My Current Thoughts

      I am pleased with the performance of both the Growth Fund and the Income Fund.  Note that there is no need for me to post weekly gains or losses as the performance of the funds is tracked on a separate page.  But I will say that I was actually surprised by the performance of VIPS being as good as it is.  They announce earnings on February 25th, so it may be case of “buy on the rumor, sell on the news”, so don’t be upset if the stock underperforms on that day.  I would still hold on the stock as well as all of the others in the portfolio.  As for the Income Fund, several of the stocks have underperformed, but remember that the primary purpose of this fund in income via dividends, so again, just sit back and enjoy receiving dividend payouts in excess of the S&P average.  

     As for the market in general, the current P/E is certainly above average, but as many have said, interest rates are extremely low, which justifies the outsize current multiple.  In the current environment, it may be a good time to take profits if you have them – particularly if your stock as doubled, maybe sell 1/2 so you are “playing with the house’s money” – you are limiting further gains, but you are protecting against loss as well.  Or maybe sell some covered calls if you are mildly bearish on a stock.  Your stock may get “called away” at the strike price but you will have collected the income from the call as well getting the sale price of the stock.  Note that the single ETF in the income fund (JEPI) takes a similar approach and it has outsize distributions.

    Finally, on the Gamestop (GME) issue.  Personally, I applaud those who saw that the stock was short 140% and took advantage of that.  But I don’t think that it was all small investors participating in the short squeeze – logically, I don’t think that even a large group of small investors has enough “muscle” to drive the price up from about 40 to 400.  There is evidence that there were big buyers (10,000 shares and up) participating as well.  As for increased regulation, I don’t think that is the answer.  Those investors who were burned by Robin Hood will take their business elsewhere (and many have already).  To me, with zero commissions, I don’t know why anyone would use Robin Hood instead of a more established broker like Charles Schwab, Fidelity or any of the other more mainstream brokers.  The big brokers have financial wherewithal to handle huge volumes better than Robin Hood (although they may still have to limit trading in extreme conditions, but it is less likely – Schwab has about $3.5 Trillion under management!).  As for shorting stocks in general, it is a necessary part of an efficient market, and I certainly would not ban it but I would like the SEC to bring back the “uptick” rule, which states that a stock can’t be sold short unless that there is a price increase of at least a penny (it used to be 1/16th of a point until decimalization – maybe still make it .0625!).  

    Well, these are my thoughts on a cold February.  I hope you are well and I wish you great investing success!  Please feel to comment or contact me directly.