Month in Review – July 2017

After several months of being relatively quiet, I made a concerted effort in July to be more active, both in making trades and my online presence.

The spark I needed was revamping the structure of the website. I dumped the whole awkward two site thing with blog posts going on Tumblr and everything else being kept back here at the mothership. To do this I moved the main domain off GoDaddy and onto WordPress site design.

Looks nice right?

I also became active on the twitter. I mentioned last month that I wouldn’t necessarily be writing a full blown post for every trade going forward, but I’m going to at least twitter every trade I make and naturally keep the portfolio and income tracker up to date.

So without further ado, here’s what happened in July.

Portfolio Summary

Metric

End of July 2017

End of June 2017

Total Invested

$373,504.08

$368,184.54

Market Value of Total Invested

$388,486.64

$378,407.34

Allocation % – Equity

44.62%

36.10%

Allocation % – Bonds

13.65%

12.06%

Allocation % – “Other”

3.84%

4.06%

Allocation % – Cash

37.43%

47.37%

Income Assets – Invested

$182,562.46

$150,786.13

Income Assets – Market Value

$185,065.70

$150,663.70

Projected Annual Income

$11,626.86

$6,462.61

Invested Yield

6.37%

4.29%

Market Yield

6.28%

4.29%

Stock Purchases

4 stocks purchased. 1 is a new position, 3 are additions to existing positions; projected annual income increased by $561.78 based on current dividends.

06/07/17 – EAD: 300 shares purchased @ $8.4833/share. This is part of the ongoing construction of my CEF portfolio and was an increase to the 200 shares I already owned in the inherited IRA. I twittered about this purchase and I wrote a full blog post because I was excited about the new format.

Annual projected income is increased by $215.39/year based on the projected annual dividend of $0.71796/share.

07/28/17 – LUV: 100 shares purchased @ $57.00/share. This was the result of an option assignment and represents a new position. The contract was only in force for three days but one of those days was when the company announced earnings, and Mr. Market didn’t take kindly to it. Original put contract was sold on July 25th, I posted my investment thesis a few days later and got assigned over the weekend. So it goes.

Annual projected income is increased by $50.00/year based on the projected annual dividend of $0.50/share.

07/28/17 – CIK: 500 shares purchased @ $3.4033/share. This is part of the ongoing construction of my CEF portfolio and was an increase to the 500 shares I already owned in the inherited IRA. I twittered about the purchase although that was it.

Annual projected income is increased by $132.00/year based on the projected annual dividend of $0.264/share.

07/28/17 – DSU: 200 shares purchased @ $11.7349/share. This is part of the ongoing construction of my CEF portfolio and was an increase to the 200 shares I already owned in the inherited IRA. I twittered about the purchase although that was it.

Annual projected income is increased by $164.40/year based on the projected annual dividend of $0.822/share.

Choose the Form of the Destructor

UVXY went through a 4:1 reverse split on July 17th. This is the eighth…yes EIGHTH reverse split since UVXY’s inception less than 6 years ago.

Everything got reconfigured to the adjusted share price and new options chains were developed for the “new” underlying. The options premiums seem to go down after these reverse splits…like everyone forgets that this ETP just throws bags of money into the dumpster and then lights the dumpster on fire.

Anyway, I picked up a couple of JAN18’19 $25 PUTS for ~$13.75/share. This puts my breakeven at $11.25 share. Having been through a couple cycles now, the options market seems to asymptotically approach a breakeven price around when the shares are likely to go through another reverse split, which kind of makes sense since liquidity goes way down and no one probably wants to hold the LEAPS to maturity. The next reverse split should be closer to $6-8/share, so I feel like I can actually build up some intrinsic value if I want to hold on to these things for the next 6 months.

All UVXY put trades are documented in the “UVXY” tab of the Dividend Income Tracker, and all future trades will also be documented on the twitter.

For the uninitiated, I am shorting UVXY because it is the worst ETF ever. I use long put positions so I can avoid the use of margin and do these trades in tax-advantaged accounts.

Additional exploits can be found here, here and here.

Pay Days and Raises

Dividend Income Tracker is published here at the mothership and has been updated.

Total investment income of $707.88 with a taxable total of $11.53. We’ll call it 8 “pay days” with 30 individual payments received.

Options premiums represent $319.28 of that total.

Capital gains made up $0.00.

Which leaves $377.07 of actual bona fide dividends (and $11.53 of P2P lending interest).

Lending club income is aggregated into a single income record for simplicity’s sake. It actually arrives as a lot of small payments over the course of the month. One loan was charged off this month, although my net income was still positive in spite of that loss. That brings the number of bad loans we’ve invested in to a total of 6 out of 177 or ~3.4%.

