Value Investment Fund Status Week 7 – Tough Week
During the week ending December 12, 2020, the Value Investment Fund retracted 4.26%. Whereas the DOW only reported a decrease of .6%. The lack of action in Congress greatly affected the REIT Pool as its value decreased 6.25%. Inaction to support the economy overall affects confidence in the ability of tenants to pay their respective rents. Since the REIT Pool is strictly traditional apartment style real estate, this pool felt the brunt of this political mess.
At the beginning of the week, the Investment Fund’s status stood at $119,024 (see Week 6 report) and then on Friday night after closing (December 11, 2020) the Fund’s balance stands at $113,959. The following is the Fund’s respective individual balances by pool along with cash and dividend receivables:
REIT Pool # of Shares Cost Basis Market Price* Fair Market Value
– Equity Residential 574.459 $30,000 $57.94 $33,284.15
– Essex Property Trust 48.9644 10,000 242.94 11,895.41
– UDR 606.9803 20,000 37.14 22,543.25
Sub-Totals $60,000 $67,722.81
Railways Pool
– Union Pacific 114.9557 20,000 204.20 23,473.95
Banking Pool
– Comerica Bank 369.9593 20,000 51.69 19,123.20
Dividend Receivables (Norfolk Southern & Union Pacific) 111.50
Cash on Hand (Sale of Norfolk Southern & Options) 3,527.59
Totals $100,000 $113,959.05
*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.
The Investment Fund’s overall status for the two months to date for the new year against three of the top indices is as follows:
DOW Jones Industrial Average 2.35X Higher
S&P 500 2.3X Higher
S&P Composite 1500 2.1X Higher
Overall, the fund is outperforming the market even with this week’s setback. One of the core four principles of value investing is patience. Since the COVID-19 vaccine will begin distribution to the country soon, it is just a matter of time to see recovery and acceleration with REIT stocks. While most of the market has already displayed market price recovery from the market decline back in March of 2020, REIT’s have not recovered due to the higher than normal unemployment status nationwide. As this begins to turn positive, REIT investments will accelerate with their market price recovery back to pre-COVID prices. It is just a matter of time.
New Activity During Week 7:
- Purchased Comerica Bank – As stated in prior weekly updates, the Investment Fund needed at third pool of investments. Banking was selected as this pool due to greater risk management (covered in the Pool’s write-up, which is a membership only article).
- Received dividends from Norfolk Southern Corporation.
- Sold PUTS on Norfolk Southern earning $427
New Information Released During Week 7:
As covered in multiple articles and lessons, patience and adherence to the respective buy/sell models will generate far superior returns with value investing over any other investment model. Act on Knowledge.