June 2024 Report

Once again, Apple pulls through with a very compelling presentation of Apple Intelligence, which in turn generated a nice gain in the stock. I was skeptical of Apple’s AI play and thought they would simply just integrate ChatGPT into their iOS. The presentation provided many uses cases for Apple Intelligence, which I can see myself using. Now, there’s no choice, but to upgrade to a new iPhone if you want to experience these features. Considering what this device can do, the cost of a new phone is really insignificant.
 
Not much with special situations other than a small play on the Talen Energy Dutch offering. Still continuing to sell Puts on tech plays to generate income. I’m selling way out of the money options so I’m pocketing small premiums, but they add up over time.
 
I find that optimizing one’s tax situation is as important as generating gains. I admit that I started late in adjusting my portfolio to minimize taxes. Things such as waiting to sell ESPP shares until they become a qualifying disposition to cash exercising employee stock options for long term capital gains. It’s only been these past two years that I’ve started to take action on these tax saving strategies. I guess these are good problems to have but should have started much earlier. If you have time, YouTube is a great resource and that’s where I learned many of these tax savings strategies. I just can’t bring myself to pay a financial planner charging ~ 1% of assets for this advice.
 
 
2024 Performance = + 6.23% with the running monthly returns as follows:

January + 0.02%
February +0.99%
March – 0.33%
April - 3.07%
May + 5.16%
June + 3.52%

Talen Energy Dutch Tender Offer

If you’re not aware, there’s a Dutch tender offer for Talen Energy (Ticker: TLNE) for $116 to $122. The stock is currently trading around $111 to $112, which is a decent discount to the minimal range of $116 for the tender. The discount can be attributed to a possibility that they can withdraw and amend the deal based on the recent 10% decline condition of the Energy Share Basket. I see this as a low probability, but it can happen. The deadline for the early tender is June 12th. If you participate, make sure to purchase no more than 99 shares as there is an odd lot priority and go with “no bid” when tendering.

May 2024 Report

I’m finally in the black, which can primarily be attributed to the gain in Apple. With a ~ 40% holding in Apple, a ~ 12% gain will definitely have an impact on the portfolio. On the other extreme, I have a 0.10% position in Ginkgo Bioworks, which declined ~ 40% in May. The decline in Ginkgo Bioworks had almost a negligible impact. Ginkgo Bioworks is a one of those moon-shot positions and I’ll continue to hang on. The recent layoff announcement at Ginkgo Bioworks is worrisome, but I still like their vision. The lesson is to never average down on a stock that is not making you any money.

Still no merger arb plays as it’s too difficult in this environment. I usually take a stab at some of the rumor plays from the more reputable sources like Bloomberg and WSJ, but these days it seems like so many stories are planted and the deals don’t materialize. I’ve pretty much transitioned from merger arb plays to selling puts to generate additional income.

I still have a ~9% cash holding. I’ll take a safe 5% return any day and if you go with short term T-Bills, you’ll get a bit more than that. Cash is definitely not trash in this environment.  
 

2024 Performance = + 2.62% with the running monthly returns as follows:

January + 0.02%
February +0.99%
March – 0.33%
April - 3.07%
May + 5.16%

April 2024 Report

Well, I finally went into the negative territory for the year with the April results. The decline can be attributed Constellation Brands and Visa. Constellation Brands delivered a good quarterly result but sold off on the news. I am still very bullish on Constellation Brands and really like their capital return to shareholders via dividend / share buyback. Visa is just an amazing compounding machine that will do just fine in this inflationary environment. Nothing has fundamentally changed with these companies, and I intend to continue to hold them for the long term.

I have not been involved in any recent merger arb plays as I still find it tricky with this administration. The FTC attempt to block Tapestry’s acquisition of Capri is such a joke. I really want to see the FTC lose this case as this is a total waste of tax-payers money to fight this merger. In my wildest dream, I cannot see how the consumer is harmed by this merger. We are talking about “accessible luxury” handbags! Ok, enough of my rant on the FTC.

I still have a healthy cash position at ~ 8% and slowly building on that with the premiums from selling options. I am just waiting patiently for a good opportunity. I have no problem waiting with cash yielding ~ 5%.

 
2024 Performance = - 2.41% with the running monthly returns as follows:

January + 0.02%
February +0.99%
March – 0.33%
April - 3.07%

March 2024 Report

I’m not making much head way this year with a loss of -0.33% in March. It doesn’t help when Apple (my largest position) declines ~ 5%. I’m just glad that Constellation Brands gained ~ 9% and helped to keep the portfolio’s loss contained. Cash remains at ~ 8% and will deploy when opportunities arise.

I’m maintaining a relatively conservative approach with the goal of capital preservation. I don’t think I will ever go All-In in any position like I did in my early years. I guess you get wiser as you age. I experienced the 1997 – 1998 Asian Financial Crisis, 2000 dot.com bubble and the 2008 Financial Crisis. The last thing I want to do is to lose a big chunk of my portfolio on a dumb bet.

Tesla is starting to look interesting with its recent decline. Fundamentally, they are currently in a rough spot with the macro issues, but they are the clear leader in their segment. It is interesting that I am seeing more used Tesla’s for sale at a local used car dealership. It used to be a rare to see a used Tesla for sale, but now it’s very common. The difficult part is how low will the stock go?

 
2024 Performance = + 0.68% with the running monthly returns as follows:

January + 0.02%
February +0.99%
March – 0.33%

February 2024 Report

I’m off to a slow start in the year and lagging the market. I eked out a small gain of 0.99% in February with Visa and Mastercard doing the heavy lifting, while Apple (my largest position) declined ~ 2%. Am I concerned? No, the goal is simply not to lose money at this point. A super gain would be nice, but steady growth and some income is the way to go for me now. I am still on the hunt for a decent growth company with a dividend payout.

Here’s a current breakdown of my main portfolio with the dividend yields (adjusted to my cost basis). 

When I started, I really did not pay attention to the dividends, but over time the dividend payouts have contributed positively to the portfolio. Right now, I’m simply reinvesting the dividends into the purchase of additional shares, which has nice compounding effect. Dividend paying stocks are the way to go over the long run. For example, my very first purchase of Visa is now yielding 18.90%. I am finally realizing the power of dividends! 
 
No arb plays at the moment, just selling some puts on high volatility stocks (Tesla, Nvidia, etc...) to generate small income. 

That’s it for now…
  
 
2024 Performance = + 1.01% with the running monthly returns as follows:

January + 0.02%
February +0.99%

January 2024 Report

Happy New Year! What a great start to the year with a whopping +0.02% gain! This can be attributed to the recent pull back in Apple, which makes up ~ 40% of the portfolio. It’s a high concentration in one position and I’m actually considering adding to it. I view the Vision Pro as an iPhone moment and a new inflection point for Apple. I won’t be purchasing the first gen Vision Pro, but a maybe a second or third gen model. I can just imagine making trades with just a blink of an eye…  

No arb plays at the moment. With a wacko FTC chair, they will take an opportunity to block everything in sight. It’s no longer like the good old days when you can pretty much guarantee a HSR approval for any bolt on pharma acquisition. Most acquisitions will still go through, but you have to sweat it out a bit as they like to drag things out with a Second Request.

We need some nice IPOs this year…

 

2024 Performance = + 0.02% with the running monthly returns as follows:

January + 0.02%