September 2017 Update

IMG_20150518_192047General Comment
September has gone, the update is a bit delayed mostly due to the fact that there are companies out there that still pay dividends to the brokers with cheques, and this delays the whole cashing process and crediting into the account.

We were saying about September… Lifewise this month has been pretty slow and all my energies seem to be sucked by the coming wedding and its preparations. The fact that I am unemployed certainly helps in devoting more time there. Workwise I am moving the first steps towards the debut as a professor in January, working on lectures and syllabus for the course is proving to be harder and slower than I thought. I did originally say that I wanted to take 6 sabbatical months, the reality is that I cannot just “bum around” and I have started collaborating with a consultancy company where I am going to work as a project manager on export related projects.  This is the good part, the bad part is that in the first month I had to do a lot of meetings and traveling on my expenses and yet no contracts with prospective clients have been signed. Anyhow, that’s not the matter at the moment, work and school will most certainly regain focus after I am back from the honeymoon.

Markets have been quiet, still pushing “maximums” in terms of indexes valuation, but it’s evident that the composition of my portfolio doesn’t quite fit this profile. Having said that after 4 months of falling returns it seems that we are on the rise once more, mostly because of exchange rate fluctuations. “Out there” there is a lot of talks about future market crashes and stuff like that, it’s evident that it’s going to happen sooner or later, but right now all fundamentals appear to be quite positive.

LH FUND

Explanation of terminology is HERE.

Month TR TER YoC
11.15 0.00% 0.00% 0.00%
12.15 -3.33% 1.27% 1.13%
12.16 7.06% 2.34% 4.75%
1.17 4.76% 2.38% 4.93%
2.17 7.26% 2.53% 5.30%
3.17 8.15% 2.57% 5.82%
4.17 7.82% 2.65% 6.36%
5.17 7.59% 2.84% 7.21%
6.17 6.96% 2.89% 8.51%
7.17 6.62% 2.96% 9.17%
8.17 5.99% 3.00% 9.73%
9.17 7.36% 3.05% 10.33%

TR ratio bounces back, breaking a 4 month downwards trend. Currencies account for 1% of this growth, the rest is stock performance. Currency performance is – 5.33%, potentially TR could be 12.69% if currencies were at the same average price at which I bought them. Similar to last month currency aspects are not a major source of concern, stocks in the PF have been performing so and so, but this is the nature of a very defensive allocation especially in an expansion phase as we seem to be at present days.

Talking about Total Returns on Dividend and Options we have options Yield going to 7.22% (-0.29% vs August), while Dividend Yield goes to 9.23% (+0.34% vs. August). Total YoC breaks double digits and jumps to 10.33%, 0.60% in one month which is great. Decrease in Option yield is given mostly by the fact that changing the strategy to selling long calls on core stocks gives an higher “average days in trade” value, reducing yield percentage. I expect this total to reduce in the future, as the “days in trade” value is likely to increase.

TER is still lying low, a 0.05% increase is real good, value for is is now 3.05%.

Dividends and Options

September scored a 2030 Euro turnover. (3rd month in the year above 2000 Euro)

Dividends were 1115.55 Euro (+72% vs.2016) and Options scored a 914.47 Euro (+619% vs 2016). Very good results both of them, Option trades this time last year were still “green” so the comparison is not really fair (before someone thinks that I have struck a magic trading system responsible for this growth…)

Option strategy is now almost fully moved to the new approach (Long Covered Calls on core stocks for high strikes and at least 1 quarterly dividend as premium). On other stocks I keep the usual short put/covered call approach.

List of Options closed in September
Screen Shot 2017-10-11 at 15.12.52.png
DCA/Increased Positions

No activity here

New Positions – Sold Positions

ORI – Bought 100 shares @ 18.50 USD

Old Republic Insurance, was one of the holdings that I had some time ago and that I really liked, sold because of a crappy strategy (or should we say “no strategy”) on a covered call. Bought on a dip, solid dividend and very well run company.

LON:IRV and LON:CLLN – Sold entire positions

Both terrible investments, both for the loss that I had to endure (more than 4000 pounds) and for a string of decisions that I took. Both of them are construction services companies, I really thought that the sector could do well despite Brexit and all of it, but what I failed to understand was the poor management for Interserve (kept posting rising costs due to a failure on one of their main contracts) and the weight of debt that Carillion had coupled with pension liabilities (de facto Carillion went almost bankrupt). The fault is all mine, poor research to start with, and little due diligence after I was a shareholder, as if these stocks were “failproof”. I think that I can afford not to refresh my due diligence every quarter on companies like JNJ and MMM, but that cannot be done for small/mid caps.

Options Plays

None to report this month, I have a few active that are likely to be closed in October.


Conclusions

We are walking in bull’s territory, so things are good, if they were bad there would be a serious cause of concern for the strategy that I am employing. I spent a lot of time thinking “what would happen if the market was at 2008 levels”, how would the portfolio perform, how much loss would I have… They are all pointless questions, not so much for the possibility of yet another market crash (it will happen), but for the fact that it is likely to be on issues that maybe now are unthinkable of. The areas of danger that I see at the moment, on top of the international tense situation, is the inflated bond market and pending movements from the EU on cutting/limiting quantitative easing.

Portfolio is gearing up to enter the latter part of the year, September has been a good month and the average net yield of the PF  has surpassed the 2% mark that I originally set in 2014 when I started (we are now around 2.4%). Also some options that have been rolled for a long time SEEM to get to a point where I can exit the trades, which is positive of course.

 

 

 

 

 

 

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2 thoughts on “September 2017 Update

  1. Mitico Stal, complimenti per i tuoi risultati con le opzioni (lo sai già che questo discorso mi interessa parecchio), anche i dividendi viaggiano alla grande: se non sono indiscreto, ma quanto ammonta il tuo portafoglio per dare dividendi di questa levatura, anche perchè non lo ho trovato da nessuna parte.

    ciao – leguf

    PS1 Ogni tanto qualche errore ci stà, fa parte del gioco, l’importante è trarne degli insegnamenti per il futuro.

    PS2 Tantissimi auguri per il tuo matrimonio.

    Like

    1. Ciao Leguf, grazie per gli auguri ed il commento! Le opzioni proseguono verso il loro cammino e con questa nuova strategia dovrei avere meno movimenti ed un rendimento medio MINORE (ma anche meno rischi), ma va bene cosi. Per il NAV siamo intorno ai 318K se non sbaglio, i rendimenti che vedi sono tutti calcolati come se avessi comprato quote del fondo a prezzi differenti (anzi non “come” è esattamente cosi).
      Ciao ciao
      Stal

      Liked by 1 person

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