Another Misunderstood Spin-Off, page-84

I think that one of the most valuable thing we private investors can do is to re-visit our investment theses that were formulated at the time we bought into businesses (not just where we got it right, but of even more value, where we got it wrong).

In CYB's case, the essence of the investment case was that, at Price-to-Book of 0.5x, the stock was price like ROE would remain at the then- paltry 5% level to perpetuity. Despite management's clearly articulated strategy to drive down Cost-to-Income, and hence, ROE.

With ROE now approaching 10% (which probably close to CYB's level of sustainability), and with the share price having responded, resulting in P-to-B approaching 1.0, it looks to me like most of the investment out-performance that was envisaged, has been delivered.

Accordingly, I have been selling my CYB holdings in recent days.

Of course, no investment thesis goes exactly to plan: in CYB's case there were some major seminal events that happened over the past 2 years, namely Brexit and the acquisition of Virgin Money.

Personally, this investment has reminded me yet again of the value of focusing on the underlying performance of the business itself, and not being fazed by un-forecastable, extraneous, macroeconomic events over which management has no control.
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