Month in Review – November 2018

Oh man. November was…not great for the markets in general. October’s rise in volatility hasn’t settled down at all. Will we get a “Santa Rally” or will Mr. Market keep puking on his shoes?

 

Hard to say.

In the meantime, let’s review the month of November.

Portfolio Summary

Metric

End of November 2018

End of October 2018

Total Invested

$490,580.61

$486,518.61

Market Value of Total Invested

$517,150.10

$502,390.48

Allocation % – Equity

56.47%

61.52%

Allocation % – Bonds

17.39%

17.99%

Allocation % – “Other”

3.04%

2.94%

Allocation % – Cash

23.13%

17.17%

Income Assets – Invested

$271,565.01

$290,283.51

Income Assets – Market Value

$276,188.83

$292,822.95

Projected Annual Income

24,045.00

$31,643.57

Invested Yield

8.85%

10.90%

Market Yield

8.71%

10.81%

Stock Purchases

I made five stock purchases this month. Two are new positions. Total investment income is projected to increase by $306.68/year based on the current annual dividend distributions.

11/8/18 EVC (#1) – 271 shares purchased at $4.67/share + $6.95 trade commission for a total investment of $1,272.52.

This was made in my traditional IRA account where I’m building up a portfolio of 11 stocks: one of each from the GICS sectors. EVC is my pick for the newly rejiggered “Communications Services” sector.

I wrote up an investment thesis in September. The stock took a huge shit after quarterly earnings were reported. This was me trying to pick up shares on the earnings weakness. Turns out I could have just waited and got them for like 35% less at the end of the month.

Oh well. Thou can’t time the market so thou shalt not try to.

Projected investment income is increased by $54.20/year based on the current annual dividend of $0.20/share.

11/9/18 EVC (#2) – 200 shares purchased at $5.00/share for a total investment of $1,000. This was a short put option that was assigned early after the big negative earnings move.

The contract was sold as part of an earnings straddle on October 22. The call leg was not assigned.

Projected investment income is increased by $40.00/year based on the current annual dividend of $0.20/share.

11/19/18 MPC – 20 shares purchased at $63.16/share + $6.95 trade commission for a total investment of $1,270.15. This is a new position.

This is my “Energy” sector choice for the GICS portfolio. I would have picked Valero, but they just decided to buy back their MLP which seems like a bad idea to me. Refiners have been clobbered along with the rest of the energy sector, which is unfair since their profitability has more to do with crack spreads which is way more nuanced than just the price of oil.

With consumer confidence soaring, wages increasing, etc. etc. I expect lots of big gas guzzling SUVs and trucks to continue to demand refined petroleum products. ‘MURICA

Projected investment income is increased by $36.80/year based on the current annual dividend of $1.84/share.

11/19/18 WHG – 40 shares purchased at $39.50/share + $6.95 trade commission for a total investment of $1,586.95. This is an increase to my existing position in the ROTH IRA.

What can I say about WHG? The share price is getting hammered right now and I keep buying more. They just raised their dividend 5.9% and they have zero debt on the balance sheet.

At this price, I’m getting a 7.3% yield which is bananas. I said last month that I might add in November but I was approaching a “full” position in this particular security. I guess I’m maxed out now.

Projected investment income is increased by $115.20/year based on the current annual dividend of $2.88/share.

11/29/18 PETS – 56 shares purchased at $24.25/share + $6.95 trade commission for a total investment of $1,364.95. This is a new position in my ROTH IRA.

I will be publishing an investment thesis for this as well as several other new positions I’ve taken recently. Stay tuned.

Projected investment income is increased by $60.48/year based on the current annual dividend of $1.08/share.

Casino

Yes I’m still sports betting.

No I haven’t gotten around to writing up my process for it.

I will also come up with a google sheet that will track my win/loss record and it will be displayed here monthly. Not yet though, sorry.

In the month of November I basically continued to tread water. Technically I lost money this month, but that’s only because I paid for 6 months of a data service up front, and I’m counting that against my P&L.

Stay tuned.

Pay Days

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

Total investment income of $3,726.31.41 with a taxable total of $-75.18. We’ll call it 15 “pay days” with 53 individual payments received.

Options premiums represent $1,493.34 of that total.

Capital gains made up $1,675.00.

Which leaves $633.15 of actual bona fide dividends (plus $35.61 of P2P interest, $-128.33 of sports betting losses, and $17.54 of treasury interest).

If you’ve been following me on the twitter, you know that I’ve gotten a lot more active with my options trading lately. I think this income report reflects that nicely.

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!

Unfortunately, the overall situation did not improve month over month. We now have two very late loans, two moderately late loans, and three new troublemakers have been added to the “Grace Period” category. That’s a bummer

The number of bad (charged off) loans we’ve invested in so far remains at 22 out of 270 or 8.15%.

Oh well.

Month

In Grace Period

Late (16 -30 days)

Late (31 – 120 days)

Charged Off (aggregate)

End of 2017

0

0

6

8

January 2018

1

0

4

9

February 2018

0

4

1

13

March 2018

0

2

3

13

April 2018

0

1

4

14

May 2018

2

1

6

14

June 2018

1

0

5

16

July 2018

0

0

5

18

August 2018

3

2

3

18

September 2018

1

1

2

21

October 2018

2

0

1

22

November 2018

3

2

2

22

I’m glad I started tracking this stuff last year. It has been fun to continue to follow it through 2018.

Lending club’s algorithm is suggesting I should write down $66.55 worth of principal for the  loans that are late, but as the eternal optimist, I’m going to continue to wait until the loans are actually charged off before I recognize the loss.

That is up significantly from what it suggested last month ($24.91), which makes sense given the worsening situation.

Comparisons

Month over month, investment income was up 111.2% compared to $1,764.41 in October.

Month over month comparisons are stupid given the way that I count “income”. Options activity and capital gains are pretty erratic. But that’s how I count it, so it is what it is.

I now have 5 years (!) of data on my income tracking sheet.

So I’ve been including this table in this segment to look at longer term trends:

NOVEMBER – INVESTMENT INCOME HISTORY

Year

Dividends

Options

Capital Gains

P2P (Gambling)

Treasuries

Total

2014

$37.83

$0.00

$0.00

$0.00 ($0.00)

$0.00

$37.83

2015

$528.65

$0.00

$0.00

$0.00 ($0.00)

$0.00

$528.65

2016

$276.82

$514.11

$113.27

$27.71 ($0.00)

$0.00

$931.92

2017

$405.38

$363.68

$298.42

$32.24 ($0.00)

$0.00

$1,099.72

2018

$633.15

$1,493.34

$1,675.00

$35.61 ($-128.33)

$17.54

$3,726.31

Pretty cool huh?

As I outlined in a post in October, I’ve started using treasury ladders to boost the yield earned on idle cash. I’ve added a column for the treasury interest as I’d like to start tracking that going forward.

Raises

None of the dividend distributions represented a raise this month. What a bummer.

So there you have it. One more month to go in 2018. I’d love to see a comparable amount of trading income in December as I did last month, but if things quiet down around the holidays that might be tough.

Well…what do you think? Am I crazy? You think I’m crazy don’t you?

Well, say it then. The comments aren’t going to write themselves you know…

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