January 2018 Update

General Comment

First month of the year is already gone!! It really seemed like it flew past me at incredible speed. Probably it was the fact that I have recently started working as a Professor and all the excitement, anxiety, hopes and all sorts of other emotions that went into this new venture made time fly by.. Here we are anyhow.

The beginning of the year brought a mixed month with signs of slowdown from markets, at least from the sectors where I am exposed the most. This was actually a good opportunity to start looking at some stocks again, draining money from the options trade and moving them into dividend paying stock which are still the core of the portfolio strategy.

LH FUND

Explanation of terminology and graphs is HERE.

Let’s see the numbers:

Month	TR	YTER	NYYoC	Forex
11.15	0.00%	0.00%	0.00%	0.00%
12.15	-3.33%	1.22%	-0.13%	0.00%
12.16	7.06%	1.14%	1.16%	0.00%
12.17	9.94%	1.04%	2.64%	-6.60%
1.18	9.06%	1.07%	2.64%	-8.34%

TER is on the growth compared to last month, some costs to the accountant that follows the LH Fund had to be paid-

NYYoC is flat, all growth covered by the increase in YTER.

Forex – Currency Effect is worth -8.34%, which means that if tomorrow currencies go the the average price to which I bought them TR will increase by this amount. So here we are losing quite a bit thanks to the strength of the Euro.

Dividends and Options

January sets the start of the year with a massive 1425 Euro turnover.

Dividends were 1568 Euro (+184% vs.2017) and Options counted for -143 Euro (-95% vs 2017).

Dividends returned a marvellous result, thanks to some special dividends paid by ORI and BKE that really put up the score. I would have done better than 2017 without them too but not THAT much.

Options on the other side almost doubled the loss that I did at year start in Jan 2017, this result has an explanation, mostly to do with an option that I had to roll on VTR where I was badly deep in the money. I will recoup this loss later in the year but coupling the loss with the fact that I have reinvested most of the capital that I used last year to trade options, there wasn’t enough trades to even the loss. 2018 is going to be a slow year for options. Plus the change of strategy with selling long calls means that I will cash them in later during the year, and much less than what I’ve got last year with more active trading. It’s just a matter of time, when I will get rid of some of the losing positions that I am stuck with active trading will be featured once more!

List of Options closed in December

DCA/Increased Positions

Bought 100 BKE @ 21.60 USD

Pure dividend play, sold a buy write option on BKE to collect more dividend (special dividend was 175 dollars!). Will sell it at a loss in June as the option that I sold it’s in the money, but it’s part of the trade that I set up. So far I am happy with the outcome.

New Positions – Sold Positions

Bought 100 O @ 53.99 USD

I had them a long time ago, and I let the stock go for a mediocre capital gain. Using the moment of weakness of REITS and Utilities to buy more positions, the company is stellar and I am not concerned about performance in the short time. Happy to be on board again it was a missing piece in the “collection”.

Options Plays

GIS play ended with a modest 4,27% gain, it was not one of the most inspired plays but the stock rallied and the options I had got called upon dividend. Not worried about it, 4% it’s still ok and freed up money to enter in O this month.

Conclusions

January got the LH Fund to a rough start, but it’s still pointing towards positive lands and this is important. Dividends are increasing as planned, options will be slow this year unless some capital is freed but that it’s likely to happen in the second part of the year. We will have to wait and see on those. I do not mind a bit of a cooldown of some sectors, but signs are certainly not the ones of an economic crisis, so I would expect bulls to roam around in months to come.

Targetwise I hope that I can reach 25000 euro between dividends and options, without adding anymore capital. It’s going to be a difficult one but it would be great to reach that target.