August saw a continuation in the correction in both Mining and Oil stocks as both crude oil and metals continued to fall. Given positioning of the fund, this made for a difficult backdrop, but we were well placed for the most significant corporate development - Xstrata's £33/share cash bid for Lonmin. Lonmin was one of the funds' biggest positions and it made a major contribution to the funds' performance for the month.Given my belief that a counter bid is unlikely, I have sold a large portion of the Lonmin holding above the bid price and switched into other Mining stocks, specifically Xstrata, which offers a compelling mix of extremely low valuation, exposure to an attractive mix of commodities (specifically coal) and is itself a possible bid target.Elsewhere, we saw a sustained recovery across a number of oversold consumer cyclicals, such as Topps Tiles and The Restaurant Group, both of which are extremely well managed businesses. However, Enterprise Inns performed poorly as the market continued to fret about the performance of it's pub estate and high debt levels. Given its robust trading model and no immediate significant debt repayment issues, I regard Enterprise Inns as an attractive investment at current levels.
209.90p
