January 2022


A General Overview

Very very very late… But here nonetheless! Renovations at home are entering the final stages, University started again at full throttle (a great thing of course), and kids being kids require a lot of management.

Having only 24 hours available, I am working at night, as during the day I am taken by too many other things that need to be taken care of, plus I do not have the right environment to write lectures and tests… I need calm, peace and above all silence.

I have now switched to the “one day at the time” philosophy, a way of living that doesn’t belong to me at all, but that it’s the only way I can cope with the complexity that I am living through since October. I feel that holding on a little bit more things will turn for the better, surely renovations will end, furniture will arrive, menial problems will be solved. At least that will be off my plate! In the meantime I have only very little time to update the site, that I was already updating very little, if there is still some reader out there, bear with me…

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%
31 Dec 202137.13%1.35%2.69%-2.05%
Jan 202235.83%1.34%2.61%-2.75%
LH Portfolio Milestones + Monthly current year

TR is decreasing (vs. previous month) – Welcome 2022! We start in the red!

YTER is decreasing (vs. previous month) – 1bps but it’s still a decrease in my books…

Net Yearly YoC is decreasing (vs. previous month) – What happened? 8bps on this metric are a lot…

Forex is worse (vs. previous month) – Wow, 4 reds out of 4… that’s a record there…

Dividends and Options

Income this month was -1539 Euro

Dividends accounted for 891 Euro (+13% vs 2021) and Options ended up with a -2431 Euro score (-1362% vs 2021).

Dividends

Nothing to say about this January, increasing numbers are good, a double digit growth vs last year it’s quite a result, for a portfolio that is now looking at the 10year mark as a not so distant landmark.

Options

What can I say? When I say that options are dangerous… Even trading in the most “safe” way you are never really protected by potential huge losses…

DCA/Increased Positions

Bought 100 CWCO @ 10 USD

Got the shares through short PUT option that expired ITM. Happy with this entry, but I won’t be adding more shares of CWCO.

New Positions – Sold Position

Bought 100 AMS:PHIA @ 29.5 EUR

Philips is a well known brand in Europe, and now that it’s a pure biomedical play (they sold the consumer electronics branch), it’s even more interesting. Thanks to issues in the US and a profit warning due to production delays price has gone down substantially, and now I am trading PHIA through options. Happy to have 100 pieces in the PF though, PHIA is a dividend Aristocrat in Europe, so despite then low dividend yield is a position that I might hold for some time.

Bought 100 FRA:ENR @ 21 Euro

Another stock that I owned (sold at 31 some time ago), but now I possess again thanks to a short PUT option that expired ITM. Not planning to keep this position, but will manage the eventual sale through short CALL options.

The Financial Conclusions

So what happened in January? Posting low returns is fine, but 2k++ Euro loss is quite strange for a portfolio like this.

Well long story short, I have started closing bad options trades that I have opened several years ago, when, let’s put this way, “I was young and inexperienced”.

More specifically two trades this month, one on HASI and one on PG, which is the one that hurt the most. I have PG at a price that I consider pretty good, 77$. Many years ago I sold a call option with strike price 100, PG was lurking between 70 an 90 most of the time and it didn’t look like getting anywhere. Of course I was wrong and the stock rose quickly to 120, meaning that I was DITM. the choice was to let it assign, post a gain and lose PG and its nice average price, or up the ante, selling two calls and buying one, increasing strikes. I’ve gone for the second option and the trade went against me, PG rallied to 160, from 120, and I had to buy back the calls (and sell my long one) posting a loss. Quite a substantial one I have to say.

The positive side, is that PG is still there, lesson was learned already few year back when the trade started to go south, so to speak…

Anyhow, what’s done is done, the portfolio lost a lot of cash, although the actual fiscal loss was smaller, but more importantly I have gone back quite a bit on the yearly net yield measure that I am still trying to push over the threshold of 3%.

It’s not an easy road to this 3%, the fact is that with taxes and so on, I am always above 3% yearly net yield, but not by a “lot”…

As for the rest, FINALLY markets are coming down, it seems that what I was writing few months back finally made its way into the market (inflation, rate increases, economy and so on). I do not think that we are going to be living a “great” year, and the subsequent ones, as macro-economically things seem to be getting pretty heated. I am sitting on the sidelines, I might get stocks assigned through options, but right now I see no real opportunities out there…

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