Month End Summary – November 2020

November kept the trend going for me and added to may gains for the year. The bounce back in QQQ was a big help and more than made up for the paper losses on my short TLT shares. I remained too timid after the election and missed some upside, but didn’t want to blow my gains for the year if I was correct in my hesitation. I’d love to see a solid 10% correction so I could dive in deeper, but that might not come for a few months based on the euphoria that’s still out there on election finality and vaccine expectations.

My account ended November with a Net Asset Value (NAV) of $111,798.00 according to Interactive Brokers (IB) after ending October with a balance of $109,240.07. I had a gain of $2,557.93 (~2.34%) on paper for November (better than the Dow’s 4.61% loss and the S&P’s 2.77% loss). I made no trades in this account for all of November, so I had no realized gains.  I did have to pay $84.73 in dividends from my 500 short TLT shares and $18.44 in short interest for my short TLT shares. The $489.26 in paper gains from my five TLT December $152 covered puts more than covers my cost of being short.

Quicken reported that I have an account value of $111,815.61, which is the same as what IB shows after I subtract the negative $17.61 in interest accruals that IB adjusts in advance of the actual payments.

I’m only 26.39% invested in this account as of the end of November, 2.94 percentage points more than the end of October. I have $82,293.16 left in uninvested cash and no options set to expire in November. This cash total is definitely off some since I’m still sitting on a $11.02 paper loss per share on my 500 short shares of TLT, not including the premiums I’ve received. I’m close to a profit on my TLT position when I include the premiums and should be profitable again after I sell new covered puts in December.

I almost regretted selling such a high strike for my QQQ covered call when QQQ dipped below $270, but now I’m glad I aimed high. It could’ve been nice to cover that short call a few weeks ago, but if it’s assigned in just over two and a half weeks, I’ll have $700 more than I have now with the time value of the premium gone and a little more intrinsic growth in the share price. Then, I’ll just start over.

This is my asset allocation in my IB account as of the end of November 2020:

• Large-cap ETF: 26.80% (Only QQQ for now)
• Mid-Cap ETFs: 0%
• Small-Cap ETF: 0.0%
• International: 0%
• Individual Stocks & Other Sector ETFs: 0%
• Bonds: -71.57% (not including my TLT December covered puts)

Here’s how I compare to the major indexes:

• Dow Jones: YTD change +3.86%, 12-month change +5.66%
• S&P 500: YTD change +12.10%, 12-month change +15.30%
• NASDAQ Composite: YTD change +35.96%, 12-month change +40.77%
• Small-caps: YTD change +6.45%, 12-month change +8.42%
• Mid-caps: YTD change +11.86%, 12-month change +13.93%

My return according to Quicken through November 30, 2020:

• YTD change: +11.8% (not annualized)
• 1 Year change: +12.99%

The VIX ended the month at 20.57 and the VXN ended at 26.68. The VIX finished November 17.45 points higher than the end of October. The VXN finished 14.62 points higher. The VIX peaked on November 2, when it hit an intraday high of 38.78, coming down from its late October highs. The VXN peaked the same day at 42.92. Volatility is lower now than it has been since late February when investors began to understand the gravity of how serious COVID-19 would be for the economy. Now that we’re post-election and the vaccines are expected to start rolling out soon, all eyes are on what the next catalyst will be. Spending might be slower to resume than many bulls expect and at some point, that could give us the correction we need to shake out the weak at heart.