Tag Archives: Investment Performance


Our weighted average return in November was -0.36%, bringing our year-to-date return to +15.26%.

Many of our favoured sectors performed poorly in November – emerging market bonds sold off, biotech was weak and base metals miners underperformed. Thankfully, our asset allocations and security selection allowed us to preserve capital in our portfolios.

Earlier in the month, I attended an investment conference in Berlin and was taken aback by the amount of construction going on in the city. My perceptions of the German economic zeitgeist were confirmed later on in the month when I heard of an actual case of a commercial lease in Berlin being renewed at a 40% increase from its previous level. Unsurprisingly, Germany reported impressive GDP growth of 2.8% versus an estimate of 2.3%. Clearly low rates in Europe are having the desired effect in its largest economy. Moreover, the Eurozone manufacturing Purchasing Managers’ Index (PMI) hit a new record high of 60.1, which is consistent with a growth rate of more than 3%. Not so long ago Europe was petrified of deflation and interest rates were below 0%. Now the stage has been set for what could be considerable inflation. It remains to be seen how the ECB will navigate this new environment, but we will be avoiding investment grade, long duration European bonds for the foreseeable future.

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Our weighted average return in July was +3.10%, bringing our year-to-date return to +11.86%.

During July we focused on analyzing corporate earnings releases. As a whole, the results were very impressive. As of the end of July 72% of S&P 500 companies beat their mean earnings per share (EPS) estimates and 70% beat their mean revenue estimates. These results were evidently very encouraging to equity investors. The S&P 500 ended the month up 1.95% and market volatility reached new lows.

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Our weighted average return in June was +0.23%, bringing our year-to-date return to +8.49%.

Last month we mentioned that we saw weakness in tech stocks, and in June, we saw continued volatility in this sector. Thankfully, our rotation into different sectors helped offset losses on our remaining tech exposure.

One outperformer of note was Nike Inc. Nike shares have struggled for the past year-and-a-half, but they appreciated by 11.34% in June due to better than expected results and positive guidance going forward. Nike is a phenomenal brand that continues to invest in cutting-edge technology, yet it was trading at a significant discount to its peers. It had also been caught up in the widespread selloff of retail stocks. We were buyers of Nike shares on price weakness in May. When quality companies sell off, you sometimes have to ask yourself “will this be trading higher in five years?” Our answer was an emphatic “yes”. Moreover, 55% of Nike’s revenues come from outside the US, which means that their foreign revenues can be a tailwind in a weakening USD environment.

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Our weighted average return in March was +0.68% bringing our YTD return to +5.08% (net of all fees).

In March, many of the Trump trades (financials, cyclicals, small caps) got hurt as it turned out that not all Republicans are ready to repeal Obamacare, much less replace it with Trump’s “World’s Greatest Healthcare Plan of 2017” (yes, this was the actual title!).  The failure to pass this new bill cast doubt on just how united the Republican majority actually is, and undermined the market’s confidence in Trump’s ability to push through tax reforms.

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Amazon reaches new highs

It seems that Amazon is unstoppable. Of course it isn’t but it may seem so.

There are plenty of articles that help Amazon go even higher, such as:

It’s most ambitions sports deal to date Amazon wins streaming rights to 10 NFL games

Amazon launches Amazon Cash, a way to shop its site without a bank card Link

Also, absence of bad press helps.

We’ve been writing about Amazon for quite some time and perhaps mentioning it too often. It’s been very profitable position for our clients and we’re still bullish.

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How Most Investors Underperform The Market

In our January commentary we wrote:

Although we have been taking profits on some of our high-flying stocks, we do not intend to try to time the market by selling stocks that we like in the hope of buying them back more cheaply in the future. This is called being ‘cute’. ‘Cuteness’ is the domain of babies and puppies, not investment managers.

We continue to abide by what we wrote.

LINK: Our January Results

However, it seems as if cutting and running is a huge problem for retail investors. Panic induced selling leads to missing returns as markets recover and trade higher.

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Our weighted average return in February was +1.95%, bringing our YTD return to +4.38% (net of all fees).

Many of the themes that we wrote about last month are still very much in play. Biotech continues to deliver and so too do our investments in robotics. Our European investments also had a good month and our bonds continue to deliver steady returns.

The ongoing flow of positive economic data from the US will probably result in further tightening from the US Fed in March. Economic data in Europe is also picking up. Inflation in Germany is at + 2.2%. If this continues, how long can the ECB leave rates at 0%? Whomever answers this question most accurately will make a lot of money. We do not know when rates in Europe will rise, but are aware of the fact that this could be sooner than most people think.

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Our December, Year End and Two Year Results

We are pleased to announce that our weighted average return in December was +1.81%, resulting in an annual return of +11.05% for 2016 (net of all fees).


December was a decidedly less eventful and more prosperous month than November. Both equity and bond markets were considerably less volatile than during November’s post-US election madness and US equity indices powered to new highs. As expected, the US FED did indeed raise rates and signaled that there could be up to three rate hikes in 2017.

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