November 2019

General Comment

Sicilian Oranges and Tangerines

Oranges. I think this has been the food related highlight of the month, buying oranges and the likes (lemons, tangerines and so on) from Sicily, directly from the producers sites. Disintermediation they call it, it’s part of the new leverages of modern economy.

The idea of putting producers in touch directly with the consumers is quite great, should guarantee a better economic treatment for the people who make things and better prices for the ones that buy. All in all the only looser into this equation is the middleman, which here in Italy is getting the biggest share of the profits when selling produce and food.

This is to introduce the major changes in the financial world that come from the US, where brokers apparently decided to stop charging commissions on trades, a classic example of intermediaries getting less profits.

November saw quite a rally in the stock market, it’s really hard to find trades to place, it seems that everything is generously valued (read: overvalued) and it’s hard to “pull the trigger”. It’s ok to take a pass I guess, but knowing my weaknesses patience is certainly one of those! A classic case for personal growth I guess 🙂

I still think that the markets are quite stretched, but it’s also true that apart from the usual rumors on the USA-CHINA trade deal there aren’t other catalysts that point towards a recession or an impending crisis. Having said that, it’s also true that a crisis comes unannounced…

LH FUND

Explanation of terminology and graphs is HERE.

Let’s see the numbers:

MonthTRYTERNYYoCForex
12.140.00%0.00%0.00%0.00%
12.15-3.33%1.22%-0.13%-1.00%
12.167.06%1.14%1.16%-4.35%
12.179.94%1.04%2.64%-5.94%
12.183.28%1.24%2.70%-3.53%
1.199.76%1.26%2.69%-2.75%
2.1912.02%1.24%2.69%-1.95%
3.1914.86%1.22%2.70%-1.21%
4.1916.86%1.21%2.83%-1.87%
5.1912.73%1.22%2.81%-2.42%
6.1914.41% 1.44%2.64% -3.17%
7.1916.13%1.43%2.66%-2.74%
8.1915.82%1.41%2.66%-1.98%
9.1919.11%1.39%2.75%-1.09%
10.1919.80%1.37%2.68%-1.79%
11.1922.80%1.36%2.71%-0.33%

TR is increasing (vs. previous month) – November rallies, Long Haul Portfolio follows suit.

YTER is decreasing (vs. previous month) – Not a lot of trade activity this month helps in reducing this figure. It’s good news after all, no complaints.

Net Yearly YoC is increasing (vs. previous month) – Not bad, a small recovery in November for this metric which is one of the most important to me. It’s clear that hitting the 3% target this year it’s going to be impossible, but it would be good closing the year growing back towards it…

Forex is getting better (vs. previous month) – What a rally! Well, pound keeps recovering and so is the dollar, almost at parity with my average exchange rates, good stuff…

Dividends and Options

November was a good month for the markets, and I have to say that also the LH Portfolio performed decently, given the fact that I had some bad trades to close at a loss.

October saw a 1695Euro result.

Dividends accounted for 1390 Euro (-12.8% vs.2018) and Options ended up with a 305 Euro score (+3.69% vs 2018).

Let’s see what got us to these results…

Dividends were below last year, but that’s mostly because last year I have had an extra dividend from Standard Life which bumped up the score by 300 euro… So technically this year was better, despite the lower score.

Options did quite well, I have had to protect some trades and roll some others, managing to close ahead of last year it’s already a great result!

List of Options closed in October

DCA/Increased Positions

Nothing to report

New Positions – Sold Position

Bought 50 LON:CCL @ 31.80 GBP

Carnival is the world leader in leisure cruises, they own and operate the fleet and have clients from all over the world. Dividend appears to be well covered, they are suffering from a slowdown in sales. I am not too worried about it, it’s a cyclical stock and since I have had to let go of LON:GNK (because it was delisted after being acquired by another company) I opened up again some exposure to the consumer cyclical sector in the UK. Different industry of course.

Sold 290 LON:GNK @ 8.5 GBP

Greene King was a very interesting company, pubs and hospitality in the UK, good dividend history and performances. Apparently I wasn’t the only one thinking along this way, it was subject to a M&A bid and was bought off at the end of November. I made a decent profit out of it, it’s a shame to see it gone, but no complaint there!

Sold 10 FRT-C @ 25.50 USD

Tested this Preferred to see if it was an interest payment or not. It wasn’t an interest payment (so I get double taxes on it), so I let the 10 stock go.

Conclusions

Nothing much on the trade side of things, November was an heavy month for personal reasons, with parents and in-laws having to go to the doctor a lot, with my wife restarting work (and me becoming an almost full time “mum” with the little one at home).

Markets were buoyant, December is going to cap this year off, in a positive way I believe, in the end 2019 was a bull year, if all things are confirmed.

For a DGI investor at my age, this is not exactly great news, because I don’t get to deploy all the capital buying stocks on the cheaper end of the spectrum, but as I said many times a crisis is something inevitable I am afraid, so it’s just a matter of time… Let’s hope it’s not going to be too heavy!

I am reading that banks are keeping liquidity on the high side because they are unsure of what might “come after” this bull ride that we have had so far. They are trying to control the world’s economy to enter a recession is a slow and controlled way, so that it doesn’t create havoc… Let’s see if this is what they are going to do or not, it’s sure that the intervention of central banks has helped markets stay this high for this long.

5 thoughts on “November 2019

  1. Beware of Carnival. It is a major climate polluter and is a target for green activists such as Extinction Rebellion – do you have the equivalent in Italy? The fund managers are all under pressure to be more responsible in their decisions so this may be a factor for recent poor performance?

    Liked by 1 person

    1. Ciao DIY,
      Thanks for stopping by! I have to say that I have overlooked this aspect when doing the due diligence on CCL, I might have to check that up again. As far as activists are concerned, we have plenty, but I did not hear of these Extinction Rebellion group. Surely there is a shift towards more sustainable policies, from all the companies across the board (oil included!), but I don’t think that it’s because of this that they are doing poorly, they have 15 million clients around the world, a great part of them are from areas where the environmental issues are not that strong yet…
      In general I am a bit fought with the whole environmental issues, it’s the topic of the future (and of the present as well), so I am looking at more sustainable businesses too, but more on the energy side of things. The only problem that I have is that prices are so high at the moment and most of the companies are in the US…
      ciao ciao
      Stal

      Like

  2. Thanks Stal. I think it will be increasingly important to consider climate responsibility when making investment decisions in the future…the likes of Greta Thunberg will not be going away!

    Here’s a report (one of many) highlighting the problems with the cruise ship industry in general and Carnival in particular…

    https://www.euronews.com/2019/06/10/carnival-cruise-ships-produce-more-sulphur-oxide-than-all-europe-s-cars-analysis-claims

    Best wishes for the holidays!

    Liked by 1 person

    1. Thanks for the link I’ll check it out immediately! Yes I agree the likes of Greta are not going away, and they are right not to move away.

      Best wishes to you too and have a great holiday season!!

      Like

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