Month over month we have the same number of “late” loans (3), albeit with a slightly better distribution. It looks like the loan that was previously in the grace period moved to short-term late, and was replaced with another gracer. So net net things aren’t exactly improving

I said last month that I thought July could get ugly; it looks like we’ve stayed the execution into August, but there will still be a reckoning.

Oh well. Keep on truckin’ I guess.

Month

In Grace Period

Late (16 -30 days)

Late (31 – 120 days)

Charged Off (aggregate)

January 2017

1

1

4

1

February 2017

4

0

2

2

March 2017

2

0

2

2

April 2017

1

0

2

4

May 2017

0

2

3

4

June 2017

1

0

3

5

July 2017

1

1

2

6

This should be fun to track. This table will grow with each monthly update.

Lending club’s algorithm is suggesting I should write down $44.94 worth of principal for the loans that are late or in the grace period, but as the eternal optimist, I’m going to continue to wait until the loans are actually charged off to recognize the loss.

That is down from what it suggested last month ($50.36), but it represents nearly the full amount of principal currently in the 31-120 days late category, so I guess I shouldn’t hold my breath on those.

Comparisons

Month over month, investment income was down significantly by -43% from $1,234.91 in June, and year over year is even further down -63% from $1,913.60 in July of ‘16. Of course I enjoyed the benefit of some capital gains from selling mutual funds back then, and I had zero cap gains this month.

So it is what it is I guess.

Raises

One of the dividend distributions received represented a raise:

WFM paid $0.18/share compared to $0.16/share in the previous quarter. That represents a 12.5% increase. Of course WFM shareholders will vote this month to approve the sale of the company to Amazon (AMZN) for $42/share in cash. So that is probably the last dividend we can expect out of that one. Personally I think Bezos got the company for a song, but even if we vote “no” with our 52 shares, we’re unlikely to sway the outcome.

And that was July.

How’d you do for the month?

I’ll bet it wasn’t a 63% decline in YoY investment income…do you think I’m crazy for accounting the way I do?

Should I not count realized capital gains in my monthly income summary?

Want to yell anonymously on the internet?

Leave a comment below!

8 thoughts on “Month in Review – July 2017

    1. Cool! Thanks for the follow. The twitter is very new for me, but I think I’m getting the hang of it. I will not do the Book Face though…heels dug in on that one.

  1. That is quite the month right there. I love seeing the growth in your portfolio and dividend income! By the way, you never know if your 52 votes will make a difference in the final acquisition, but you won’t know unless you find out! Take a stand haha Congrats on the great results.

    Bert

    1. Thanks Bert.

      I’m working on a google sheet that will chart everything beyond just month over month like it’s displayed here. Since I trade a lot of options, my projected income growth actually bounces around a lot depending on how many contracts I have open. I don’t have the steadily climbing bar chart like a lot of other DGI blogs, but the overall trend is up

  2. Cool blog! Interesting summary. I see that you have a pile of cash lying around. Are you waiting for a better timing or just haven´t found the perfect thing to invest in?

    1. Hi Stockles. Thanks for the compliment on the blog.

      My ideal cash allocation is ~15% based on the current portfolio value. That’s based on $25K in “dry powder” for a market correction and ~$35K in emergency fund and cash flow for spending. So I’m about $85K heavier in cash than I’d really like to be right now.

      $30K of that is slated to be invested in fixed income closed end funds (CEFs). The CEF portfolio has been slowly building over the last year. Too slowly actually. I intend to accelerate the purchasing to invest that in the next 15-20 weeks.

      Because my wife and I have a ROTH competition going, we’ve elected to fund our ROTH accounts at the same time each year with the full $5,500. We’ve chosen August as the month to fund the accounts since September is the historically highest volatility month. So there’s another $11K that will be deployed relatively soon, assuming we find attractive investments.

      That leaves ~$45K that should be deployed, but isn’t. I guess you could say it’s because I haven’t found the perfect thing to invest it in yet. A truly perfect investment is pretty hard to spot in advanced, so who knows what I’m really waiting for. A little bit chicken too I’ll have to admit. This market is approaching historically stretched valuations in aggregate. It is not easy to sift through.

      Thanks for visiting and commenting.

  3. You definitely have many investing angles going on. Makes my sole dividend income look boring. Looks like July was a good month overall. Always appreciate any P2P update from the few bloggers who utilize it. It’s a great way to learn the pros and cons from real world users. Keep up the good work!

    1. Hi DivHut,

      Boring is good! Boring dividends are especially good. Eventually I’d like to simplify all this quite a bit, but for now in the accumulation phase, I like the accelerated returns I get from options.

      I think I’m one of the few bloggers who’s having a pretty positive experience with the P2P experiment.

      Thanks for visiting and commenting.

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