CV Capital

CV Capital – 31 August 2018

To my fellow shareholders,

The month of August is a bit like d-day for stocks. It is reporting season for most ASX listed stocks and as an investor, August can be a make or break month for your stock thesis.

We were fortunate at CV Capital that the reporting season has resulted in a monthly gain of 7.9%, our largest monthly gain to date. The portfolio gains were mainly driven by gains in our largest and 5th largest position (based on cost). Our largest position in the fund, Schaffer Corporation (see original thesis here) increased by 18.4% in August on the back of strong earnings from its automotive leather business. Our 5th largest position (I’m not ready to disclose this) increased by 48% in August due to more favourable industry conditions moving forward. We could have gained more except for the fact that I made a mistake by being too conservative with the buying and therefore did not end up with the full target weighting for this stock.

In terms of activity, we did not buy or sell any shares in August.

Our portfolio currently consists of ten stocks with the top four positions making up 62.9% of the fund (based on market values). The concentration of the fund has gone up in August due to further gains in our largest positions. We are still comfortable holding these large positions as although they have appreciated, they are not overvalued.

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 August 2018. Our cash position is circa 11.2% of the portfolio.

 15 Jan 1831 Aug 18Gross Dividends
Return (incl
CV Capital1.001.171nil17.1%
Benchmark STW56.759.691.2597.5%

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