 cents per share plus 3.000 cent per share Franking Credit
