July was insane! Not only did I hit a car with our Toyota and needed a replacement, I already searched, found and bought a new car, I sold nearly all BDCs, I was on a buying spree in the oil (drilling) sector and on top of all I took 4 days of for a short camping vacation on a nice lake. When I’m looking back, I can’t believe it all happened in one month.
Needless to say, the expenditures are over the top this month. To smooth out the very high costs for the “new” car, we’ll raise a credit for half of the sum. The “new” Volkswagen (10 years old) costs us 8200€, my part are 4100€. 2000€ will be financed over one year. On the other side I sold our Toyota for 800€ (bought him for 3000€ two years ago).
(assuming €:$ 1:1.1 currency exchange rate )
|Day Job Paycheck||$4529|
|Selling my crashed car||$880|
|Saved Net Income||22%|
Ouch! I managed to save 22% of my net income this is a new record low. And viewing forward to August where we’ll have our next two week vacation – it’s a bad saving time for me. But despite my (unforeseen) expenses, I managed to contribute $3300 to my broker account(saved over the last months).
Wow! What a buying spree! As I’m writing this report over a month later, it’s real pain to even type it in. What was I thinking regarding the insane overweighting in the offshore drilling sector? I know, I was thinking – “This is the bottom” – “It will rise again like it did back in march and finally the crude price will recover from this lows”. As we all know it wasn’t the low – in fact it was miles away and it is now projected the crude price will more likely stay depressed through 2016. We’ll see how long Noble will pay a this hefty dividend, it’s very likely they’ll cut the dividend soon. I also added new positions in KMI (I was waiting for this for a really long time – and hindsight – I should have waited a bit more) and NOV. Going forward I will continue to add to my energy positions, as long as the crude price will stay in this low regions. But maybe I will skip the offshore drillers for now.
On the sunny side I also bought into a new REIT – STAG an industrial REIT, I added to my GILD holding after the great quarter release and I added a new micro cap stock CPSI which is developing and selling IT solutions to small rural and community hospitals. I’m always on the search for interesting small cap companies which are paying a dividend. The market cap of CPSI (520M) only gets undercut by TIS (248M). Going forward, I will start adding smaller positions of $1000, because my broker commissions are $5 per trade which is about 0.5%.
170 shares of NMFC (closed position)
200 shares of TCPC (closed position)
200 shares of HTGC (reduced position)
800 shares of PSEC (closed position)
Another wow! I sold nearly all BDCs which means I’ll receive a tremendous cut in my dividend earnings. I don’t know if it was prudent to exchange these credit companies for offshore drillers, but at least for everything else I bought this month. Going forward, I still want to spice up the yield with some BDCs but obviously not with that much of an over exposure. I see MAIN as my safest bet in this sector and HTGC and TPVG as complementary plays. HTGC has a great track record but needs to deliver – TPVG on the other side is a relative new player which still has a really low leverage on his equity (0.25) and thus has much more room to grow. Both are technology focused BDCs and more like venture capital investors. Of all three MAIN should be my biggest holding.
And by the way WPC also includes a BDC, but as it is only a small part of the company I still see WPC more as a NNN REIT.
Obviously after last month dividend earnings, everything will be underwhelming, however the $95 will help to grow my snow ball too. As you can see PSEC still payed me a hefty dividend which will be missing for all future months. But this isn’t something bad, because I really didn’t like the way the management was doing business and more over for not communicating what is going on. I don’t want these kind of companies in my portfolio.