Decade of Daddy Mirror Fundâ„¢ Q3 Report

Treading water is about all you could hope to accomplish in the capital markets during the third quarter. Our two Venezuelan bonds have bounced around in recent weeks, and the banks are off badly. BCE is doing surprisingly nicely, however.

Despite the pain, we continue to beat the key indicies and our true benchmark: OGE.UN:TSX. Although it is much harder to figure that last part out as KO terminated the OGE Fund a few months ago. Gone is the daily quote, and we are left with some new Global Equity Yield mutual fund to use as our benchmark.

Our Decade of Daddy Mirror Fundâ„¢ was up 6.8% to $42.7 million as of the one year mark (July 1, 2009), and 32.6% to $53 million as of Canada Day 2011 (the 3rd anniversary). We are down $700k (to $52.3M) subsequent, despite this nice dividend and income stream. Being too long financials will do that to ya! Since inception, we are up 31%.

During the same timeframe post-launch (which was Canada Day 2008), the Dow is down 4.1% and the S&P 500 is off 12%.

In the Mirror Fund, we’re making money in BCE (+13%), BMO (+4%), BNS (+7%), Bristol Myers (+42%), Goldman Sachs 2037 Subdebt (+25.2%), Duke Energy (+14%), Spectra Energy (+13%), TD Bank (+14%), Discovery Air 2016 8.35% Unsecured Convertible Debentures (+0%), , and PETROLEOS DE VENEZU NOTE 2014-10-28 4.9000% (+5%).

Since the fund began we’ve locked in our gains on BMO ($775k and $1.133MM but we are back in again), BNS ($136k but are back in again), CIBC ($242k), JP Morgan ($1MM but are back in again), Merrill Lynch ($799k), MKS ($3.19MM), Royal Bank ($566k but are back in again) and Teranet ($307k plus distributions) as you’ve read in prior reports. We’ve also taken losses on Canadian Oilsands and Eli Lilly.

In the red column: Berkshire Hathaway (-23.6%), JPM (-28%), Merck (-7%), Royal Bank (-15%), Thomson Reuters (-22.4%), and BOLIVARIAN REPUBLIC VENEZUELA AMORTIZING BD REG S 2022-08-23 12.7500% (-2%).

Over at OGE.UN:TSX, the trading price of the fund (plus distributions) trailed the S&P, Dow Jones and our little test fund during the entire experiment.

MRM
(disclosure: this post, like all blogs, is an Opinion Piece; we own BCE, BMO, BMY, BNS, GS sub debt, RY, SE, TD and those Venezuelan bonds in our household)