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.
My first prediction was that the Small Ordinaries (SO) index after years of being outperformed would register victory over the returns of the ASX200 in 2014. After finishing 2013 at 5,403.42 points, the SO finished 2014 at 5,197.54 points for a loss of 3.81% including dividends. Another year of losses for the SO against the larger ASX200 which made modest gains in 2014 as set out below.
So zero from one.
The second prediction was that the ASX200TR index, against which we benchmark EGP would land for the first time in 7 years in the +3% to +15% range (that is +/- 6% of its rough long run average of about 9%). Including dividends, the 2014 calendar performance was 5.6%, which is just a little below the central point of that range.
This gives me a 2014 prediction record of 50%, or pretty much what you could expect from calling coin-flips or any event with a binary outcome. I shan’t trouble you with my 2015 predictions, and I would advise against paying too much heed to those of anyone else, in virtually any field, unless the person making the predictions has a long and verified record of predictive expertise in that field.
EGP had the second weakest 12 month period in our nearly 4 year history. After commencing 2014 with a share price of $1.60232, paying a 10c dividend in May (including Franking Credits) and closing the year with a share price of $1.56166, our holders generated an IRR (internal rate of return) return of 3.9% in the calendar year. Because our performance period tracks the financial rather than the calendar year, the table below shows us trailing the benchmark by about 2.5%, but this is since July rather than January 1st. The first half of the year was OK in relative terms; the second half was not the best (A 0.01% return in 6 months falls well short of what I expect on the average, but returns never come smoothly).
I do think regardless of the results of the market that 2015 will be a good one in relative terms for EGP, a number of our larger holdings appear set for very sound near term results and the upshot of that will likely be good share price performance, though this does not always necessarily follow in a predictable way. Our investor letter will go out soon to fellow holders and I will add it to the ‘Reporting’ tab of the website shortly thereafter and link to it in the blog at the end of next week. Here’s to a good 2015 – Tony Hansen 01/01/2015
|
|
Apr 1st 2011 |
Jul 1st 2014 |
Current Price |
Current Period |
Since Inception |
|
EGP Fund No. 1 |
1.00000 |
1.56145 |
1.56166*1 |
0.01% |
70.39%*2 |
|
35632.05 |
45991.23 |
47139.24 |
2.50% |
32.29% |
EGP Fund No. 1 Pty Ltd. Up by 0.01%, trailing the benchmark by 2.49% since July 1st. Since inception, EGP Fund No. 1 Pty Ltd is Up by 70.39%, leading the benchmark by 38.10% 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
*2 calculated based on dividends reinvested
