Month in Review – November 2017

Much like the markets lately, the total value of our investable assets continues to hit all time highs. That’s exciting and everything, but it’s really just an imaginary number, and I think it’s important to recognize the insignificance of that number.

I try not to get too excited about setting a high score in imaginary cost basis bucks, because whenever this market does finally turn (and it will eventually turn) that high score is going to go down. It’s always hard to watch your score fall, but it’s slightly easier if you’ve never been too wrapped up in it to begin with.

So November has come and gone, and we’re heading down the homestretch of this year.

Let’s talk about it!

Portfolio Summary

Metric

End of November 2017

End of October 2017

Total Invested

$402,355.52

$398,342.86

Market Value of Total Invested

$430,437.85

$418,133.61

Allocation % – Equity

55.81%

49.25%

Allocation % – Bonds

15.80%

14.32%

Allocation % – “Other”

3.32%

3.73%

Allocation % – Cash

24.62%

32.21%

Income Assets – Invested

$244,869.00

$223,673.45

Income Assets – Market Value

$253,760.97

$227,696.52

Projected Annual Income

$13,050.37

$9,852.20

Invested Yield

5.33%

4.40%

Market Yield

5.14%

4.18%

Stock Purchases

4 stocks purchased. 3 are additions to existing positions, and 1 is new; projected annual income increased by roughly $458.80 based on current dividends.

11/15/17 – PFL: 200 shares purchased @ $11.51/share. This is part of the ongoing construction of my CEF portfolio and doubled the 200 shares I already owned in the inherited IRA. Projected income increased by $216.00/share based on the current annual dividend of $1.08/share.

11/15/17 – TGT: 35 shares purchased @ $55.06/share (plus a $6.95 trade commission). I put a limit order in my ROTH the day before TGT’s earnings release in case there was a big move. Well, there was a big move alright. Management said they were expecting a disappointing holiday season and the robots flipped their shit.

The share price has mostly recovered, and I’m feeling pretty smug about the whole thing:

Since I already own 100 shares of TGT in the beneficiary IRA, this represents an increase to the aggregate position. My previous cost basis was $56.50/share, so I averaged down a little bit here. Projected annual income is increased by $86.80/year based on the current annual dividend of $2.48/share.

11/21/17 – VCF: 107.9253 shares purchased @ $15.40/share (plus a $3.95 trade commission). This is a new position for the Wizards and it’s held in our taxable brokerage account. VCF is a closed end fund, but this isn’t part of my CEF portfolio. This is a municipal bond fund that focuses on Colorado bonds so the interest is not subject to federal or state income tax.

I’m going to be building this position up as taxable savings are available (i.e. once tax-advantaged retirement accounts are maxed out). If the FOMC finally starts raising interest rates, this could lose quite a bit, so I’m trying to dollar cost average into the position, by purchasing $1,666 worth of shares each month.

I’m using Capital One’s “sharebuilder” feature which allows automatic investments of a fixed dollar amount at regular intervals.

Since this investment is on autopilot for now, I’m letting the dividends reinvest automatically. I don’t count dividends that are automatically re-invested in my annual income projection, so that’s unaffected by this purchase.

11/28/17 PPT: 500 shares purchased @ $5.2193/share. This is part of the ongoing construction of my CEF portfolio. This brings my position in PPT up to 800 shares. Projected annual income is increased by $156.00/year based on the projected annual dividend of $0.312/share.

Apparently PPT is also the ticker (is that the term?) for a cryptocurrency called “Populous”, which caused some confusion on the twitter.

I think the coin was trading at like twice my purchase price of the CEF, which would have been mind blowing if you think that the entire world revolves around crypto.

2017 can’t end soon enough in my opinion.

Choose the Form of the Destructor

I finally closed my UVXY LEAPS put position this month.

I still don’t understand why I can’t buy puts on UVXY since that’s just a derivative of the ETF…it’s not like I’m actually holding the underlying in my account (or ever plan to).

I haven’t actually confirmed this news from IBKR yet, so I guess I’ll see if I can do this trade anymore. If not, I will kill this section next month.

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

For the uninitiated, I have been shorting UVXY because it is the worst ETF ever. I was using long put positions so I could avoid the use of margin and do these trades in tax-advantaged accounts. I will be bummed if I can’t do it anymore in the beneficiary IRA.

Pay Days

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

Total investment income of $1,099.72 with a taxable total of $32.24. We’ll call it 12 “pay days” with 30 individual payments received.

Options premiums represent $363.68 of that total.

Capital gains made up $298.42.

Which leaves $405.38 of actual bona fide dividends (and $32.24 of P2P lending interest).

Lending Club

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.

No loans were charged off this month. Yay! The number of bad loans we’ve invested in is 8 out of 199 or ~4.02%.

Month over month, the good news is that no new loans became late. The bad news is that the number of loans in the 31-120 day late category doubled from 3 to 6. So the total number of “questionable” notes outstanding has remained at 8, but it could get rough here in a bit.

Oh well. Hopefully I’m helping all these people to get out of usurious credit card debt.

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

August 2017

1

1

2

7

September 2017

4

0

4

7

October 2017

4

1

3

8

November 2017

2

0

6

8

I’m glad I started tracking this stuff this year. I think this table is fascinating.

Lending club’s algorithm is suggesting I should write down $100.48 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 up a lot from what it suggested last month ($75.27), which reflects the high percentage of extremely late loans.

I started a new experiment buying late notes on the secondary market at a discount. I’m still figuring out the details of that strategy. For now I am keeping all that separate from these monthly summaries. I have some income and some losses, depending on how you want to look at it, but it is going to be a separate deal for the time being.

Here’s the latest on all that.

Comparisons

Month over month, investment income was up 70.8% compared to $643.82 in October. My investing income bounces around a lot from month to month. My dividends are actually relatively stable thanks to all the CEFs that pay monthly, but the options income and capital gains are pretty sporadic. That’s what I get for counting it this way I guess.

November marks the first month that I have 4 years (!) of data on my income tracking sheet.

To celebrate, I’m adding a table to this segment to look at longer term trends:

NOVEMBER – INVESTMENT INCOME HISTORY

Year

Dividends

Options

Capital Gains

P2P

Total

2014

$37.83

$0.00

$0.00

$0.00

$37.83

2015

$528.65

$0.00

$0.00

$0.00

$528.65

2016

$276.83

$514.11

$113.27

$27.71

$931.92

2017

$405.38

$363.68

$298.42

$32.24

$1,099.72

Pretty cool huh?

Raises

For the 21st consecutive QUARTER, OHI raised their dividend. The increase was $0.01 to $0.65/share which works out to a 1.56% raise. That works out to a 6.24% annualized dividend growth rate.

That is absolutely bonkers and I don’t think it’s sustainable. I am extremely worried about this dividend’s safety.

But I guess time will tell. My position only represents 0.63% of our total investable assets, so I think it’s worth hanging on to it, just to see what happens. I’m not adding anymore shares though.

So that’s the month that was. What do you think? How’d you do with your investments? Let’s have some chatter in the comments section eh?

2 thoughts on “Month in Review – November 2017

  1. Nice report, I agree that it is hard to get to excited when everyone knows things can reverse. However it is all relative and if markets reverse then everything adjusts accordingly. Also right now they are unrealized gains but if you feel confident things are going to take a turn you can always realize them!

    1. That’s one of the things I like about dividends and selling options. I’m always realizing a portion of my gains as cash payments.

      Thanks for visiting and commenting. Don’t be a stranger.

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