Monthly Letter October 2012

All the information that you as an investor think is worth reading or looking at is digested before you make your investment decision. Be it from companies, politicians, regulators, analysts, media or fellow investors. The choice to believe what you hear or read is not obvious until, hopefully, afterwards. As a very wise analyst once told us in a meeting; it is safer to wait and see what happens. This is of course a piece of advice which is totally unhelpful for anyone. Rather remarkably he is still employed as a sell-side analyst. There is clearly still some excess flesh in the industry.

In our last monthly letter we said that listening to companies and digesting their financial statements is one of our main sources of information. The Q3 reporting season was marginally ahead of official consensus on a global basis (1.1%). On a regional basis the US surprised to the upside, Europe in line and EM and Japan were the disappointments. Emerging markets and Japan are not our core markets so you might say that our core markets beat estimates slightly.

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