July 2018 Performance

July was a month where I really did nothing and the portfolio just managed itself into a gain of +1.53%. The majority of the gains can be attributed to my long positions in Apple (Ticker: AAPL), Qiagen (Ticker: QGEN), MasterCard (Ticker: MA), Sanofi (Ticker: SNY) and VISA (Ticker: V), while Alibaba (Ticker: BABA) and Constellation Brands (Ticker: STZ) continued to drag down the performance. The merger arb plays also had a minor positive contribution with positions in JA Solar and Foundation Medicine.

I just want to thank Merger Pie for a heads up on the pending closure of JA Solar. This was a free money play as there was still a nice little spread with days to closing. The other merger arb play that I was involved in for July was Foundation Medicine via Short Puts. I did not have a large position in Foundation Medicine as the maintenance requirement was just too high. Foundation Medicine’s deal with Roche just closed and the options will be accelerated to an August expiration.

I have added to my Short Put position in Rent A Center (Ticker: RCII). The company just posted another strong earnings report as they continue to successfully execute their turnaround plan. I’m modeling a close by the end of November with Vintage Capital. Rent A Center would be flying high right now if it weren’t for the Vintage Capital buyout. It’s a heavily shorted stock and with this strong earnings report, the shorts would be squeezed pretty hard. I would never consider investing in a rent to own biz until this special situations showed up. It’s actually a very nice biz model that unfortunately preys on the people, who really can’t afford to purchase the merchandise. These people will just make a few monthly payments and the company will repossess once they are late with their payment.

That’s all I have for July…


2018 Performance = +14.63% with the running monthly returns as follows:

January +2.80%
February +2.82%
March -0.03%
April +2.10%
May +6.25%
June -1.51%
July +1.53%