Three year anniversary!
Updated: Nov 18, 2020
A quick note to celebrate the three year anniversary of the Balmoral Fund and reflect on the relevance of our cornerstone for portfolio construction.
For our first three years, after all costs, we have generated a double digit compound annual growth rate. More importantly this has been achieved with very robust risk management in place.
A strong start which closely aligns with our purpose and which has affirmed what we are about.
From the start we said our goal was to compound our capital over long periods. More specifically Balmoral has an absolute or 'positive return' focus. We want to generate a positive return every year that is possible because of the mathematical certainty that such a glide path results in wonderful outcomes for our investment capital over long periods.
This focus means being prepared to miss out on that last dollar of gains, only risking our capital via high probability and attractive opportunities, and watching calmly as exciting but high risk opportunities pass by.
This philosophy was first implemented in late 2018 when we sold a lot of investments for strong gains. Those sales ultimately provided us the cash we needed to take advantage of the market sell-off we experienced at the end of 2018 where we acquired great assets at excellent prices.
This philosophy was also implemented from mid 2019 when we again started selling investments that had enjoyed strong gains to move to a conservative positioning holding more cash while we awaited the next round of good opportunities.
This prioritisation of risk management over opportunity has benefited us in good times and will certainly benefit us in bad. There is a high probability that over the next three years markets will experience its share of downs as well as ups - under those conditions risk management will be the key to our continuing to deliver on our promise.