Overall, the Value Investment Fund remained stagnant during August 2022. The Fund’s balance improved a mere .2%.
Value Investment Fund – Status on August 31, 2022
. September 30, 2022 August 31, 2022 September 30, 2022
. # of Shares Cost Basis Net Market Price* Net Fair Market Value* Net Fair Market Value*
REITs
. – Essex Property Trust, Inc. (Tranche #1) 71.6846 $20,000 $241.23 $18,929.04 $17,292.48
. – Essex Property Trust, Inc. (Tranche #2) 77.7000 20,000 $241.23 20,517.46 18,743.57
. Sub-Totals 149.3846 40,000 $39,446.50 $36,036.05
Entertainment
. – The Walt Disney Company (Tranche #1) 180.1801 20,000 $93.33 $20,014.40 $16,816.21
. – The Walt Disney Company (Tranche #2) 200.0000 21,200 93.33 22,216.00 18,666.00
. – The Walt Disney Company (Tranche #3) 198.0198 20,000 93.33 21,996.04 18,481.19
. Sub-Totals 578.1999 61,200 $64,226.44 $53,963.40
Banking
. – Wells Fargo (Tranche #1) 292.0560 10,000 $39.22 $12,473.71 $11,454.44
. – Wells Fargo (Tranche #2) 558.9715 20,000 39.22 23,873.67 21,922.86
. – Wells Fargo (Tranche #3) 234.3292 10,000 39.22 10,008.20 9,190.39
. Sub-Totals 1,085.3597 40,000 $46,355.58 $42,567.69
Dividend Receivables (Essex Property Trust) 325.61 328.65
Cash on Hand (Basis, Gains, Dividends, PUTS) 24,240.55 25,131.77
Totals (Starting Cost Basis = $100,000) $141,200 $174,594.68 $158,027.55
Accrual adjustment for taxes (2,471.99) 2,417.20
Totals Net of Taxes (Recapture) $172,122.70 $160,444.75
This portfolio’s value is AFTER TAXES of 28% on all realized gains. Total taxes paid to date equals 25,450.11 25,924.50
Comparative Gross Return Since Inception $197,572.84 $186,369.25
Unrealized Earnings (Value of Respective Market Prices Less Cost Basis/Fees at Point of Sale) $8,828.53 (8,632.57)
*Net of transaction fees of $1.00 per share; thus the amount in the schedule equals the actual market price per share at closing less $1.00 per share.
Value Investment Fund – Potential Obligations
The Value Investment Fund’s current exposure related to PUT options is as follows:
- Union Pacific Railroad – sold in Feb 2020 with a strike price of $155/share and an expiration date of January 21, 2023 $20,000
- JP Morgan Chase – sold in May 2022 with a strike price of $80/share and an expiration date of June 16, 2023 $20,000
- Essex Property Trust, Inc. – sold in May 2022 with a strike price of $260/share and an expiration date of October 21, 2022 $20,800
- Essex Property Trust, Inc. – sold in June with a strike price of $240/share and an expiration date of October 21, 2022 $24,000
- Norfolk Southern Corporation – sold in September (200 Shares) with a strike price of $145 and an expiration date of January 21, 2024 $29,000
Market prices on September 30, 2022 are:
- Union Pacific Railroad (Expiration on 01/21/2023) $194.82 (Strike Price of $155.00) Current Deviation = 25.69%
- JP Morgan Chase (Expiration on 06/16/2023) $104.50 (Strike Price of $80.00) Current Deviation = 30.62%
- Essex Property Trust, Inc. (Expiration on 10/21/2022) $241.23 (Strike Price of $260.00/$240.00) Current Deviation = (7.22%)/.005% Respectfully
- Norfolk Southern Corp (Expiration on 01/21/24) $209.65 (Strike Price of $145.00) Current Deviation = 44.58%
*Deviations > 25% are considered favorable.
It is now assumed that the Value Investment Fund will have to comply with the terms of the option contracts and make arrangements to purchase two hundred shares of Essex Property Trust later in the month of October.
Value Investment Fund – Earnings Year-To-Date
First Quarter Earnings:
. Sold Huntington Ingalls 03/07/22 Net Realized Gain $5,557.05
. Dividends Earned (First Quarter 2022) 271.34
. Net Earnings from Sales of PUT Contracts 573.10
. First Quarter Earnings $6,401.49
Second Quarter Earnings:
. Net Earnings from Sales of PUT Contracts $3,908.57
. Dividends Earned 607.46
. Second Quarter Earnings $4,516.03
Third Quarter Earnings:
. Net Earnings from Sales of PUT Contracts $1,040.00
. Dividends Earned 654.26
. Third Quarter Earnings $1,694.26
Total Realized Earnings Year to Date 2022 $12,611.78 (6.63% Realized Return to Date)
Taxes Paid to Date 2022 – $3,531.30 (28% of the $12,611.78 Realized Thru September 30th 2022)
© 2023, David J Hoare MSA. All rights reserved.
