Thursday, October 04, 2007

September 2007 Report

All figures are in US Dollars (USD) unless otherwise stated. This month saw very positive investment performance in USD terms, due to the sharp rise in the Australian Dollar (AUD). Underlying performance was also positive. Trading results were negative - I only traded during the beginning of the month before our move. Spending, not surprisingly, was at record levels. Net worth rose in USD terms but fell in AUD terms

Income and Expenditure

Expenditure was $11,812. My previous highest monthly expenditure was $10,174 in August 2002 when I moved from Australia to the US. We can attribute $9,582 to move related expenditure. We also paid $A744 ($US659) in rent for part of the month. Taking out the move-related spending and adjusting the rent to a full month's rent we would have spent $US3,263. For comparison this is roughly double my individual expenditure last month after removing moving-related expenditures and the cost of the laptop I bought that month. So spending is actually very much under control at this point. Snork Maiden earned a total of $2,336 from her previous job, her moving sale etc.

Non-retirement accounts gained $16,520 but would have gained only $1,943 if it were not for the sharp rise in the Australian Dollar. Retirement accounts gained $13,273 but would have gained only $1,474 if exchange rates had remained constant. These gains are both at record levels. In AUD terms both account types lost money for the month.

Net Worth Performance
Net worth rose by $US20,008 to $US458,963 and in Australian Dollars fell $A20,020 to $A518,309. Non-retirement accounts were at $US249k. Retirement accounts were at $US210k.

Investment Performance
Investment return in US Dollars was 6.79% vs. a 5.40% gain in the MSCI (Gross) World Index, which I use as my overall benchmark and a 3.74% gain in the S&P 500 index. Non-retirement accounts gained 6.83%. Returns in Australian Dollars terms were -1.74% and -1.68% respectively. YTD I'm up 20.9% (USD) vs the MSCI with 14.1% and the SPX with 9.3%. My non-retirement accounts are up 26.0%.

The contributions of the different investments and trades are as follows:

The returns on all the individual investments are net of foreign exchange movements. Foreign currency losses appear at the bottom of the table together with the sum of all other investment income and expenses - mainly net interest. Mutual funds made nice positive contributions as did a few US individual stocks. Australian listed funds and stock indices generally lost money.

Progress on Trading Goal

US based trading lost $1083 or 5.9% of trading capital. The model and the market both gained but I don't have the exact figures at the moment. My Ameritrade and Interactive Brokers accounts were at $55,873, down $100 on the month, against the goal of $64k. So negative performance on my goals in this area.

Asset Allocation
At the end of the month the portfolio had a beta of 0.54. Allocation was 35% in "passive alpha", 65% in "beta", 4% allocated to trading, 6% to industrial stocks, 8% to liquidity, and we were borrowing 18%. Our Australian Dollar exposure rose to 61% partly due to the rise in the Aussie. The move reduced "liquidity". We will reassess this level of liquidity when things have settled down some more from the move to Australia.


Anonymous said...

Would you care to comment on AEP.AX (Allco equity partners). They claim a net asset value of 5.5 AUS$ on their website (per presentation from 9/27) yet the stock is trading at less then 4AUS$. Why the large discount. Since most of the NAV is cash there should not be much valuation risk.

It seems too obvious of a deal.

mOOm said...

So far I've made 60 cents a share on this investment. So so far it's been a good deal for me.

I commented on this stock when I first invested:

I thought I commented more recently but can't find it. It has always traded at a discount. The QANTAS debacle didn't help - I bought right after that. The other issue is the overhang of shares that the Liberman family is trying to get rid of. The investments are very concentrated in some odd things. Actually with the latest commitment it will no longer be mainly cash.