A bit late this year, here is another letter from the good folks at Giverny. I post these letters because I operate on a near identical investment philosophy with the notable exceptions being:
1. my writing skills are far inferior;
2. my investment record is much shorter.
Giverny Capital Annual Letter 2015.
Notable quote from the letter:
"Significant and educational conclusions can be drawn from a 20-year period. Since 1996, our companies
have increased their intrinsic value by 1102%, or close to a twelvefold increase. Meanwhile, the value
of their stocks has increased 1141% (net of estimated currency effects). On an annualized basis, our
9
companies increased their intrinsic value by 13.2% and our stock portfolio returned 13.4% per year. The
similarity between those two numbers is not a coincidence. (my emphasis)"
Yours One Legged
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1 comment:
Hi Peter, I read the linked letter with interest - and then I applied his formula of adding the % gain in EPS to the dividend to get a "owners earnings" percentage. What I discovered was a much larger gain in my portfolio - to the extent that I think I must have misunderstood him! Alternatevely its an outcome of the number of businesses that grew their earnings by huge amounts - several grew earnings by more than 100%, some by several hundred %. My average was 51% EPS growth over the portfolio and 4% in dividends - implying a growth in owner's earnings of 55%!
Did you have a look at his formula with your holdings?
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