CV Capital – 31 May 18 update

To my fellow shareholders,

Firstly, I would like to share this long but excellent article on investing by Peter Guy. At CV Capital, we share 95% of the investing philosophy expressed by Peter and as I couldn’t have written it better than Peter, I highly recommend taking the time to read this article.

Secondly, CV Capital will be open to new subscriptions in July. The deadline for new subscriptions is 6 July 2018. Please contact me directly if you would like to subscribe to more shares.

In relation to our portfolio we opened a small position in a new opportunity. I have been following this company for the past 12 months and decided to invest due to some of its key competitors recently filing for bankruptcy. Although this company is not cheap by traditional benchmarks, I believe that the recent bankruptcies will strengthen the company’s position and create opportunities to grow its market share. We will continue to slowly build our position over time.

Our portfolio returns fell marginally (0.4%) in May. This was mainly due to one of our positions falling 32% from 1 May to 31 May. This same position then increased by 24% on 1 June. This shows how volatile stocks can be on a short term basis and doesn’t lend itself to an objective measurement of investing “skill”; luck plays a bigger factor in the short term. Although I have been reporting CV Capital’s performance on a month end basis, I’ve done it mainly for the purposes of transparency. CV Capital’s objective is to beat the benchmark over the long term (3-5 years) and therefore I place little emphasis on the current performance given the short history.

The table below shows our performance (before taxes) from inception to 31 May 2018. I have not prepared these returns on a compounded basis to make it easier for you to rework the calculations.  Our cash position is circa 12% of the portfolio.

 15 Jan 1831 May 18Gross dividends
(cumulative)
Return (incl
franking)
CV Capital1.001.05505.5%
Benchmark STW56.756.550.790421.1%

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