The passions of life are stronger than the disciplines of the institutions. So it was said in Naples, where I spent three days & nights this week.
The market has had what can best be described as a shaky start to 2016. As seems to happen when I travel and do not focus entirely on the markets, we turned in one of our best ever weeks of outperformance, despite a nearly 2% fall on the December 31st closing figures.
There are a variety of reasons why some people are successful in business and some are not. Some won’t put in the hard work to succeed, others pick a business they are unsuited to running, yet others a business that would not succeed not matter who ran it.
Solid week of performance for the fund leading to another new high mark. Better than this, is news giving the sense that the intrinsic valuation of a number of our larger holdings is running away from share price. Good things eventually follow when this is the case.
When I sat down to do the numbers, I had thought it was a really wonderful week for our portfolio. I figured we’d be at a new all-time high and we were, but the market still trounced us this week. The 4.00% gain was the 5th biggest week for the benchmark since the fund started and we are too index unaware to keep pace with such a meteoric rise without something unusual happening to one of our larger holdings.
I will talk a little about a stock we own this week, and have no intention of selling. I seldom do this, but I believe we are probably finished buying (absent a decent retreat in prices) as it has already grown to our 5th largest holding. In any case, it is a good instructive example of the type of very good returns available from time to time to the alert. Also, the gains here are primarily income driven rather than capital gain driven, so it is different to many of our holdings.
Some weeks when there seems to be nothing of particular interest to write about in the weekly missive that accompanies your EGP share price update, the market steps in & writes a story for me…
We’ve had a busy couple of weeks, with quite a bit of buying taking place. I mentioned a couple of small positions in the last quarterly (.pdf). I said I would discuss them in the blog after they had played out and one more or less has now, so I will try to explain the thinking in it, and why it was such a tiny position and the type of thinking we use at EGP to try and generate risk adjusted returns for our shareholders.