August 2020

General Comment

August is a special month here in Italy, as most of the people normally have their holidays.

This year the situation was a bit different, COVID and holidays are not exactly two things that go well together.

Having said that, thanks to some state intervention and some savings Italians did go on holidays, local tourism in most cases, but still some holidays took place.

Of course average spending went down, instead of the “usual” 3 weeks of holidays the average holiday time was reduced.

Stuck for cash (from September I am going to join the vast army of unemployed here in Italy) we managed to organise a quick trip to a location near Florence, where we rented a house with pool for a week together with other 2 families.

This proved to be a good way to still enjoy at least 7 days away from home, and be a bit more conservative with the money spent. The solution that we adopted was rather nice, and we’ll be looking at doing it again in the future for sure (covid or non-covid, doesn’t matter).

Either than that, reports of a new wave of contagions are surfacing in Italy too, by the end of August daily numbers were on the rise again.

It’s evident that people want to go out and be “social animals”, as it’s in our DNA to be. On the other side this virus is far from over and we still need to be careful.

September is going to be an interesting month, our son is scheduled to go to kindergarten, hopefully it will all work out well and he likes it.

I have to admit that these months have been pretty heavy under the “toddler management” point of view, especially because it monopolises all attentions and this means that I have very little time for research and most importantly look for other job opportunities.

As usual time will tell!

LH FUND

Explanation of terminology and graphs is HERE.

Let’s see the numbers:

Month	TR	YTER	NYYoC	Forex
12.14	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%
12.18	3.28%	1.24%	2.70%	-3.53%
12.19	23.50%	1.35%	2.72%	-1.40%
01.20	21.13%	1.36%	2.65%	-0.45%
02.20	13.04%	1.35%	2.67%	-0.63%
03.20	-5.82%	1.27%	2.51%	-0.12%
04.20	0.91%	1.26%	2.49%	-1.72%
05.20	4.68%	1.26%	2.53%	-2.14%
06.20	5.82%	1.36%	2.52%	-3.14%
07.20	3.92%	1.34%	2.56%	-5.59%
08.20	6.18%	1.33%	2.57%	-5.92%

TR is increasing (vs. previous month) – Quite a jump in TR this month, August proved to be quite good for the markets, so here we go up again.

YTER is decreasing (vs. previous month) – Not much activity to report, means not many commissions to be paid to brokers, so that’s good, lowers total costs of the PF.

Net Yearly YoC is increasing (vs. previous month) – Lower costs translate in higher Net Yield, options and dividends did their part and it’s good to see an increase in this metric!

Forex is getting worse (vs. previous month) – The dollar is continuing its downfall against the Euro, this is the main cause of a lower result in this area.

Dividends and Options

Big summer festival or bleak covid-19 lockdown? How was August after all? Let’s check the numbers!

August income was 1168 Euro.

Dividends accounted for 989 Euro (-2% vs.2019) and Options ended up with a 179 Euro score (-15% vs 2019).

Unfortunately the dividend stream is negative this month too, despite it being a rather small decrease, it’s still a decrease. Nothing much to say here, exchange rates surely had an impact, but that’s part of the game.

Options on the other hand had a bit of a slowdown, mostly due to the fact that prices have been rising constantly and it’s harder to sell PUT contracts when stocks are rising. Still, a positive contribution is always welcome to the fund, and this month too I’ve managed to get results above 1000 euro.

Options positions as of end of July

DCA/Increased Positions

300 BIT:ENAV @ 3.57 EUR

Dancing on a support for the whole month, I’ve decided to increase my shares in ENAV, Italian authority for flight control.

New Positions – Sold Position

Bought

100 CWCO @ 12.10 USD

Consolidated Water is one of those companies that I have been following since 2019, and never got around buying. What got me interested in this company is mostly what they do. Desalination and water purification. I am on the lookout for more water related stocks to add to my PF, the problem with them is that the yield is very very low and in the end I never get around to buy them. CWCO is probably one of the highest yielding (on top of being rather small as a company), thanks to the recent pullback I could add it.

Conclusions

So how did markets do?

Well, there is very very very little to say. August has been terribly boring, marketwise. It seems that the stock markets have only one direction pinned in their minds, and that is going up.

Tech is driving the rally, but apart from the “usual suspects” (Tourism, Hotels, Airlines) all the rest is pretty much following suit.

I guess that the presidential elections in the US might bring some volatility to the table, on top of this Autumn and Winter might prove quite harsh for Main Street and we need to see if this is going to affect Wall Street too.

I remain quite cautious on the current situation, there aren’t many opportunities that I can see at the moment so I’ll keep working on the options to raise some extra cash.