The total portfolio increased in value by 0.4% for the two months ended 31 December 2011. The market itself increased 1.5% over this time. So the fund is tracking below market. The internal rate of return of the fund (the compound growth rate, annualised) is 2.9% for the two months to date.
There are 18 stocks in the portfolio. We like each and every one of them, but we feel like 18 is towards the upper limit of how diversified we want to be. Given the limited amount of capital, having fewer stocks and making fewer trades is preferred because then we can keep trading fees as a percentage of funds to a minimum.
We expect to rebalance the portfolio in March. There are 13 businesses we own that we intend to hold for at least a year (and at least 4 we intend to hold for perhaps five years). This allows some room to introduce a few new stocks, but cull a few of the more marginal picks.
I only intend to update the portfolio performance quarterly from here on in. I think monthly forces us into a short term thinking (as does quarterly, but I've got to find something to do).
Over the break I read Warren Buffet's letters to shareholders on my kindle. I'll post some excerpts in the coming weeks. He's hilarious.