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HomeValue InvestingWorth Funding Fund - Finish of Yr 2021 Report

Worth Funding Fund – Finish of Yr 2021 Report

Value Investment Fund

“The unhealthy information is time flies. The excellent news is you’re the pilot.” – Michael Altshuler

Throughout 2021, the Worth Funding Fund recorded an excellent 41.08% return on its December 31, 2020 steadiness of $116,231. The Worth Funding Fund ended 2021 with a steadiness of $168,430. The distinction consists of the next types of earnings:

  • Realized Positive factors, 6 transactions                                                                        $46,801
  • Much less Unrealized Positive factors at 12/31/20                                                                  (11,892)
  • Dividends Earned                                                                                                2,451
  • Sale of PUTs                                                                                                        2,861
  • Unrealized Positive factors (See Beneath’s December Finish of Month Report)                   11,978

The efficient annual return on the funding equals 41.08%. The goal for a worth investor is greater than 30% per 12 months. What helped increase this good return was the general market good points throughout 2021. The DOW Jones Industrial Common elevated 18.73% which is an excellent 12 months for the DOW. Over the past 20 years, the DOW averages an annual return of 11.3%. An identical sample holds towards the S&P 500. Throughout 2021, the S&P 500 generated a return of 26.61% and during the last 10 years it averaged 12.15%. Even with changes for the higher than common returns throughout the board out there, this web site’s Worth Funding Fund nonetheless beat the aim of at the least 30% per 12 months.

Worth Funding Fund – Finish of December Report

                                                                                                      December 31, 2021       December 31, 2021       November 30, 2021
REIT Pool                                          # of Shares     Price Foundation       Market Worth*         Truthful Market Worth*     Truthful Market Worth*
   – No Inventory Holdings (All six REIT’s are at or close to their all-time highs)
Railways Pool
– No Inventory Holdings (All six railroads are at or close to their all-time highs)
Insurance coverage Pool
.   – No Inventory Holdings (All 5 insurance coverage corporations are at or close to their all-time highs)
Army Contractors Pool
.    – Huntington Ingalls Industries         112.9943             20,000               185.74                     $20,987.56                      $19,944.62
Banking Pool
.    – Wells Fargo (Tranche #1)                   292.0560             10,000                 46.98                      $13,720.79                      $13,662.38
.    – Wells Fargo  (Tranche #2)                   558.9715             20,000                 46.98                        26,260.48                        26,148.69
.    – Wells Fargo (Tranche #3)                           234.3292             10,000                 46.98                        11,008.79                        10,961.92
.       Sub-Totals                                                                  40,000                                                 50,990.06                        50,772.99
Dividend Receivables                                                                                                                        -0-                                   217.07
Money on Hand (Foundation, Positive factors, Dividends, PUTS)                                                                         96,452.17                        96,235.10
Totals (Beginning Price Foundation = $100,000)                      $60,000                                              $168,429.79                     $167,169.78

*Web of transaction charges of $1.00 per share; thus the quantity within the schedule equals the precise market value per share at closing much less $1.00 per share.

On 12/10/2021, the Fund’s finish of week steadiness hit the very best level throughout 2021 at $170,752. On the time of this publish’s era, 01/17/22, the Fund’s steadiness is $182,329 reflecting the dramatic enchancment tied to Wells Fargo; learn Wells Fargo One Yr Report for extra clarification.

Worth Funding Fund – Threat Publicity As a result of PUTs

PUTs are an choices software employed with worth investing to leverage the annual earnings of a portfolio. The thought is to promote an choices contract to personal a specific funding at tremendous low cost to intrinsic worth. In impact, it is a perfect software to earn cash and if the economic system, business or firm takes a deep dive with market worth, an investor can personal a safety at a really low value. On the whole, worth traders will solely place in danger roughly 60% of a Fund’s starting 12 months value foundation (defined in additional element in Part III of this web site’s membership program). At 12 months finish 2021, the Worth Funding Fund held the next choice contracts:

Starting Yr Price Foundation – $104,339 (Starting Steadiness of $116,231 much less Unrealized Positive factors of $11,892)
Most Place in Choice Contracts at 60% of Price Foundation – $62,603

