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from Outstanding Investor Digest's August 8, 1996 edition


CUNDILL VALUE & CUNDILL SECURITY FUND'S
PETER CUNDILL & TIM MCELVAINE

"MANY HAVE BEEN RESTORED THAT WERE FALLEN
AND MANY SHALL FALL THAT ARE NOW IN HONOR."

 

   During the 21 years Peter Cundill has been at its helm, Cundill Value Fund shareholders have enjoyed a compound annual return of 18.6% after all fees and expenses vs. 15.6% for the S&P 500 and 12.7% for the TSE 300. As we told you in 1992, Cundill has lagged both indices for a calendar year or more only rarely -- with payback in those few instances swift and sweet. Sure enough, his total return for '93 and '94 was double and quadruple that of the S&P 500 and TSE 300, respectively -- 65% during that two-year period vs. 11% and 32% for those two indices.

   Anyone believing (or hoping) that history repeats itself may be interested to learn that Cundill lagged both indices in 1995. Here are Cundill's year-by-year return figures alongside those of the S&P 500 and the TSE Composite. (Performance figures for Cundill Value Fund were provided by Peter Cundill and Associates.)


Period

1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995

1975-95

Cundill
Value Fund

+32.2%
+31.5%
+21.1%
+41.6%
+30.1%
+15.9%
+18.8%
+25.6%
+44.1%
+ 6.0%
+22.5%
+ 6.8%
+12.9%
+19.1%
+10.1%
- 9.5%
+ 5.4%
+ 7.2%
+43.1%
+15.4%
+ 8.2%

+18.6%

S&P
500

+37.2%
+23.8%
-7.2%
+6.6%
+18.4%
+32.4%
- 4.9%
+21.4%
+22.5%
+ 6.3%
+32.2%
+18.5%
+ 5.2%
+16.8%
+31.5%
- 3.2%
+30.5%
+ 7.7%
+10.0%
+ 1.3%
+37.4%

+15.6%

TSE
300

+18.5%
+11.0%
+10.7%
+29.7%
+44.8%
+30.1%
-10.3%
+ 5.5%
+35.5%
- 2.4%
+25.1%
+ 9.0%
+ 5.9%
+11.1%
+21.4%
-14.8%
+12.0%
- 1.4%
+32.5%
- 0.2%
+14.5%

+12.7%

    A perhaps related subplot is his use of futures and put options. In 1992 and 1993, he was short the Nikkei. And his largest exposure on the long side to any country was to the U.S. In contrast, today, he tells us he's short the U.S. And his largest exposure at year end was Japan.

    For all those reasons and more, we're particularly pleased to bring you excerpts from comments by Cundill and associate Tim McElvaine at the latest annual meeting of Cundill Value Fund and Cundill Security Fund which took place May 7th in Toronto plus conversations with both which took place between July 10th and August 8th. We hope you find their bird's-eye global view and sampling of current bargains as fascinating and valuable as we do.



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