"Weekly" Newsletter, page-25

I don't know about philosophy but I always look to the fact that it takes time to get the market to understand the value of smaller stocks. Fundamental valuation funds have all done extremely badly and I think GC1 was at one point confused as a proxy for APT and the market pushed the share price too far. Since then its been down and it seems hard to recover the discount. I have decided to accept the discount and leave it alone. The same seemed to happen for CVT which now trades at a similar discount to NTA as we do here. If that NTA discount is the issue I cannot see that disappearing until a few of the growth darlings turn up to be dogs and the market starts valuing fundamentals again. I don't think that is far away.

I would caution investors about looking at the small caps index - my small caps are in two very different camps those that are just languishing and those that have shown a steady climb and I have a few that go up and down and I just trade them for small gains. I think that some of those that are not keeping up the pace with the market are, in fact, going to show signs of life when the buyers and sellers start to even out. In the small caps, it's hugely driven by sentiment and buyers vs sellers.

I don't pay any attention to the top 5 as I have no idea how the rest are performing, my only review of those happens each month-end. So unless you have their list of 80% of the portfolio you have no idea until the release.