February 2018 Update

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General Comment

The shorter month of the year brought the first “serious” market correction in recent history, this event broke the spell of “never-ending growth” that seemed to have caught a lot of investors. Recent performance was so good that a lot more people got attracted by stock investments of late,  this is one of the first signs that maybe we have reached a point fo a potential retrace.

I still think that economic fundamentals look pretty good, worldwide, but it’s clear that fear has entered the market and it seems to me that investors are looking at negative news with much more pathos than what we had before. As a result we are seeing not only an healthy correction, but also a greater level of volatility in the markets.

As a personal note, my university courses have started and as any new job there is a quite important amount of stress to go with it. But all is good so far, so no complaints there. I am also working on two side ventures, work related, that might get me to become an entrepreneur (but nothing is set yet), and an internet related project that is proving to be a great experience already, even though nothing has been finalized yet.

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% 1.06% 2.66% -8.34%
2.18 6.13% 1.06% 2.66% -7.41%

TR is falling (vs. previous month) – Expected, market corrections tend to affect total returns! 🙂

YTER is flat (vs. previous month) – taxes are coming in March/April, so I expect a jump here, but all in all it seems that everything is under control.

NYYoC is flat (vs. previous month) – As this is annualized, although I have had income from dividends and options, the extra month returned a stable figure compared to January, no major worries here, although I expect this figure to rise towards 3% by the end of the year.

Forex is down (vs. previous month) – Currency Effect is worth -7.41%, 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

February was quite low key with a 899 Euro turnover. But it’s a story of two different tales.

Dividends accounted 542 Euro (+141% vs.2017) and Options ended up with a 358 Euro (-141% vs 2017).

Dividends on the rise, Options keep weighting results.

Options- wise selling long calls will reduce the income that I made last year, so I need to compensate that with dividends, plus recent market swings have resulted in positions being underwater in a very short amount of time, and this means rolling and taking current account losses as a result. As usual nothing to be worried about, it’s all under control, numbers will start picking up pretty soon, certainly in the second part of the year I should get more profits from the options.

List of Options closed in February
Screen Shot 2018-03-03 at 10.19.18
DCA/Increased Positions

Bought 26 BME:ENG @ 22.65

One of the few European “stable” dividend payers, as stock quotation was -20% from my average price the buy order was passed. Unfortunately I timed my entrance so badly, the stock collapsed the day after. i now have 100 pieces to trade options, but must wait for a recovery first, in the meantime I am collecting dividends, which is great.

Bought 25 EPA:SAN @ 71.50

Sanofi is one of the biggest pharma in Europe and a stable dividend payer. Exploiting the drop in price due to the correction I have got another 25 shares. Might considering adding more to reach 100 pieces in the PF to trade options, but haven’t got around doing it yet…

Bought 100 SO @ 44 USD

An option assignment, this puts back my average price to 46.5. SO is a great company, I believe that current valuation is quite low, so I let the option being assigned without rolling it. Plan is to start selling calls when price picks up a little bit more.

New Positions – Sold Positions

Bought 200 BIT:BEC @ 10.50

B&C Speakers is now a reality in the Italian mid size caps, especially when dividends are discussed. A producer of professional speakers drivers, market leader worldwide of a very small industry, B&C is based in Florence where I live, so let’s say that I know about it also from other sources than the usual stock related press. A lot of cash, a very well run factory, new developments every 6 months and an acquisition strategy that is second to none, all reasons why I have decided to invest in them.

Options Plays

Nothing to report


Conclusions

One month ago my yearly target was set at 25000 euro, between Options and Dividends. Having seen the second (quite disappointing) result of my options trades I think that I’d be happy with matching the same result as last year. The real target it’s still dividend growth, the moves that I managed to do in February thanks to the market correction should provide extra income, above the average 2% mark that the portfolio returned so far.

It’s not going to be an easy year, but with a good plan, being consistent and focused I am sure that I can post good growth also this year. Time will tell of course, but I keep a positive outlook!

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5 thoughts on “February 2018 Update

    1. Ciao ATL,
      It has been a very busy couple of months recently, I can barely write or comment on other bloggers posts and struggle to follow my writings as well. Yes, workwise things are “picking up” slowly but they are starting. It seems that I am very busy doing lots of things that at the moment are not really producing income, but they may do just that in the future, so I’d say that I am “sowing” in this first half of the year…:)
      Ciao ciao
      Stal

      Like

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