Thirteen percent is good enough for him, and it's good enough for me.

To summarise: Luxury fabric and wallpaper designer Colefax is a conservatively financed niche business managed in the interests of shareholders. It's been consistently profitable over the last eleven years and by buying back its own shares, grown shareholder wealth 13% a year.

2011's results look so good the company appeared to have recovered fully from the recession, in which profitability almost halved, but it's likely to be a temporary reprieve. That's because Colefax's decorating division earned exceptional profits in 2011, which will not be repeated, and it faces an uncertain economic outlook characterised by rising fabric costs and, perhaps, less spend-thrift customers.

There are a couple of puzzles, things I'm not sure about, that probably don't affect the investment case. I've thrown them out in the interests of making a decision.

The first is the shareholder register. These figures are changing slowly as the company is buying back shares, but at the end of April, the biggest shareholder was the chairman David Green, who owns 32.4% of the company. The only other investors with more than 3% of the company are Discretionary Unit Fund Managers, 20.7%, Schroder, 15.3%, and Hunter Hall, 11.6%.

Together, the major shareholders own 80% of the shares. Unless any of them are willing to sell, the scope for buybacks is limited. What does the company do with its profit then? There are options, special dividends, acquisitions, but they presumably offer less reward, or more risk, or both, or the company would be doing them now.

This is a distant problem that may never happen, and I'd rather invest in a company that was earning so much money it didn't know what to do with it, than a company earning so little money it couldn't do much with it.

The other conundrum concerns operating leases, which presumably finance Colefax's offices and warehouses. Its total obligation, or debt, to landlords is about ''25m, not a worrying sum considering Colefax is light on other kinds of debt and consistently profitable.

The increase in operating leases over the years puzzles me, though.  In 2001 Colefax's commitments were only ''2.5m. The value of the properties the company owns has remained relatively stable, so its as though Colefax has expanded. Sales though have only increased about 10%.

I think Colefax is obviously a good business and I think it can earn a return on equity of 18% in a typical year in the future, as it has over the past eleven years, although the next couple of years might be interesting.

The only remaining question is, whether the current price is a fair one. The company's book value (shareholders' equity) is ''25.46m, and the current share price of 247.5p values Colefax at ''34.65m or just under 1.4 times book value, so investing now will not earn the Thrifty 30 18%.

To derive the portfolio's return I divide ROE by price to book value, or 18 by 1.4, which is more like 13%.

That is, of course, also the return the company is getting on the shares it's buying back. It's good enough for David Green, and it's good enough for me.

I've added 400 shares in Colefax at 249.5p, the actual price quoted by my broker this morning, deducting ''10 in lieu of broker's fees and ''5 in lieu of stamp duty.

My office walls are still magnolia though, not: