December 2020


General Comment

At the time of me writing this, I can’t remember much of December 2020. Not because I’ve got hideously plastered over New Year’s Eve, but for a much less mundane reason: we’ve got COVID.

Yes, on the 9th of December we had to start a precautionary quarantine as our son’s teacher in kindergarten was tested positive. As my dad is not in “great” shape, due to many illness and a very recent hearth surgery, I decided to test myself for COVID and turned out to be positive.

I did not have any symptom at all, and neither developed any during my illness, but nevertheless I’ve had to “social distance” myself from the rest of the household locking myself in a room and pretty much leading the life of someone who’s put in jail.

After 10 days I tested negative and so all the rest of the family, so on the 27th December we managed to go out for a “car ride” all together, just to have a change of scene (Italy then was in “red zone” lockdown, meaning that all is closed and people cannot go out of their houses unless they have valid motives).

Our days were influenced by when Leo would go to bed and the highlight of the day was to decide WHAT to eat at the next meal, or writing a list of groceries to ask my sister or the neighbours to buy for us… Work-wise it was impossible for me to do anything remotely constructive, being at home with a 2 year old son all day sucks all the attention and concentration that you can devolve to anything else.

Leo turned 2 in December, which is great! Time really flies, it’s true.

So, that was my December, rather dull and boring, but we are all healthy and fine, so that’s the positive news! The world as a whole seems pretty much stuck with this covid19 virus still, despite all the great news about vaccines I believe that it will take much longer to write off this pandemic, we’ve got to be patient…

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%
12.1923.50%1.35%2.72%-1.40%
01.2021.13%1.36%2.65%-0.45%
02.2013.04%1.35%2.67%-0.63%
03.20-5.82%1.27%2.51%-0.12%
04.200.91%1.26%2.49%-1.72%
05.204.68%1.26%2.53%-2.14%
06.205.82%1.36%2.52%-3.14%
07.203.92%1.34%2.56%-5.59%
08.206.18%1.33%2.57%-5.92%
09.205.50%1.32%2.59%-5.45%
10.202.26%1.30%2.53%-4.92%
11.2013.51%1.29%2.62%-7.56%
12.2015.76%1.28%2.70%-7.60%

TR is increasing (vs. previous month) – After the November boom, I wasn’t expecting a lot more growth, but here it is 🙂

YTER is decreasing (vs. previous month) – Another little bit off this metric, good news!

Net Yearly YoC is increasing (vs. previous month) – 7BPS it’s another very good increase. We are still far from the 3% target but…

Forex is getting worse (vs. previous month) – Strong Euro = less potential returns for the portfolio…

Dividends and Options

December income was 2746 Euro

Dividends accounted for 1334 Euro (+29.6% vs 2019) and Options ended up with a 1412 Euro score (+1764% vs 2019).

Dividends

After the big disappointment of November results, December actually brought some unexpected surprises! And with surprises a great result that kind of brought back the ship on course on the YoY comparisons (more on that in the usual Year End post, later). In reality it was all down to BKE (The Buckle) who decided to anticipate the special dividend that they normally pay in January to December. And what a special dividend it was, 400$ in one shot, changed the month completely. In the end I managed to post a substantial growth vs December 2019, despite currency headwinds.

Options

Solid month, closed two positions that I’ve rolled previously (MMB and CINF) this means a higher gain posted, but all in all it was a very good month.

Options positions as of end of December

DCA/Increased Positions

Nothing to report

New Positions – Sold Position

Nothing to report

Conclusions

I’ll cover more year/future related issues in a later post about 2020, so I’ll keep my focus on December only. This was the first month since January 2019 that I did not perform any stock movement whatsoever (sell, buy, corporate action, whatever). I’ve only managed options.

This goes a long way into showing that I am having a lot of difficulty to find something to invest in, apart from some occasional speculations on derivatives. After all December brought another flurry of good news: vaccines approved, more stimulus from almost every government are among the best two, and markets reacted accordingly.

So it was time for me to take a step back, and I am actually evaluating my future actions now, is it time to change strategy, or do I have to second the feeling I have that “winter is coming” to quote the famous line from GOT?

Right now we are navigating through lots of easy case, low interest rates and conditions that do not favour any inflationary pickup. In this environment the stock market keeps on giving, because returns that are half decent can only be found there, but for a Value investor like me, this means that opportunities are really really scarce. Of course I could start considering lowering the bar, and introducing companies that have fundamentals that I don’t particularly love, but I have done that already in the past with very bad results, so I prefer to wait for better opportunities.

One thing I know for sure is that 2020 will weight heavily on future years, and it’s now the time to think how to readjust strategy and scope, economically I feel that we are at the end of a macro-cycle.

As usual time will tell!

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