This is the second of three consecutive weeks in which I will abstain from the usual $250+ investment into the portfolio, thus maintaining the $250+ per week average. For those interested, here is how things would have played out.
This week, five of the portfolio holdings ranked in the Top Ten: FMCB, MMM, MO, TDS, and TGT.
Ticker
Account Value
FMCB
1,920.00
MMM
2,352.90
MO
2,638.42
TDS
2,635.80
TGT
1,309.20
The lowest amount belongs to TGT.
There are 13 positions in the portfolio and six of them are in the black. And yet, this week we have a record five portfolio stocks in the weekly Top 10. However, of the five above, FMCB and MO have delivered unrealized gains and TGT is not far off. Recall that those making it to the Top 10 are simply those with the highest expected total returns, not necessarily stocks whose prices have dropped the most.
Last week, I established a position in TGT with the usual $1,000 stake. In addition, another $250 in dividends and option premium had accumulated. However, because the latter funds materialized from within the portfolio itself and were not the result of a capital contribution on my part, only the $1,000 amount requires that I skip my typical weekly investment. This week is the first of three consecutive weeks in which I am abstaining from the usual $250+ investment into the portfolio, maintaining the $250+ per week average. For anyone bored out of their skull, here is what I would have invested in.
This week, four of the portfolio holdings ranked in the Top Ten: MMM, QCOM, TDS, and TGT.
Ticker
Account Value
MMM
2,237.67
QCOM
2,666.62
TDS
3,022.20
TGT
1,300.50
The lowest amount belongs to TGT.
TDS has climbed 25% over the last 10 trading days. The TDS230818C10 option1 sold for a high of $0.40 this past Friday, and if I could sell it for $0.45, the result of assignment at $10, would be such that I would make about $1.00 after adding in the previous option premiums and dividends collected. That’s $1.00 total, not per share. This would be an impressive performance given the entry into this position was at $14.54 per share on 2022-09-26. It is tempting to be able to make 0% on something with such a large negative total return, but I really want to see the next earnings report in early August. After all, investing is not about just outperforming, but outpacing inflation as well.
And Royal Dividends is about achieving an embarrassing amount of wealth2.
1This is a call option on 100 shares of TDS with a strike price of $10 and an expiry of August 18, 2023, that last sold for $0.40 per share or $40.00 per contract.
2Royal Dividends seeks wealth that is so massive one should feel embarrassed just having it. However, the other extreme – having performance so embarrassingly poor that it would have been thought statistically impossible – will also be considered mission accomplished. In other words, you want others to be able to look at your portfolio and marvel at the genius behind the decisions that were made and the sheer amount of wealth that has materialized as a result OR you want to feel the incredulity, pity, and understanding of others at just how improbably terrible your luck has been, despite your evident genius.
This week, four of the portfolio holdings ranked in the Top 10: FMCB, MMM, MO, and TDS.
Ticker
Account Value
FMCB
1,930.00
MMM
2,302.07
MO
2,627.40
TDS
2,839.35
The lowest amount belongs to FMCB. However, purchasing just 1 share of FMCB would cause a breach in stock exposure within the portfolio. More specifically, the six most heavily weighted stocks would be 72.7% of the portfolio, about 1% higher than the maximum allowable weight of 71.7%.
Investing $250 into MMM, MO, or TDS would do the same. Therefore, it is time to add a new position to the Portfolio for the Ages!
When is the last time you thought about linseed? Have you even seen that word in print lately? Did you know that linseed and flaxseed are the same thing? The seeds come from the common flax plant (linum usitatissimum) and if you’re crushing or pressing the seeds for human consumption in the form of fiber or oil, we tend to call it flaxseed. When the seeds are processed for the purposes of making furniture polish, paints, or cloth (linen…now we’re seeing things oh so clearly) then linseed is the more common term. Maybe. The truth is the terms are interchangeable and the use in the UK differs from American English.
