Value Investment Fund – 05/31/26 Report

Each month, the Value Investment Fund reports its results through the last day of that period. The following is a report on all activity during May 2026, along with the current financial status of the Value Investment Fund.

During May 2026, the Value Investment Fund had two transactions. The Fund had the following activity:

1) Target – 05/14/26 Dividends Earned of $1.14/Each for $798 Total, Payable on 06/01/26.
4) Margin Account – 05/31/26 Paid $546.30 of Interest on $54,630 Principal Balance.

Net Fund Balance on 04/30/26 = $309,549

Value Investment Fund
Balance Sheet
05/31/26

ASSETS
Cash ($930) *Covered by Overdraft Privileges
Dividends Receivable 1,148
Securities Portfolio #of Shares Basis Market Value
Target 700 $63,700 $88,249
Lululemon 300 48,300 39,054
Wendy’s 9,000 82,500 67,050
Disney 678.2 70,031 68,383
Conagra Brands 1,000 15,630 13,030
UDR, Inc. 1,000 36,000 35,900
Essex Property 200 50,616 54,328
Subtotal $366,777 $365,994 365,994
TOTAL ASSETS $366,212
LIABILITIES
Taxes Payable on Dividends/PUTs Earned 2nd Qrt ($1,583) Less Interest of $1,093 137
Overdraft Protection 930
Tax Deferral on Unrealized Gains/(Losses) of ($783) @28% (219)
Margin Account Balance 54,630
NET FUND BALANCE $310,734

The following schedule reflects the cash reconciliation for the month:

Cash Balance on 04/30/26 ($384)
Interest Paid on Margin Account (546) * 1% EOM requirement
Cash Balance on 05/31/2026 ($930) * Negative Balance Covered by Overdraft Protection

The Fund currently has two open PUT Option contracts; the following schedule provides the current status:

Name # of Shares Strike Price Expiration Date Financial Exposure Current Market Value Status
Essex Property Trust 400 $240.00 01/16/2026 $96,400 $260.68 8.6% Safety Margin
Essex Property Trust 500 $240.00 07/17/2026 $120,500 $271.64 13.2% Safety Margin
Target* 1,000 $85.00 12/17/2027 $86,000 $128.75 51.5% Safety Margin

*Target’s PUT Options are referred to as LONG PUTs due to the expiration date being 19 months out. Thus, the margin of safety is irrelevant in the overall risk status.

There is a low possibility that the Fund will have to comply with the Essex Property Trust exposure. Essex Property Trust reported financial results for the first quarter of 2026 on April 28, 2026. Essex’s gross profit margin, excluding the sale proceeds in 2025, is $14 million ahead of the same period in 2025. In April of 2025, the market price was $250 per share and rose to over $275 by the end of December 2024. The facilitator feels that the risk exposure for Essex is low, considering how much this aligns with historical patterns. On 06/01/26, Essex’s market price improved to $280 per share.

After 6.667 years of activity, the Value Investment Fund is averaging a 22.9% annualized return.

Value Investment Fund – Analysis

The Fund continues to adhere to four core principles of 1) risk reduction, 2) maintaining a margin of safety with the buy price, 3) setting the sell price via financial analysis, and 4) patience. Currently, the overall market is driven by the Magnificent Seven stocks, which are all members of the NASDAQ 100 and the S&P 500. These include:

Alphabet (Google)
Amazon
Apple
Metaa (Facebook, Instagram)
Microsoft
Nvidia
Tesla

Furthermore, there are another four NASDAQ 100 stocks that produce computer chips that are also showing massive market price increases, all driven by the underlying AI requirements and construction of data centers. This has swelled the market index for the NASDAQ 100 and the S&P 500, the two key indices this Value Investment Fund portfolio compares against. The NASDAQ 100 has seen a 22.7% annualized return over the same time period, while this site’s Fund has a 22.9% return. The NASDAQ 100 has experienced a 20% increase in year-to-date 2026 alone. If this continues, the NASDAQ will see a 42% increase in 2026.

This pattern cannot hold as these dozen stocks are driving a technology-based market bubble. This happened back in 2000, and the dotcom bubble burst in March of 2001. The market for these investments experienced a 30% correction. This site’s facilitator feels the same will happen again at some point over the next 12 months. This will reset the NASDAQ 100’s overall annualized return to the 18 to 19% range over the same seven years as this site’s Value Investment Fund. This site’s Fund has no investments in technology at this time.

Another factor affecting this Fund is the uncertainty surrounding the Strait of Hormuz and the current conflict with Iran. Once this is settled, the current investment portfolio will experience market price improvement as overall consumer sentiment will improve. Lastly, the Facilitator believes there will be an offer to take Wendy’s private. From the intrinsic value article written three years ago, Wendy’s is worth around $11 to $12 per share. The plan was to hold the shares for upwards of four years as the market price will slowly grow to $16 per share. Currently, the portfolio of shares (three tranches) was purchased starting last summer (August, 2025) through October of 2025; thus, the holding period is not quite a year yet. It is conceivable that an offer will be tendered before year-end 2026 for around $14 per share. This will generate a 50% annual return on the investment. Act on Knowledge.