XAM REPORT
Dear Friends and Fellow Investors
Xam Report First Half 2008
During the first half of 2008 the share price of Xam Capital Ltd. went up by 2.88 % to 213.27 USD ( as of 30 June 2008 ). While this result looks somehow modest it has to be seen against the storms and disasters which befell most markets. While a number of indexes dropped by over 20% there are numerous well-known stocks ( e.g. banks ) which have lost more than half their value. It was definitely a challenging time and we expect the problems to continue for a while longer. As mentioned before we hold a sizeable part of our assets in cash and this enables us to scoop up certain targets at reasonable prices. Although there will be large swings and volatility in prices we are confident that at the right point there will be extremely attractive companies for us to buy. We will watch the developments a while longer until we feel that certain worst case scenarious ( e.g. the closure of the Straits of Hormuz ) have passed. Inflation is definitely a big danger and has to be monitored as it affects interest rates worldwide. At Xam be believe that rates probably have to go up more as inflation hits dangerous highs in many places, especially developing countries.
April 17th 2008
The markets have been quite tough and a lot of folks have seen dwindled funds in their accounts.
Luckily, XAM Capital Ltd. shareholders are not among them. In fact XAM's share price just reached a new all-time high of USD 212.64 (as of April 17th 2008 ).
As you know, we navigate a rather cautious course, holding about half of our assets in cash. Our investments in energy companies have done well and are the reason why we haven't suffered any losses from the tumultuous events of the last few months. In hindsight, it all looks so obvious, but the fact is, many people haven't taken the energy boom seriously. A guy like Lee Raymond, many years the CEO of the world's largest oil company, Exxon Mobil, has told us that oil at 40 USD was way overpriced - and the bubble would burst soon. He retired two years ago with 400 million USD compensation. The respected Economist magazine announced, when oil was trading at 17 USD, that it would soon fall below 10 USD. Banks like UBS, the largest manager of private money, pushed obscure instruments and derivatives and lost a lot for itself and some of its clients. Nobody gave a s@#% for oil and gas. That has changed by now, although many still believe oil is due for a big fall.
It's possible, like everything is possible. But we read, over just the last few days, that Nigeria's output might fall by a third, Russia's production has peaked, Alaska, the North Sea and Mexico are collapsing. Ominous signs, we believe. Anyway, we'll continue our deliberate and prudent course and are confident that this will be successful over time.
December 31st, 2007
At 207.31 us dollars Xam Capital Ltd.'s shares registered an increase of 17.78 % for the year 2007.
Considering the turmoil in many financial markets we consider this result as satisfactory.
The widely reported troubles of various banks which had exposed themselves to subprime debt didn't come as a total surprise to us. For some time already we were worried about the explosive increase in the derivatives trade.
The compression of available credit in 2008 will guarantee us another difficult year.
Due to the widespread uncertainties we will see a lot of volatility and at some stage very attractive entry points.
Our high cash position will enable us to take advantage of special situations.
Overall we are careful about the markets but optimistic about the future of Xam Capital Ltd. Our cautious and considered approach to investment decisions should help us to outperform substantially.
There are many opportunities for us and therefore we look very excitedly to the future.
