April 2018 Update

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General Comment

One more spin of the wheel! Yes, my birthday came and reminded me that “tempus fugit” (Latin for: time flies), it seems yesterday since I was living in England or Japan, and instead 20 years have passed already… Bloody Hell!

ANYHOW… Amarcord mode “off”, what happened in April in the financial markets and to the LH Portfolio?

The final result MoM is a positive one, as it seems that the two months correction that we just lived has passed. I would say that surely some stocks seemed to have regained traction, while other are still pretty much underwater, but in general, also thanks to some geopolitical events (North Korea above all, but also Trump not finalising import tariffs), it seems that the correction came to a stop.

I use conditional because anything can happen to mess things up,  and because volatility is still pretty high, meaning that sharp movements are still possible.

University came to a close, and I was offered a second course in September. This is positive of course, the negative is that the subject I am to teach is not exactly what I have done before, so I need to study something new from the start, plus I will be stressed like hell when I get to teach it. But I will give it my best shot, I had no other offers on the table so it’s good that I managed to jump on something.

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% -1.00%
12.16 7.06% 1.14% 1.16% -4.35%
12.17 9.94% 1.04% 2.64% -5.94%
1.18 9.06% 1.07% 2.66% -7.40%
2.18 6.13% 1.06% 2.66% -7.95%
3.18 5.85% 1.04% 2.81% -7.21%
4.18 9.02% 1.03% 2.90% -6.07%

TR is growing (vs. previous month) – Not only decrease has stopped, but I am almost back at the pre-correction levels, the PF is behaving “nicely” and the stocks that were under fire are now fighting back. A slight decrease in YTER and a good increase in the “Net Yearly YoC” means that the ship is pointing to the right direction. Part of the increase in this month is due to a better situation on exchange rates, as the Forex column shows.

NYYoC is growing (vs. previous month) – Dividends and Options did well in April, and got this index increasing for the second time in a row.

Forex is down (vs. previous month) – Another good sign, euro is getting weaker against Dollar and Pound, but compared to my average exchange rate we are still behind.

Dividends and Options

April was a good month with a 1801 Euro turnover. Unlike last month both Options and Dividends did well in April.

Dividends accounted 1055 Euro (+33% vs.2017) and Options ended up with a 746 Euro (+7% vs 2017).

Dividends keep growing on YoY basis, this is very very important because they are the cornerstone of this Portfolio, Options did well too, and I am quite happy about it considering the the change in strategy means a lower return YoY for sure.

So what happened this month? Options-wise nothing much apart from the fact that thanks to the increased volatility I managed to close and reopen some positions, netting some gain. This is something that can be done in a volatile market, in a more stable environment is quite hard to do. A huge boost to revenue was given by a PUT that was assigned early (VTR). This was something that I did not expected and could have done without because it actually increased my average price, but it’s part of the risks of trading options, so I have to live with that. On the positive side it represented 700 euro worth of gains, so no complaints there. (700 euros that I lost in previous months when I rolled this contract).

List of Options closed in February
Screen Shot 2018-05-05 at 11.08.31.png
DCA/Increased Positions

Bought 100 VTR @ 62.50 USD

Thanks to a short PUT that was exercised early I had to buy 100 VTR at 62.50… My strategy was much different of course (being that VTR was at 49 USD when the PUT went through), but I did not have the time to act. Early exercise is a risk that you always have shorting options, normally not 45 days before expiry like in this case, but it’s what happened and I can’t complain.

New Positions – Sold Positions

Nothing to report

 

Options Plays

Nothing to report


Conclusions

The market seems to have passed the correction phase in February and March, pointing towards more calm waters. I have started reading about the looming US recession and other doom predictions that come out in the press during these periods, but to be honest I cannot see any major signs of drama right now. It’s true that they do not “tell you” when a recession strikes, but on the other side it’s also true that you cannot live in continuous fear of something that “might happen”.

Tax returns are due pretty soon, that will get the PF to take a major hit, but again, I cannot do much about this right now unless I move to a different country, which is not on the cards right now…

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