stock investment portfolio
Very broadly speaking, positive cash flow from rental income can be seen in a similar way to the float insurance companies use as a funding source for their investment portfolios. Client insurance payments are made with the understanding that pay outs will occur, sometimes years in the future, for any manner of claims. In good years, when income exceeds loss payments, this excess cash (float) can be invested in stocks and bonds to enhance overall returns and to help build a greater war chest for the inevitable bad years. A portfolio of properties brings in rental income and after maintenance expenses and mortgages are paid, positive cash flow can be used for investments - at least until that new roof is needed. Below are listed currently held stock and option contracts.
July 7, 2021
Shares Company Cost Market
50 Acuity Ads Holdings ADR. . . . . . . . . . . . . . . . . . . . . $254 $796
10 Axon Enterprises Inc. . . . . . . . . . . . . . . . . . . . . . . . . $816 $1,745
68 Chimera Investment Corporation. . . . . . . . . . . . . $1,051 $1,186
10 Crowdstrike Holdings Inc. . . . . . . . . . . . . . . . . . . . $1,201 $2,634
13 Freshpet Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $768 $2,080
5 Hubspot Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,181 $3,006
152 Kinder Morgan. . . . . . . . . . . .. . . . . . . . . . . . . . . . . .$4,615 $2,955
10 Lemonade Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $474 $1,345
1 Mercadolibre. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $599 $1,940
10 Novocure Limited. . . . . . . . . . . . . . . . . . . . . . . . . . . $624 $1,917
16 Pinterest Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $381 $2,125
1 Shopify . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $772 $1,463
944 Starbucks Corporation. . . . . . . . . . . . . . . . . . . . . . $1,042 $110,458
8 Square Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,034 $1,887
4 Wingstop Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $567 $649
6 Zoom Video Communications. . . . . . . . . . . . . . . $1,002 $3,474
Option Contract(s) Company Cost Market Gain/Loss
1 Starbucks Jan 21 2022 120 Put . . . . . . . . . . . . .(-)$3,299 (-)$1,025 (+)$2,275
2 Kinder Morgan Jan 21 2022 27 Put . . . . . . . . . .(-)$1,499 (-)$1,905 (-)$406
Cost Market
Total Common Stocks Carried at Market $12,548 $139,660
(2) Stock holdings Kinder Morgan & Chimera have declined (KMI substantially) since their initial purchases. Kinder Morgan is a natural gas pipeline company which charges a toll for fuel product transported through its vast network. Although we follow the ever controversial Elon Musk, his technological accomplishments and the stratospheric rise of Tesla stock, we do not agree that the end of fossil fuels is imminent. Electrical baseboard heating, for example, unless augmented by an expensive solar panel system (assuming orientation works) remains far more expensive than natural gas for home heating. Chimera is a mortgage REIT company whose profits have been dramatically reduced by now the lowest interest rates in history. Kinder Morgan pays a 7.32% annual yield and Chimera, having cut it’s dividend substantially, still pays a 13.53% annual yield. Hedge or mutual fund managers are forever under the gun to demonstrate performance or risk a cavalcade of share redemptions whenever the market declines. Conversely, we can hold these well managed companies indefinitely and continue to add shares through dividend reinvestments at the current market discounted price and / or enjoy share price appreciation as market conditions improve.
In many instances, we take small initial positions in companies to manage risk & to build out positions as stock prices fluctuate. We also think in terms of years for a thesis to play out with a resultant rise in stock price. Ideally our winners will far eclipse our losers keeping in mind the immortal words of the Motley Fool's TMF 1000: "If a stock performs great, a little bit is all I need & if poorly, a little bit is all I want". Stock holdings, partial or in their entirety, are subject to change due to capital needs (again that new roof). However, it is our goal to “buy and hold” regardless of macro economic and resultant manic market conditions, using cash on hand for operating expenses.