July 2018 Update

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General Comment

I have spent most of July working on a new course that I will start in September. Teaching is something that has been in my family since I was born as both my parents were professors, but it is not until I started doing it constantly that I can see how hard it is. There is a lot of work to be done before the actual classes/tests, and considering that information is quite easy to get nowadays you cannot go half-assed prepared to a class, you risk to ruin your reputation over some wrong assumptions nowadays!

Either than that, the month was pretty uneventful, investment-wise all was quite calm, stock markets sway like “the spring sky” (quoting a Japanese saying about the heart of women), international politics seem to be a catalyst for these mood swings most of the times.

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%
5.18 8.89% 1.36% 2.68% -4.42%
6.18 9.16% 1.35% 2.65% -4.91%
7.18 10.60% 1.34% 2.67% -4.74%

Net Yearly YoC is increasing (vs. previous month) – Archived the bad results of June (under the options point of view) the PF started growing again. Pace is somewhat slow but that is due to the fact that option results are slower this year, so dividend growth is the major driver at the moment. My prediction is that pace will change in the last quarter of the year, as some option contract should expire. We’ll see…

TR is increasing  (vs. previous month) – Total Return broke the PF record this month! Entering double digits at the end of the month (double digits were touched several times before but didn’t make it till the end of the period) 

Forex is getting better (vs. previous month) – Dollar gained strength but the pound is getting weaker over Brexit, so in the end the situation got a little bit better but not so much. The PF still looses 4.74% just on exchange rate woes.

Dividends and Options

Pretty much like June 2018, July 2018 had the difficult task of trying to beat a stellar performance from July 2017. This time it was not on the dividend side of things, but rather on the option side. Yes, in 2017 the tally that I’ve got from options was a rather fantastic 1126 Euro, impossible to get this year having changed strategy altogether. But things were not that bad after all, dividend income is on the rise and as we know that’s the main target of all my financial endeavours…

July closed with a 1008 Euro result.

Dividends accounted 911 Euro (+24% vs.2017) and Options ended up with a 97 Euro (-91% vs 2017).

A month above 1000 euro is always a good month at this present stage, so I cannot complain about the result. Historically summer months have been quite low in terms of income for the LH Portfolio.

List of Options closed in June
Screen Shot 2018-08-04 at 10.00.18.png
DCA/Increased Positions

None to report

New Positions – Sold Positions

 

Sold 50 NESR @ 70.60 EUR

I almost can’t believe another one of my very first stocks, one of those stocks that I’ve bought in 2014, has left the portfolio. Well it was my decision after all, so no complaints there, there are perfectly good reasons.

Nestlè was sold with a rather modest 10% appreciation from my average prince and 4 dividends. The issue with this stock is mostly to do with taxes, Swiss and Italian taxes destroyed yield on Nestlè which was actually getting me less than 2% net. I was hoping in some capital appreciation, but that did not come, 10% in 4 years is really low. Lastly, Interactive Brokers now pays the dividends in CHF, a currency that I am not planning to trade, which means that the little dividends I was getting had to be exchanged back to Euro, with additional fixed costs. It just was not worth my time and money, so at the 10% mark I let it go.

Bought 160 BIT:GIMA @ 13.25 EUR

GIMA TT is a company in Italy that creates and sell machines to automatically pack anything that has to do with cigarettes and e-cigarettes. It’s part of a bigger group called IMA, world leader in automatic packing of many goods, from food to household products passing by vending machines and stuff like that.

GIMA posted a very good half year report, but has been under pressure as its clients are tobacco companies that recently did not do too well. I think that at this level it’s quite undervalued, and with a net dividend of 2,4% I thought that it was a good move to switch from Nestle to GIMA. The company is growing really fast, recently entered the Chinese market and has NO DEBT whatsoever on top of stellar margins on the products that it sells. Of course is not a huge company like IMA or Nestle, but the rationale into this move is that I hope that capital will appreciate together with a growing dividend.

Options Plays

Nothing to report


Conclusions

July was a calm month, compared to March/April for example. I am following the Brexit developments in a closer way as I think that whatever happens there will send pretty serious ripples through the economic community, uncertainty is never that great for the markets. Yes, the market. It seems that last month confirmed the feeling that it moves with the news in very violent ways, a point to keep in mind this one.

The Portfolio is entering the second half of the year, where most of my options are going to expire, so technically the ground lost in previous months should be recovered a way or another. Target is to have a net yield of 3% by the end of the year, doable but quite difficult!

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2 thoughts on “July 2018 Update

  1. Interessante l’acquisto di Gima TT. Io ho Ima da parecchi anni e sono veramente soddisfatto. La comprai a 13,50 e ho alleggerito vendendone un 30% l’anno scorso a 80 perché stava diventando troppo pesante nel mio portafoglio.
    Gima è scesa parecchio ultimamente e il prezzo sta diventando interessante. Dici che sarebbe il momento giusto per un acquisto?

    Like

    1. Ciao Lore,
      Come sempre dare un parere è difficile. Per me l’apertura di una posizione a questi livelli è da fare. Il titolo ha scontato parecchio ultimamente, non ho ben capito perchè dal momento che i dati sono tutti positivi. Forse l’IPO era stata troppo alta, ma secondo me il target 18 euro che da qualche analista non è poi cosi sbagliato. E’ una piccola azienda alla fine, e questo non aiuta nelle quotazioni e negli swing di prezzo, ma come trade si allinea al mio acquisto di B&C ad inizio anno, dato che comunque sono alla ricerca di qualcosa che possa anche garantire la crescita che per esempio IMA ha dato a te. Se compro solo player maturi ovviamente questo apprezzamento non ci sarà…

      Liked by 1 person

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