I mentioned in last week’s post a business we own (Dicker Data) that has good operating leverage characteristics (the result announced this week [.pdf] bore that out with a modest 5.6% rise in revenues generating a 12.8% rise in NPAT half on half). This week I will look at one we don’t own that has extremely poor operating leverage.

I mentioned last week that we have recently some buying and selling. My promise to investors is that although I will not always discuss in depth what we own, I will tell you a little about our holdings when we sell.

We have a special treat for our 150th investor update. I have written a contribution to a monthly investment newsletter. In order to read my ‘words of wisdom’, you will need to sign up for the free trial here – http://www.mr-market.com.au/ If you find – as I have – that the letter is a good deal more interesting and relevant than the majority of similar newsletters, then you might consider signing up for the subscription once your trial ends.

One of the trickier things for investors wishing to have their funds externally managed is (obviously) figuring out where they are likely to get the best returns. The finance industry is filled with warnings such as ‘past performance is no guarantee of future results’. That is obviously true, and I would hazard there are plenty […]

This week I thought I’d revisit a pair of posts made back on the original blog before the fund launched and before the website was created. The two part post was transcribed to the website here (part 1) and here (part 2). Revisiting your mistakes is important and in part 1 I had described QBE […]

In early May 2012, I talked about the ‘stock-pickers quandary’, whereby one need to consider ‘franchise’ valuation and long term earnings potential. I would like to revisit that today, because I think it serves as a useful example of how powerful the ‘franchise’ value is. In the intervening 20 month period (I will ignore currency, […]

Only 7 weeks ago, I mentioned US housing starts had not lived up to my base expectations of 1 million+ in 2013. With the publication of the November figures (.pdf), however, it was looking like I’d be correct, with the annualised rate spiking to 1,091,000 starts. With the release of the December figures, 1 million […]

We received our Audit this week (.pdf), confirming the issue price (of $1.60232) for shareholders adding to their holdings and new shareholders. We were fortunate in a week where the market declined by 0.7% to rise by approximately 0.4% to a new all-time high of $1.61239. I find myself answering a range of questions frequently, […]

Calendar 2013 has been a particularly prosperous one for us. In terms of personal recent performance, it is the best calendar year since EGP was incepted. We ended the year 34.97% better than our starting point after allowing for any fees and costs (and adding back in dividends paid). As for the last 8 or […]

This will be the final blog update of 2013. My next update is likely to be provided on 1 January, to report on the final (unaudited) results for 2013 as at 31 December. The investor letter for the first half of financial 2014 will be linked in that blog I expect. I’ve been quietly chuffed […]

I am an NFL fan. This is fairly uncommon in Australia, but it is a sport I thoroughly enjoy watching. I suspect the combination of interesting strategic elements with brutal physical contact is the main reason. I played Rugby League until my 30’s and enjoyed the physicality of it and strategy is innately appealing to […]

The ‘Offer to Invest’ e-mail goes out this Sunday evening, for those not on the list, the e-mail reads thusly:   Dear Investors and Prospective Investors, Attached herein are links to the documentation required to either: 1. Subscribe for new shares at the Audited closing price on 31 December 2013; or 2. Redeem some or […]

The downside to things being generally stable in the Global economy is there are not as many crises available to discuss in the weekly update in an attempt to keep it more interesting than just a reproduction of the weekly closing figures. I tweeted this week that the S&P500 trades on under 15X forward earnings, […]

We generated good ‘Alpha’ this week. We managed to do it in my favourite way too. With a decent decline in our benchmark defied by our holdings which grew by 0.29% on the week. I’m sure most of my fellow investors are starting to come around to this idea. If you still prefer to see […]

I directed readers to Update No. 97 last week to point out my expectation that 2013 would likely be a good one for stock markets. I also talked about US housing starts (pdf), predicting around 1 million starts for 2013 to underpin the expected US growth in the economy and in reducing unemployment. The housing […]