October 2016 Update

IMG_20150621_132049475_HDR[1]Starting this October I have decided to group the updates in one single post, makes things a bit harder to read, but lots easier for me to manage:)
General Comments

I think that Mr.Market started some sort of pullback waiting for the US elections to be over and considering aquite probable interest rate hike in December. For what I have been able to see there have been consistent declines in REITS and UTILITIES, no surprises there. Generally speaking it was not a great month, if we compare it with the previous ones, but after 4 months of total idleness under the stock picking point of view it also marked my return on the market with some new stocks that I have decided to add. A lateral October I’d say, saving for yet another steep decline of the pound (that hurts total returns, but might open up opportunities).

LH Fund 

First “more serious” update of the LH Fund that I am calculating since the beginning of the year. TR is Total Return (what selling everything, paying taxes and commissions and converting to euro would mean in terms of return), YoC is Yield on Cost (what my investments have returned to me via dividends/options), TER is Total Expense Ratio (commissions + taxes).
Total Return is not something I am particularly concerned about at this stage (plus it’s an estimate as I have calculated potential taxes and commissions in it), it’s highly affected by the way the market behaves especially in a young portfolio such as this one. But it’s a metric that it’s worth keeping an eye on. YoC is on the other hand more interesting to me, as that is what the PF has produced over time, my target is to reach the 2% x year net mark (by net I mean YoC-TER).
TR (vs Previous Month/Record High August 2016): 3.2% (3.74% – 4.17%)
YoC (vs Previous Month): 4.85% (4.52%)
TER (vs Previous Month): 2.14% (2.09%)
Compared to September October saw a decline in TR, while the other two metrics continue to grow fortunately at different speeds (YoC must grow faster than TER or I am doing something wrong…). We are far from the result that the fund hit in August, but no complaints there, since in the middle we have had a massive fall of the pound which accounts for 1/3rd of my holdings. If I had no currency effect I would have a TR of 5.88%. My target this year is trying to get the YoC – TER to 3%, that would mean an average of 1,5% annual return since the Fund started, considering that the first year I was not invested in anything it would mean that I am already above the 2% yearly gain target that I have set almost 2 years ago.
Here some graphs to describe some of the movements of the Fund since I have started working on it.
Dividends and Options
Thanks to options proceeds October was the 4th month that managed to pass the 1000 Euro mark, dividends accounted for 616 EUR and Options trades for 396 EUR. I did not have a lot of chances to be active during October as I have been away for 2 weeks on a business trip and therefore I had less time to trade. Having said that I was also pretty much maxed out on the cash available ( I do not trade on margin), plus I had a series of positions that I had to roll so not all trades were actually “that” positive as it was in other months. Having said that Options trading keeps going on, learning new things every day!
LON:HSBA GBP 52.11
KO USD 18.55
BIT:ENI EUR 56.00
LON:DGE GBP 60.39
LON:PZC GBP 39.33
MPW USD 23.00
LON:GSK GBP 49.40
LON:IRV GBP 42.53
GE USD 12.65
NRZ USD 117.30
BPOP 2022 EUR 101.98
LON:OML GBP 30.71
DCA/Increased Positions
Nothing to Report
New Positions – Sold Positions
Bought 20 KMB @ 114.60 USD
Kimberly Clark is one of those companies that has been on my radar for some time, nice defensive stock, lots of important brands. A steep fall at the end of the month got yield just where I wanted it to be (3.2%) and I moved in, the stock might fall even further and that’s why I did not go with all the amount that I wanted originally to deploy, will add later eventually.
Bought 100 ORI @ 16.75 USD
Since my sale of CNF I wanted to add another insurance in my USA portfolio, ORI was the candidate, but not in the high teens as it was until few days ago. Relatively bad numbers got a steep decline in share price and here the first move to secure some shares and covered call possibilities (despite a bad book, the options are not very liquid). The stock is solid, relies on a boring business and pays dividends since the year 2000 with a very good yield (above 4%) which appears nicely covered.
Tax Optimisation
Nothing to report.

 

 

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17 thoughts on “October 2016 Update

  1. CIao ATL,
    Thanks for stopping by. If you have any ideas on how to share reports better (especially on the index fund part) please do tell me, I am not sure it’s a good way… As to the income so far so good, but the beginning of November has been nothing short of terrible…
    Ciao ciao
    Stal

    Like

    1. CIao WdYR,
      Thanks for stopping by! I am now checking your blog, very interesting things you’ve got going there! As to options, please be extra careful, although they are nothing difficult to dealt with they are always derivatives and need to be traded knowing that there are a lot of potential losses that can be achieved too (unfortunately)… 😛
      Ciao Ciao
      Stal

      Liked by 1 person

  2. Ciao Chris!!

    Thanks a lot for the support, it’s not easy to keep income above 1000 euro but I am trying hard… I have bought some stocks recently so the amount that I can deploy for options is decreasing, there will be a slowdown in future months I guess but that’s ok. I have seen that you are doing wonders (as usual)!
    ciao ciao
    Stal

    Like

    1. Ciao Chirs,
      But you are doing very well! Most than all I really look up to your option trading style, which has a much higher return profile, so to me you are doing really well! 🙂
      As I wrote on someone’s blog, 1000 euro per month is nothing if the starting amount is 1 million… I cannot complain right now, my target of 2% NET from the PF is within reach… Ciao and thanks for coming by!
      Stal

      Like

    1. Ciao Team CF!
      Thanks for stopping by, these are “good months” considering that there are many dividend payments at the end of the year, still cannot complain 🙂 Thanks for stopping by!
      Stal

      Like

  3. CIao Jasmin,
    Thanks for the comment! Hopefully I can get another month like that, but much depends on the USA elections, it’s very early in the day here and the looks is that there will be a huge market crash coming up our ways….
    ciao ciao
    Stal

    Like

    1. Ciao MSM,
      Thanks for stopping by, I really appreciate! Well 1K is a good result no complaints about it at all, November has been a challenging month for the fund, mostly because a lot of defensive stocks have taken quite a beating after Trump election, having said that currencies are helping me in getting back some of the lost ground so all in all (until today) I cannot complain about the result, but there are 10 days to go, lot can change I am afraid… Thanks for stopping by again!
      ciao caio
      Stal

      Liked by 1 person

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