Value Investment Fund – 06/30/26 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 June 2026, along with the current financial status of the Value Investment Fund.

During June 2026, the Value Investment Fund experienced nine transactions. The Fund had the following activity:

1) Target/Conagra – 06/01/26 Dividends Earned of $1,148 (Target $798, Conagra $350), AR Balance on 05/31/26 is paid on 06/01/26.
2) Wendy’s – 06/01/26 Earned $1,260 in dividends at 14 cents per share. Wendy’s paid this amount on 06/15/26.
3) Essex Property Trust – 06/05/26 Sold 200 Shares at $287.63, netting $57,326 after $200 of transaction fees. A capital gain of $6,710 was recorded.
4) Wendy’s – 06/05/26 With proceeds from the sale of Essex, the Fund purchased a fourth tranche of Wendy’s, 3,000 shares, at $6.91, including a 25-cent-per-share transaction fee. Total Fund balance for Wendy’s is 12,000 shares with a basis of $103,230. The fourth tranche costs $20,730.
5) Disney – 06/30/26 Earned $508.65 as dividends from Disney; 75 cents/share payable on 07/15/26. 678.1999 shares at 75 cents = $508.65
6) Lululemon – Sold 300 PUT Options at a net of $10.05 each (net of $1/Share transaction fee) netting $3,015; Strike Price = $100; Termination Date of 03/19/27.
7) Margin Account – 06/05/26 Paid $30,300 on the Margin Account, $30,000 as principal and $300 as terminating interest (1% fee on principal paydown).
8) Margin Account – 06/30/26 Paid $246.30 of Interest on $24,630 Principal Balance.
9) IRS – Paid $3,401.82 in taxes on earnings from dividends, sale of PUT Options, and capital gain from sale of Essex Property Trust.

Net Fund Balance on 05/31/26 = $310,734

Value Investment Fund
Balance Sheet
06/30/26

ASSETS
Cash 7,338
Dividends Receivable 509 *Walt Disney Company
Securities Portfolio #of Shares Basis Market Value
Target 700 $63,700 $90,727
Lululemon 300 48,300 33,954
Wendy’s 12,000 103,230 96,300
Disney 678.2 70,031 64,585
Conagra Brands 1,000 15,630 13,200
UDR, Inc. 1,000 36,000 38,920
Subtotal $336,891 $337,886 337,886
TOTAL ASSETS $345,733
LIABILITIES
Taxes Payable on Dividends/PUTs Earned -0-
Tax Deferral on Unrealized Gains/(Losses) of $995 @28% 279
Margin Account Balance 24,630
NET FUND BALANCE $320,824
Lifetime to Date Earnings – $311,988.78 on a $100,000 Investment = 23.3% Average Annualized Return over 6.75 Years.
Income Taxes Paid Lifetime to Date – $87,357

The following schedule reflects the cash reconciliation for the month:

Cash Balance on 05/31/26 ($930)
Rcvd Dividends Balance 05/31/26 1,148
Sale of Essex Net Proceeds 06/05/26 57,326 *Paid $200 in fees
Purchase 3,000 Shares of Wendy’s 20,730) *Includes $750 for transaction fees
Paid Down Principal on Margin Acct 30,000)
Paid Termination Interest Margin Acct (300) *1% Termination Interest Charge
Earned and Received Dividends Wendy’s 1,260
Sold PUT Options on Lululemon 3,015
Paid IRS Taxes for 2nd Qrt 2026 (3,202) *Total Earnings in 2nd Qrt of $11,434.65
Interest Paid on Margin Account (249) * 1% EOM requirement
Cash Balance on 06/30/2026 $7,338

The Fund currently has three 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 $291.59 21.5% Safety Margin
Lululemon 300 $100.00 03/19/2027 $30,300 $114.18 14.2% Safety Margin
Target* 1,000 $85.00 12/17/2027 $86,000 $130.61 53.6% Safety Margin

*Target’s PUT Options are referred to as LONG PUTs due to the expiration date being 18 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 07/03/26, Essex’s market price improved to $298 per share.

After 6.75 years of activity, the Value Investment Fund is averaging a 23.3% 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 22.4% return. The NASDAQ 100 has experienced a 20% increase in year-to-date 2026 alone. If this continues, the NASDAQ 100 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. As of 07/03/26, Wendy’s market price is $8.60 which happens to match this Fund’s avereage cost basis per share. Act on Knowledge.