THE ASANOR ENDOWMENT FUND FEBRUARY 2005 REPORT
Strike the Gong and Count the Rods
ASANOR’s Endowment Fund Sets a New Record
“One pleasant morning after a cold night, February 24th, 1850, having gone to Flint’s Pond to spend the day, I noticed with surprise, that when I struck the ice with the head of my axe, it resounded like a gong for many rods around, or as if I had struck on a tight drum-head.”
On a similarly cold February night 155 years after Henry David Thoreau’s adventure, the ASANOR Endowment Fund has struck the icy world of money and found (not exactly with surprise), that its gong rang loudly and triumphantly for many gratifying rods around.
How many rods? NOK 788.642, a gain of NOK 74,243 or 10.4 % since our annual report on Sept. 1, 2004, showed assets of kr. 714,399. We’ve made a year’s gains in six months, and yet we hope to pass NOK 800,000 by September, 2005.
We’ll try to achieve that mark through the diversity of our 16 fund holdings (eight in dollars, eight in kroner, including money market funds). During the past four months we have added Vanguard Inflation-Protected Securities (U.S. government bonds), a Liberty Ermitage hedge fund (each for $10,000 at an exchange rate of about 6.12), plus three new Nordea funds: Avkastning (kr. 20.000), Norden (kr. 25.000), and our star, Eastern Europe (kr. 40,000), all of which have yielded solid returns since their purchase. The Nordea Aktiv holding was reduced by kr. 20.000 because it wasn’t.
No one can predict the market (and we are fully invested in equities up to our 60% limit), but three elements suggest optimism in reaching our NOK 800.000 goal by September: (1) As always, the year’s grants were paid after the Sept. 1, 2004, statement; (2) Today’s figure include the transfer and up-front expenses for new holdings; (3) Our Sept. 1 total was calculated at an exchange rate of 6.8 to the dollar. This February, 2005, report was made using the current rate of 6.43, which of course detracted from our (paper) result. If the dollar rises, we gain because the Fund holds about NOK 390.000 in dollars today. Don’t take that too seriously, since our dollar investments are very long-term and the exchange is crucial only when placing fresh money. We hope we got the timing on the latter right with the placement of $30,000 in the last six months with a weak dollar.
As always, be prepared for a tight drum-head in the 2005 markets. Short-term reverses are certain, the dollar may decline in value, and we may break an axe or two. At the same time, remember the quotation that has introduced every Endowment Fund report since its inception: “Advance confidently in the direction of your dreams, and you will be rewarded with success unexpected in common hours.” That thought warms a February night.