Value Investment Fund – Status on July 31, 2023
. July 31, 2023 June 30, 2023 July 31, 2023
. # of Shares Cost Basis Net Market Price* Net Fair Market Value* Net Fair Market Value*
REITs
. – Essex Property Trust, Inc. (Tranche #1) 71.6846 $20,000.00 $242.54 $16,724.02 $17,386.38
. – Essex Property Trust, Inc. (Tranche #2) 77.7000 20,000.00 242.54 18,127.41 18,845.36
. – Essex Property Trust, Inc. (Tranche #3) 100.0000 22,221.00 242.54 23,330.00 24,254.00
. – Essex Property Trust, Inc. (Tranche #4) 180.0000 44,980.00 242.54 41,994.00 43,657.20
. Sub-Total 429.3846 107,201.00 $100,175.43 $104,142.94
. – AvalonBay Communities 100.0000 17,249.66 187.70 $18,927.00 $18,770.00
Railroads
. – Norfolk Southern Railroad 100.0000 21,012.00 232.55 $22,576.00 $23,255.00
Entertainment
. – The Walt Disney Company (Tranche #1) 180.1801 20,000.00 $87.88 $15,906.30 $15,834.23
. – The Walt Disney Company (Tranche #2) 200.0000 21,200.00 87.88 17,656.00 17,576.00
. – The Walt Disney Company (Tranche #3) 198.0198 20,000.00 87.88 17,481.19 17,401.98
. – The Walt Disney Company (Tranche #4) 100.0000 8,919.47 87.88 -0- 8,788.00
. Sub-Total 678.1999 70,119.47 $51,043.49 $59,600.21
Banking
. – Wells Fargo (Tranche #1) 100.0000 4,267.50 45.16 $4,168.00 $4,516.00
. – Wells Fargo (Tranche #2) 400.0000 15,804.00 45.16 16,672.00 18,064.00
. Sub-Total 500.0000 20,071.50 $20,840.00 $22,580.00
Dividend Receivables (Essex/AvalonBay) 1,156.88 -0-
Cash on Hand (Basis, Gains, Dividends, PUTS) 684.86 3,243.57
Totals (Starting Cost Basis = $100,000) $235,857.64 $215,403.65 $231,591.72
Accrual adjustment for taxes 3,641.79 1,581.86
Totals Net of Taxes (Recapture) $219,045.44 $233,173.58
Margin Account (AvalonBay/Norfolk Southern Purchase) (36,986.22) (45,817.38)
This portfolio’s value is AFTER TAXES of 28% on all realized gains. Total taxes paid to date 35,508.50 35,508.50
Comparative Gross Return Since Inception $217,567.72 $222,864.70
Unrealized Earnings (Value of Respective Market Prices Less Cost Basis/Fees at Point of Sale) $(13,006.39) $(7,509.49)
*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:
- Norfolk Southern Corporation – sold in September (200 Shares) with a strike price of $145 and an expiration date of January 21, 2024 $29,200
- Union Pacific – sold 12/30/22 (200 Shares) with a strike price of $145 and an expiration date of August 18, 2023 $29,200
- L3 Harris Technologies – sold 12/30/22 (100 Shares) with a strike price of $150 and an expiration date of October 20, 2023 $15,100
- Marriott Hotels – sold 12/30/22 (100 Shares) with a strike price of $90 and an expiration date of January 19, 2024 $9,100
- Essex Property Trust – sold 03/17/23 (100 Shares) with a strike price of $200 and an expiration date of October 23, 2023 $20,100
- Huntington Ingalls – sold 03/17/23 (200 Shares) with a strike price of $185 and an expiration date of September 15, 2023 $37,200
- The Walt Disney Company – sold 07/18/23 (300 Shares) with a strike price of $85 and an expiration date of June 21, 2024 $25,800
*Total financial commitment = $165,700
Market prices on July 31, 2023 are:
- Union Pacific (Expiration 08/18/23) $231.57 (Strike Price of $145.00) Current Deviation = 59.70%
- Huntington Ingalls (Expiration 09/15/23) $229.67 (Strike Price of $185.00) Current Deviation = 24.15%
- L3 Harris Technologies (Expiration 10/20/23) $189.49 (Strike Price of $150.00) Current Deviation = 26.33%
- Essex Property Trust (Expiration 10/23/23) $242.54 (Strike Price of $200.00) Current Deviation = 21.27%
- Marriott Hotels (Expiration 01/19/2024) $201.81 (Strike Price of $90.00) Current Deviation = 212.23%
- Norfolk Southern Corp (Expiration on 01/21/24) $232.55 (Strike Price of $145.00) Current Deviation = 60.38%
- The Walt Disney Company (Expiration on 06/21/24) $87.88 (Strike Price of $85.00) Current Deviation = 3.38%
*Deviations > 25% are considered favorable.
Earnings realized during April/May/June 2023:
- Norfolk Southern – $1.35/Share, 100 Shares = $135.00
- Wells Fargo Bank – $.30/Share, 500 Shares = $150.00
- Essex Property Trust – $2.31/Share, 429.3846 Shares = $991.88
- AvalonBay Communities – $1.65/Share, 100 Shares = $165.00
1st Quarter Earnings Summary:
- Gains from Securities $20,412.00 *Comerica Bank (See Summary Section Below for Transaction Information)
- Dividends 2,131.53
- Sale of PUT Option Contracts 1,840.00
Sub-Total 1st Quarter Earnings $24,383.53
2nd Quarter Earnings Summary:
- Dividends $1,441.88
3rd Quarter Earnings:
- Sale of PUT Option Contracts (Disney) $1,860.00
Total Earnings to Date 2023: $27,685.41
Realized Return Year-to-Date 2023: 19.171%
Taxes Paid Year-to-Date 2023: $7,231.11 ($25,825.41*.28)
Tax Deferral 3rd Quarter 2023 (Due 09/30/23) $520.80 ($1,860.00*.28)
© 2023, David J Hoare MSA. All rights reserved.
