Sell in May and go away, they used to say. Well May has been a month of two faces, bad start and great comeback at the end, volatility is lower than the beginning of the year and everyone seems to be awaiting for the 23rd of June when Brexit will be decided and also Yellen might bump up interest rates in the states a little bit more.
It’s hard to say if all is good or bad, but the feeling I get is that markets are certainly more tranquil than they were at the beginning of the year.
To the Long Haul PF May was an important month, for two reasons:
- I am moving the stocks to a new broker (Interactive Brokers), this will allow me to save substantially in commissions although I will have overheads in calculating taxes next year. I will also be able to trade options and I gain exposure to many more markets, which is good.
- Dividend record set (see here) and change in the way I account for dividends, now they are without the Italian tax which is calculated apart (IB will report dividends like that so I need to adjust)
LH Index Fund
Soon there will be a dedicated page, I promise. I am now playing around with numbers deciding what to show and how. I must admit that I am a bit confused on what could be an interesting statistic, and of course I need to be a bit forward planning in the way I save data so that I can use it also for YoY comparisons… If any of you have some suggestions to give me here please write them up it will really help me!
Going to performance the month of May saw a TR of 1,33% vs. a 0.73% in April.
The Index Fund is at a point where taxes and commissions (let’s call it TER) have now been overtaken by dividends, so from now on every time I get dividends there will be a positive contribution to NAV, while before I was trying to cover expenses.
Composition of the Index Fund is the following:
DCA/ Increased Positions
LON:PSON – 125 @ 7.9 GBP
LON:RDSB – 60 @ 17.3 GBP
BIT:G – 80 @ 13.00 EUR
Generali is the biggest insurance company in Italy with a very interesting array of properties and other assets in Italy. Dividend payments have been pretty…. unstable during the years, meaning that they have gone up and down according to the company results, but they have never been cancelled. Management says that they will keep the actual level, which is a very interesting 5% gross return. Insurance business is a tricky one to analyse as technically it needs a lot of money stashed aside to cover for premiums, it’s quite boring, in a way (and this is good). Low interest rates do not help financial stocks in general (my other european insurer MUV2 is suffering as well), but management said that despite the drop in profits they will still persue a dividend oriented policy. Payout ratio is currently 55%, not that dramatic, and it’s one of the highest in the last years.
BIT:SFER – 55 @ 19.20 EUR
Salvatore Ferragamo! Who doesn’t know this name? Top shot Italian brand for luxury goods, great company and great numbers for a “Cindarella” in the stock market (they were quoted only few years ago). They are a Florentine company, so let’s say that there is a bit of a home pride in this move as the return is below the 2% net mark, but at these values I am looking at a growth in the stock price too. Numbers are really good despite the recent setback in the luxury field, I love their brand equity and the way they have interests in many fields aside from fashion. It’s a well protected brand, so moats are incredibly high, the recent change of CEO is affecting the stock a little, hopefully a new one will come up soon.
BBEP – 200 @ 0.068 USD
BBEP has been probably one of the hardest lessons learnt since I started investing. Too many bad decisions have been taken here on this stock, and of course here I am paying the price for my actions. A whopping -97% loss, sold all my stake when they declared Chapter 11 two weeks ago. What did I learn?
- Invest in something you understand, maybe not completely, but at least understand at 70%.
- Get out when dividends are cancelled
- What goes down doesn’t necessarily comes back up
- Company recent history doesn’t count all that much
Despite this huge failure NAV managed to stay afloat, which means that there is some good underneath the ashes, must concentrate on that from now on, limiting “funky investments” to a small part of the Portfolio…