The quarter was a heady one to summarize it in one word. We started Q3 at +34.01% and had no clue what was in store for us in Q3. To my pleasant surprise the strategy outperformed my wildest imagination and ended Q3 at +86.63%. The benchmark indices Nifty 50 and CNX500 performed at +14.79% and +18.71% for the same period respectively.
The strategy saw a max drawdown of around 7% by mid Dec which was fully recovered by the end of December 2017.
The distribution of the current constituents remained highly skewed, dominated by one stock GOACARBON which is up 522% since the start of the FY. The stock is a testimony to the Mi25 core principle of letting winners run until they don’t.
Q3 saw very minimal changes in the portfolio mix with only 4 exits from the portfolio:
The notable addition to the Mi25 portfolio was ZENTEC during Q3 which is now up almost 80% in less than 8 weeks.
Needless to say, this kind of a heady performance cannot be expected to be repeated often. The new users of Mi25 must keep a sober expectation in the short term even while longer term strategy out-performance confidence has gone to a new high. If you are coming in with a medium to long term view, I see no reason to be be afraid of the dizzying heights reached recently. I draw tremendous confidence from a simulation of the Mi25 strategy that came out of the 2008 drawdown of near 30% in less than 12 months.
I do wish to take this opportunity to thank each and every Mi25 family member for having faith in me and to have enjoyed the ride of 2017 alongside. I wish you and your families a Very Happy New Year 2018!