May 2021


A General Overview

And May came.

This has been a rather difficult month for personal reasons, while on more general related matters it seems that things are falling in place once again and we are heading towards a re-found normality.

Covid is still present but thanks to the weather, and in second place to the vaccines numbers are collapsing. This is great news, everything is open for business again, sun is shining, temperatures are rising, there’s not a cloud in the near term horizon.

It’s already a great time of the year May, but with this confidence boost it’s even better!

The situation seems to be improving all over the world, and finally the media are talking less about the virus and are starting to concentrate on other issues.

Thanks to a better weather we managed to go out a little, the picture up here won’t probably say much to a reader who’s not from Tuscany, and even then it has to be a reader who’s got knowledge of the city of Livorno, where the shot was taken. (it’s a famous local food place in the center of the city called Gagarin).

The personal side of things has not followed suit. First there was a family loss, my father in law passed away for an undiagnosed condition that he suffered from. All happened very abruptly, in the space of 10 days, and of course that left us in a difficult spot to stand, because you are never ready to see loved ones go, but it makes it harder because you were not allowed to say any goodbyes.

It’s the circle of life, when my mother passed away several years back, I have learnt to accept it, but it’s never easy especially for the other members of the family.

Then came work. We were kind of hoping that we could start our new post-covid semester in September, and yet again we were gutted. Apparently the state of NY decided to block all study abroad till January, and there it goes: no income in 2021 is becoming a reality… I am moving to open up new opportunities in other schools, hopefully I can get something confirmed soon. still, no good news, especially because we were not expecting a decision like that.

Last but not least May is tax month. On top of the taxes rightly due I’ve received a letter from our Tax Agency related to the fund that I have with Interactive Brokers. Despite the fact that I pay a specialised accountant to do all the tax calculations, which should make me feel “safe”, I still feel pretty anxious about it, I hope that this story can be done and dealt with soon…

Could have been a better May all in all!

LH FUND

Explanation of terminology and graphs is HERE.

Let’s see the numbers:

MonthTRYTERNYYoCForex
31 Dec 20140.00%0.00%0.00%0.00%
31 Dec 2015-3.33%1.22%-0.13%-1.00%
31 Dec 20167.06%1.14%1.16%-4.35%
31 Dec 20179.94%1.04%2.64%-5.94%
31 Dec 20183.28%1.24%2.70%-3.53%
31 Dec 201923.50%1.35%2.72%-1.40%
31 Dec 202015.76%1.28%2.70%-7.60%
Jan 202115.52%1.27%2.71%-7.03%
Feb 202117.42%1.26%2.71%-6.69%
Mar 202125.19%1.24%2.67%-4.85%
Apr 202124.93%1.23%2.69%-6.98%
May 202128.02%1.24%2.76%-8.12%
LH Portfolio Milestones + Monthly current year

TR is increasing (vs. previous month) – Absolute record for the portfolio TR hasn’t been that high before!

YTER is increasing (vs. previous month) – 1BPS increase, it looks like we are hovering there around 1,24%. Taxes have not been accounted yet, so this figure is going to grow, alas…

Net Yearly YoC is increasing (vs. previous month) – Not an ATH, but getting there a 10BPS it’s a lot!

Forex is getting worse (vs. previous month) – Dollar is weak, pound too, over 100BPS difference is a lot, but that’s the way things are.

Dividends and Options

April income was 3286 Euro

Dividends accounted for 3180 Euro (+47% vs 2020) and Options ended up with a 106 Euro score (N.A. vs 2020).

Dividends

Wow, this is a major milestone. Entered 3K territory, with dividends only! In 2016 an 2017 I managed to get there but there was a massive coupon from a bond that I had back then which did the trick. So what happened? Well May is a dividend rich month already, to make it richer there were several special dividends from companies that suspended payments during covid last year. Very happy with this result!

Options

Low volatility and markets always pointing higher don’t help options. Put inside a minor loss that I had to take on a trade and the result is there. Nothing to complain about, because positive territory is alway good, but I don’t expect much action in the coming months if market conditions stay like this…

DCA/Increased Positions

Nothing to report

New Positions – Sold Position

Bought 200 ENIA @ 7.05 EUR

Enel South America is an energy provider that covers the region. I have to admit that I had a lot of trouble doing Due Diligence on them, and the quality of the information that I’ve got was quite poor. In hindsight I should have read reports in Spanish, will start doing it now that I am a stock holder. The story here is again a buy/write to capture dividend, get out of an option trade that I didn’t like and sell calls monthly. I am not going to cry if this stock is called away, but even if it stays in the PF is fine, as I am not exposed to utilities in that region.

The Financial Conclusions

We spoke about Italy, Europe and me, now time to talk about the portfolio and the economy.

The portfolio is “fine”, growing as we speak, producing income, recording more records, no complaints about it. Of course being at an age of “accumulation” I would much rather for it to be in bear mode rather than bullish. May 2021 was a record month for dividend collected, although I see more and more that there is little point in reporting single months, it might be better to add a quarter view as well, as from year to year dividends get moved in terms of when they are paid.

Options, that should provide that “extra income” unfortunately are somewhat depressed, I have to accept AROI on some trades below 10%, which was a barrier for me in the near past, but there is no way around it, and I need to adapt the style according to market conditions.

On the other side I am not able to find any opportunity worth investing it, and this opens up the discussion on current market situation.

I still think we are very very frothy in terms of market values, recovery is now in full fledge and people are happy. Money has been thrown on the table, work is back for many, who doesn’t have a job is subsidised by the state. The amount of liquidity that was added to the economy found its way back into the stock market, creating “that perfect bubble conditions” where people invest, see their values skyrocket, believe they are rich, start spending above their means and… you know the rest.

I am not saying that everyone is like that, but seeing newspapers talk about the return to Austerity policies in 2023 for the EU and NOBODY giving a damn about it, says it all.

Winter is coming, debt will have to be addressed, a way or another. Growth will slow down after these months, we are living a “boom” but these rates are hard to maintain.

I do not want to sound like a greek Cassandra here, I am just trying to be real about the situation at hand. This explains why I am having real troubles entering the market now.

One thought on “May 2021

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