So, you likely know that if you take a spoonful of flaxseeds and grind them up you have a small amount of flax meal you can add to a smoothie or baked goods for extra nutrition. Or you can add the whole seeds directly to some dough for a tasty multigrain bread. But do you know what you get if you scale your production way up and process tons and tons of linseed? You get rich.
There’s a company that has been crushing linseed for over a hundred years and on January 26, 2023, they announced a dividend increase that represents 50 consecutive years of annual increases in their dividend, making them a Dividend King.
This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.
Ticker
Account Value
MMM
2,316.56
MO
2,518.36
TDS
2,256.80
The lowest amount belongs to TDS. In order to invest a minimum of $250.00 in TDS, I need to purchase 35 shares this Monday. Below, is the purchase history and average cost calculation.
Like training wheels on a bike, I’ve provided support for this position in TDS several times. At some point though, the stock needs to be able to go on its own. That point may very well be next week, as to invest much more in TDS would mean a breach of portfolio weighting. This means there is a very good chance that next week will feature a new holding in the portfolio.
Oh, and there’s a new Dividend King in the Empire. Be on the lookout for a Co-ro-nay-she-own!
The stock market was down this week, a small correction from an otherwise good, multi-week run-up. In fact, the S&P 500 is up 13.25% YTD through June 23, 2023 (ignoring dividends). You’d never know it by looking at the Portfolio for the Ages. But let’s not look at the Royal Dividends portfolio just yet. Instead, let’s take a look at the seven largest companies by weight in the S&P 500.
Surprised? These seven companies, effectively 1.4% of the number of companies1 in the index, represent a whopping 27.9% by weight. The S&P 500 Index is market capitalization weighted and is heavily influenced by these overpriced juggernauts. The weighted average YTD price return of the magnificent seven is an enormous 68.7%. This means the remaining 493 companies are delivering a wonderful -8.27% YTD. Taking dividends into account would improve this gap ever so slightly, but let’s get real here – the S&P 500 in no way represents the broader equity market.
Unless you have decent exposure to the big seven, the market has been garbage.
This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.
Ticker
Account Value
MMM
2,404.42
MO
2,291.64
TDS
2,334.30
The lowest amount belongs to MO. In order to invest a minimum of $250.00 in MO, I need to purchase 6 shares this Tuesday (markets are closed on Monday). Below, is the purchase history and average cost calculation.
This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.
Ticker
Account Value
MMM
2,297.70
MO
2,351.44
TDS
2,056.20
The lowest amount belongs to TDS. In order to invest a minimum of $250.00 in TDS, I need to purchase 34 shares this Monday. Below, is the purchase history and average cost calculation.
This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.
Ticker
Account Value
MMM
2,358.19
MO
2,357.16
TDS
1,670.40
The lowest amount belongs to TDS. In order to invest a minimum of $250.00 in TDS, I need to purchase 36 shares this Monday. Below, is the purchase history and average cost calculation.
The average purchase price per share will be around $11.71 and a perfect strike price for a covered call would be $12.50. However, with Friday’s closing price just under $7.00, there are no bids for calls above the $7.50 strike price that aren’t too far into the future. It would be possible to sell a call at $7.50 for a decent premium, but TDS could easily hit $7.50 in a matter of days, and I do not wish to have my shares called away at a loss.
Therefore, I will refrain from writing a call at this time. Another good reason to hold off on covering the position at this time is the activist letter sent from GAMCO to the CEO of TDS Friday afternoon.
This week is the final of four weeks in which I am abstaining from the usual $250+ investment into the portfolio. This maintains the $250+ per week average. However, for anyone curious as to what I would have invested in, I present the usual material below.
This week, three of the portfolio holdings ranked in the Top Ten: MMM, QCOM, and TDS.
Ticker
Account Value
MMM
2,229.62
QCOM
2,538.05
TDS
1,615.20
The lowest amount belongs to TDS. This is no surprise as one would have to go back more than 35 years to February 19, 1988, to find a day where they closed lower than their $6.73 closing price on Friday.
