THE ECLECTICA FUND - AUGUST 2004

Investment Manager’s Report:

The world of professional skin divers is full of legend. They plunge to depths of 100m on a single gulp of air. A diver once explained how one meets a mermaid. You have to plunge deeper to the bottom of the ocean than anyone else: to the dark reaches of “The Grande Blue”. Uncertain whether your lungs can make it back to the surface, the committed must wait in the dark recesses. Wait and wait…only then might a mystical hand reach out from the shadows. I keep thinking of this story as I invest this year: the loneliness of some of our positions and the sheer emotional exhaustion of managing a portfolio designed to embrace the future. Bull markets are formed deep down in the abyss of our conscience.