WWTBAM Bored

Last week-I finally had some time and I reactivated Spock's Bored Hedge Fund.

To remind anyone that has forgotten-the Bored Hedge Funds strategy is based on a short-term strategy to see if there is any money to be picked up around dividend dates.

I started last Monday-which was a big down day and the rest of the week seemed to also be mostly bigger down days.

Somewhat surprisingly, because the shares are bought right before the dividend dates-it seems to be a fairly forgiving strategy.

I implemented 12 turns with a turn equaling the number of whole shares I can buy for $750.

With one exception, I chose stocks that paid more than a 4% annual dividend so I am playing for the 1% (or more) quarterly dividend.

Of the 12 turns-I closed 5 turns last week with a gain (capital appreciation plus the dividend) ranging from .76% to 2.37%.

2 More turns were closed this morning with a .89% gain and 2.66% gain.

I basically have them all listed to sell automatically so I could pickup a 1% capital appreciation plus the dividend which is where the 2.66% gain came from-I just made the choice to sell the one turn at the .89% gain.

I am sitting on current capital losses on the remaining 5 open turns from last week which range from a negative 2.26% to a negative 6.15%.

I have no reason to sell at a loss at this time and the calendar works in kind of a fun way with this strategy. Because I buy the shares so close to the dividend-I only have to hold them 3 months to get half the dividend for the year-.etc etc. In that manner, It gets pretty forgiving pretty quickly.

Just say, in 3 months-I am sitting on a 1% capital loss, but I would get 2 of the quarterly dividends.-I could close out that turn at a capital loss and still make a profit on the deal.

What's my cut?

Hey. I saddled the horses and wrote prospectuses, prospecti, like that.

Well, I have a little team building exercise planned for you 2. It is based on Navy Seal training. If you can make it through Hell Week-I might let you in if the results are negative.

Other than that-Week 2 was a good week for the Bored Hedge Fund-with the lesson being patience-patience patience.

All those negative open turns from last week are now closed (mostly today) at a gain-with the exception of one that I took a 45 cent loss on.

So for simplicity-I use a $7500 initial investment as my initial capital with a turn being the number of whole shares I can buy for $750.

Week 1: $48.21 gain or .64% return

Week 2: $71.23 gain or .95% return

Two week total======$119.44 gain or 1.59% Return

I only have 1 open turn currently sitting about 3% negative-there are a lot of ex-dividend dates coming up on June 29-so I have Monday and Tuesday to work on those-time won't permit today.

I really don't like not holding shares-but the lesson of the last 2 weeks is that I can buy a day prior to the Ex-dividend date and still come out ahead.

Week 3 of Spock's Bored Hedge Fund was a decent week.

Results-Gain of $84.15 for a weekly ROI of 1.12%.

Cumulative Return on Investment after Week 3 is 2.71%.

Week 4 Update:

Gain of $69.19 or .92% ROI.

Cumulative through Week 4.

3.64% ROI.

Week 5 ending July 15th gave us the first negative weekly return.

Lost $9.37 for a weekly ROI of a negative .12%.

Cumulative ROI after week 5 dropped to 3.51 percent.

While dividends are accounted for when I close a turn and not when I get the dividend which can be as much as a month apart; days like today are still kind of fun as I got 6 dividends.

I got caught with 3 open turns on tobacco companies right as tobacco stocks took a major dump.

I am currently sitting with large (potential) capital losses on 2 of them, however, I won't sell them at this level of a loss and will sit on them a while.

I was very glad today to get the opportunity to close one of the tobacco turns with a very small loss.

Week 6 Results:

Gain of $11.75 (weekly ROI of .16%) for a cumulative gain of $275.16 and a cumulative ROI of 3.67%.

This week's gain should have been higher except I misread a number and sold one turn for a loss when I thought it was a gain and I would have held on to it for longer.

Live and learn I guess.

As a reminder, ROI is figured based on the $7,500 initial investment and I only count closed turns. With turns being the amount of whole shares I can buy for $750. I might fudge a little and spend $760 or so if it is close.

Spock wrote: ↑

Fri Jul 22, 2022 11:17 am

Week 6 Results:

Gain of $11.75 (weekly ROI of .16%) for a cumulative gain of $275.16 and a cumulative ROI of 3.67%.

This week's gain should have been higher except I misread a number and sold one turn for a loss when I thought it was a gain and I would have held on to it for longer.

Live and learn I guess.

As a reminder, ROI is figured based on the $7,500 initial investment and I only count closed turns. With turns being the amount of whole shares I can buy for $750. I might fudge a little and spend $760 or so if it is close.

Some cash-in-Lieu of a spinoff deal showed up today after I closed the books for the week early.

So adjusted numbers for Week 6 are a Gain of $16,17 (.22% ROI) with a cumulative gain of $279.58 and a cumulative ROI of 3.73%.

Week 7 was the best week so far by far with a gain of $116.40 and a weekly ROI of 1.55%.

Cumulative gains of $395.98 and a cumulative ROI of 5.28%.

Most fun for me this week is that I was able to close one turn for a small gain that I had been sitting on for a month.

It had stubbornly hung around a (potential) 4% loss, but I will rarely close turns at a loss unless it is a small loss on a turn that I have been sitting on for awhile.

Haven't updated for awhile. Since Week 7-I believe.

Through Week-13 (Ended September 9) I had a cumulative gain on closed turns of 9.9%. No turns have closed in the last 2 weeks.

With the recent stock market drops there has been no activity and my 10 open turns are sitting with an unrealized loss of anywhere from a negative 10% to a negative 30% loss.

I have thought a lot about this as a weakness of the strategy and I have come to the conclusion that it really isn't. If I had owned certain shares and didn't trade them-it is likely that I would also be sitting on a similar substantial (unrealized) capital loss.

I have no plans to sell for these losses and I guess I will just sit on them and collect dividends until things turn around.

I do have to figure out how to account for 2 (or more) dividend payments in my spreadsheet as the strategy was built around only collecting one and selling it. Conceptually, it is not as easy as it sounds.

One plus, that I have previously mentioned, is that since I purchased the stocks right before the dividend date I will get half the year's dividend payment in just 3 months-etc etc.

The last few weeks I have made one minor change to the strategy and I have been converting the turns from $750 to $1,000 with the idea that I will have less moving parts to deal with as we move into harvest. So I have a few turns still at $750 and some at $1,000.

Oh well, the market downturn has solved the moving parts problem as it looks like it might be awhile before any of my turns close.

As time goes by I might close one turn at a loss just to start things moving again and see what happens.