  • Union Pacific Railroad – bought in Feb 2020 with a strike value of $155/share and an expiration date of January 21, 2023              $20,000
  • Norfolk Southern Railroad – bought in March 202 with a strike value of $190/share and an expiration date of January 21, 2022      $20,000

Present market costs for the respective shares on 12/31/2021:

  • Union Pacific Railroad – $251.93
  • Norfolk Southern Railroad – $297.71

Given the close to time period expiration of Norfolk Southern Railroad in 21 days, the probability of exercising these choices are distant within the subsequent quarter. Going into 2022, the Fund’s value foundation is $156,452. The utmost publicity allowed associated to PUTs is reset to $93,871.

Worth Funding Fund – Reconciliation of Ending Steadiness 12/31/21 to the Worth Funding Fund Steadiness 2 1/4 Yr Chart

This web site’s Worth Funding Fund began on 10/21/2019 with an preliminary steadiness of $10,000. After two and 1 / 4 years, the facilitator wanted to restate the Fund’s exercise such {that a} single annual price of development may very well be decided and there would solely be one reported evaluation. In impact, the unique funding of $10,000 was restated as if had been $100,000 and every transaction that occurred from October 2019 by way of October 2021 was elevated by an element of 10. As well as, any realized good points, dividends and gross sales of PUTs had been taxed at 28% per the aim of this Fund to behave as an unbiased authorized entity. 

In the course of the 5 quarters (October 2019 by way of December 31, 2020) the Fund had the next breakout:

  • Preliminary Fund Funding October 2019                                                $100,000
  • Realized Positive factors/Dividends/Sale of PUTs                                                 26,311
  • Taxes Paid on Realized Earnings to Date                                                (7,367)
  • Unrealized Positive factors on 12/31/2020                                                             11,892 (See Above 2021 Schedule)
     Worth Funding Fund Steadiness on 12/31/2020                                 $130,836

The Fund reported a return of 34.41% in 2020 reflecting a starting steadiness on 01/01/2020 of $103,170 with a value foundation of $101,947 (unrealized good points of $1,124 existed on 12/31/2019). Throughout 2020, the Fund realized $23,608 in good points/dividends/sale of PUTs; and unrealized good points of $11,892 for a complete realized/unrealized return of $35,500. This $35,500 is split by the Fund’s beginning steadiness on 01/01/2020 of $103,170 and the result’s 34.41%.

The beginning Fund steadiness on 01/01/2021 was $130,836. Throughout 2021, the Fund had the next breakout:

  • Preliminary Fund Funding 01/01/2021                                                        $130,836
  • Realized Positive factors/Dividends/Sale of PUTs                                                     53,661
  • Taxes Paid on Realized Earnings to Date                                                  (15,025)
  • Development in Unrealized Positive factors on 12/31/2021                                                      86  (See Above 2021 Schedule Much less Starting Steadiness of $11,892 Mirrored in Whole Fund Steadiness on 01/01/2021)
     Worth Funding Fund Steadiness on 12/31/2021                                     $169,558  (Beginning Steadiness on 01/01/2022)
  • Conversion Fairness Contribution to Steadiness to Month-to-month Report                 (1,128)
    Worth Funding Fund Steadiness on 12/31/2021 (See Report Above)     $168,430

Whole development throughout 2021 consists of the realized earnings plus the rise in unrealized quantities for a complete of $53,747. That is divided by the start Fund steadiness of $130,836 to determine an annual return of 41.08%. This now reconciles to the 2 and quarter years chart as displayed on the primary pages and plenty of articles on this web site. The fairness contribution quantity of $1,128 displays conversion of two separate unbiased reporting tracks (calendar and financial years) used traditionally on this web site to calculate the assorted returns. Now the Fund steadiness displays the precise quantity earned internet of taxes by way of 12/31/2021. In impact, the $1,128 contribution permits the fund to transform from a fiscal reporting cycle to a standard calendar 12 months cycle. This now precisely depicts the Funding Fund’s development since inception. Act on Data.



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