February 2022


A General Overview

One day at the time… February is gone! Well well, where to start? We are in the middle of a European war, in 2022. Who would have thought? Russia invaded Ukraine and all of a sudden cold war memories come back to life…

It’s kind of NOT funny to see the media response to the war, Russia being pictured again as the big bad wolf, nasty images of the red square under the rain in gloomy atmospheres, armies marching… Like it was in the 70s when I was a little kid and was brought up fearing Russia…
Then life brought me to travel there several times and it was not like that at all. Russia is a great country and Russian people are great too. It’s a shame that they are managed by a dictator like Putin, of course I condemn strongly the invasion and the killings, it’s such an anachronistic way of solving issues in 2022…
Anyways, the war brought tension and gloom to sunny Italy too and after COVID we did not really need it, I think.

At home things are ok, babies growing, renovations ALMOST at the end, finally managing to see some light at the end of this tunnel where I found myself 5 months ago… I guess life it’s nice because it’s unpredictable, the things that we had to endure the last 5 months were quite unforeseen and certainly hard, so I’ll be happy when I can consider parts of it “over and done” with..

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%
Feb 202235.70%1.33%2.63%0.45%
LH Portfolio Milestones + Monthly current year

TR is decreasing (vs. previous month) – Not huge loss, we are talking 13bps, but still a loss…

YTER is decreasing (vs. previous month) – 1bps, little steps… good steps

Net Yearly YoC is increasing (vs. previous month) – 2bps clawed back from January huge loss…

Forex is better (vs. previous month) – Now… this is HUGE. After I forgot how many years, this metric goes positive! Currency differentiation is FINALLY paying off!

Dividends and Options

Income this month was 1637 Euro

Dividends accounted for 1290 Euro (+32% vs 2021) and Options ended up with a 347 Euro score (+1.62% vs 2021).

Dividends

A great February. For the first time in history of the LH Portfolio, February gets to pass the 1K euro gross dividends!

Options

Recovering from the huge loss in January is not easy, and will not be easy. But February showed the way, with a very good result. I might not be able to replicate it every month, but if I succeed the loss made in January will be totally cancelled.

DCA/Increased Positions

Bought 50 BAMH @ 21.35 USD

Added 50 shares, this is a preferred stock, ETD to be precise. Now average price is well below par and yield is growing because of the lower price of the stock.

Bought 50 BEPH @ 20.75 USD

Same as BAMH here above. They are both preferred from Brooksfield (Asset Management and Energy Partners), I like this conglomerate a lot. Down on interest rate raise speculations, will probably fall more in coming months

New Positions – Sold Position

Nothing to report

The Financial Conclusions

February started quite “well”, markets finally starting to cool down a little after the huge run made last year. Overly bubbly sectors like tech and renewable energy started to fall consistently, not because they are bad business “per se”, but because they grew far too much in 2021 stock bull run craze.

Then Russia arrived.

What we are seeing now is that Europe, closer to the conflict is suffering the major blow, financially. USA not so much, although there were losses in the market there too.

It’s hard to predict what can happen, but interest rates ARE going to go up in America pretty soon. Europe now is in the middle of a quasi war with Russia and lots of sanctions are levied. While for the US economy sanctions are bad, but “not that bad after all”, for Europe the situation is not the same as most of the countries here are relying on Russian gas for energy.

This is likely to inflame energy bills for households and companies. This will get inflation even higher (it was already rising strongly without the war) and in return I fear that we might hit the “recession button”. Once more something that happens “outside of Europe” affects Europe the most. It’s hard to predict the scenario, if we are heading towards nuclear war (I do not believe in this outcome, but I did not think that Russia would invade Ukraine either) then the stock market is the last of my worries.

If we are not heading towards “end of the human race” outcomes, then the economy will be a huge issue for months to come as the post-covid recovery might be halted by sanctions and energy prices. If that is the case, slow recovery + high inflation will force the ECB to raise interest rates (they have already said they will), bringing Europe into stagflation.

Of course things might not go like that, but right now I cannot see a swift and overly peaceful resolution of the conflict. The longer it lasts, the higher the economic damage will be (not considering lives and infrastructures which are more important than stock of course).

Investing-wise this could be a good moment to take on stock that loose ground thanks for panic selling and oversold reactions to poor earning releases, so it’s time to be vigilant.

4 thoughts on “February 2022

  1. That’s a lot of passive income for the month. Congrats.You know the game. DCA into positions, reinvest when you can and keep stacking shares. Keep doing what you’re doing.

    Like

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