Rooster one day, feather duster the next…

In Update No. 144, exactly 12 months and 52 updates ago, I explained what a waste of time predictions and forecasts were. Naturally, I then went on to give my two predictions for 2014. I will today check how they fared.

This week is a shortened one for the market due to the Christmas and Boxing Day public holidays on the 25th & 26th. I will keep the update similarly short. The details are below and I hope you find some time to spend with the important people in your life over the next few days […]

We eliminated another two holdings this week as I seek to get our number of holdings down to a more appropriate level. We hold shares in 26 businesses after these eliminations; I still view that as too many for a properly focused fund running a small pool of capital. I will continue to focus on ensuring the largest proportion of our capital is focused primarily on the greatest risk/reward opportunities.

We completed the final sale of a stock we have held since inception and finished selling on 27 November.

You know what hasn’t been discussed enough in the Australian business media the last few weeks? The Medibank Private IPO. Better add my two cents…

Confession time, as promised last week.

A savage 2.74% drop in our benchmark this week. Fortunately, we only felt roughly half that with a 1.38% drop. We dipped into negative territory for the first time since the July 1 beginning of FY2015, but I remain very positive about the long-term prospects of our holdings and convinced value is building like a coiled spring waiting only on the right circumstances to materialise.

I am being chauffeured North by my Wife as I type this to meet some old friends for a weekend of swimming, recreation and golf. I play golf about twice a year, it could be ugly…

I wrote last week about the first of our recently completed sales. I will repeat the exercise & cover another stock we finished selling recently.

We have done a little selling of late, closing out a couple of positions and trimming a couple of others.

The whole foundation of Eternal Growth Partners was based on my view that industry fee structures didn’t properly align the interests of the Fund Manager with the investor. In these pages I frequently pillory the funds management industry for using clients as a revenue source, rather than providing a valuable service and earning a fee. Although as a default, I generally prefer negative reinforcement, this week I will be a little new school and try on a little positive reinforcement.

Inefficiencies exist in virtually all markets. I have said before in these pages that EMH (Efficient Market Hypothesis) is approximately right and getting more correct with each passing year. In the information age in which we live, pricing inefficiencies tend to be corrected fairly quickly.

The first quarter of FY2015 ended reasonably well for EGP holders – we bested the market by 1.02%, which is an annualised 4.14%, more or less in the middle of the 3 – 5% outperformance that is our stated target.