Value Fund December Report

Christmas was good. The ankle biters weren’t too bad, after all my whinging. And I managed to knock a couple of books off the Christmas reading list. All the devils are here is well worth a read – I’ve been meaning to post something on Moody’s for ages and this book gave me further ammunition.

What I find interesting is not that the conflicts of interest caused such a stuff up, but that they took so long to come to the surface (Moody’s switched from a subscription model to an issuer-pays model in the 1970s). I’ll write something about that tomorrow.

For now, though, it’s back to work. We’ve just published our Value Fund report for the December quarter. It contains some of the stuff I blogged on before Christmas (It’s Time To Buy in The US), an update on the key events for the quarter, including RHG and Photon, and a look at our performance over the first 14 months.

Assessing investment performance is inherently difficult. Over a period of anything less than a few years, underlying business performance – which is what we’re focused on – is drowned out by market ‘noise’. Share prices move around for all sorts of reasons, many of them unrelated to the underlying performance of the business (Rob Fitzherbert wrote a wonderful feature article, Learn to be a better investor, for The Intelligent Investor on how this makes for a difficult learning environment).

So our focus is on the underlying business performance and how they are tracking relative to our expectations when we bought the shares. It’s been a mixed scorecard so far but you can read all about it in the December Quarterly Update and let me know your thoughts.