Y H & C Investments August 2023 Update- Edition 179
Summertime and the living is easy.....
Index July 2023 Return Year-to-Date Return
Dow Jones
35, 555.53 +3.32% +7.28%
S& P 500
4481.38 +2.81% +19.31%
Nasdaq
14, 346.02 +3.50% +36.64%
Russell 2000
2003.28 +5.61% +13.74%
Oil- 84.91
(Brent) +11.72% -1.10%
Gold-
2009.20 +3.84% +9.47%
Silver-
24.972 +7.70% +2.94%
10 Yr. Treasuries-
Yield-3.375% +10.1 BP +7.9 BP
WSJ/US Dollar Index
96.30 -.64% +.25%
Bitcoin
29, 247 -5.02% +76.44%
Y H & C GARP Portfolio (Returns not GIPS Certified)
+8.1% +10.2%%
Y H & C Concentrated GARP Portfolio (Returns not GIPS Certified)
+6.2% -3.5%
Summertime and the Living Is Easy: Little Volume, No Panic! (Return figures in this section come from the May 31, 2023, edition of the Wall St. Journal. Y H & C Investments may have company positions in this newsletter. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives)
Many people enjoy the summer because of the hot weather. Kids enjoy it because there are no academic requirements. Some like it because they are off to camp. Many families use the time to travel to distant countries and experience worlds they could only imagine. In the financial markets, summer is associated with a quiet time, as many investment professionals retreat to a second home, often in the Hamptons or in Europe.
From a scheduling standpoint, with the end of June comes the second quarter earnings season. There are four crucial times for all investors, and they are when companies report their financial results. Stock performance is based on earnings, so results are always closely watched. It means no matter where you are, be it the Hampton’s, Europe, on the beach, at the lake, in a boat, or in a different country, if you are a full-time investor, you are paying attention to earnings season.
Even in the middle of current earnings, the trend over most summers is of much lower trading volumes. Markets are looking at the potential of the end of tight monetary policy and have decided things seem much better. Certainly, investment psychology is not nearly as gloomy as it has been.
Y H & C July Activities
July was a relatively quiet month for my company. I compiled and communicated client results and continue to work on transitioning the custodian from TD Ameritrade to Schwab. Earnings season is always a time to pay particular attention to conference calls so reading these business results is mandatory, and quite informative as well.
Y H & C Industry & Holding Update! (YH & C Investments may have positions in companies mentioned in this newsletter. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives)
The two areas of my focus over the first few weeks of earnings season have been banks and real estate investment trusts (REIT). With the media paying close attention to the high-profile announcements of large fund family companies like Blackrock, Blackstone, and PIMCO, commercial real estate is suddenly caught in the crosshairs of ongoing negative sentiment. The largest money center banks have long reduced their exposure on the commercial real estate front. In banking, each entity is its own unique enterprise. Some banks have a retail arm, a commercial banking division, credit cards, trading, investment banking, and wealth management. Others have only a few of these division segments. Payment processing is also an area many regional banks are involved in. A prime focus for bank investors is whether deposits are growing and in which area, interest-bearing or non-interest-bearing. Loan losses and real estate performance and exposure are also areas bearing close scrutiny. As far as our holdings are concerned, the largest ones continue to post billions in profit. The smaller entities don’t earn as much but are still performing well. The community bank area is interesting as many have unique enterprises which are consistently profitable. As long as there aren’t any bank runs, and there haven’t been since March, banking remains interesting.
On the real estate side, our holdings posted good results. No surprises, high-quality assets that are 90 percent plus leased prove to be very much worth owning. When interest rates start to come down, REITs and banks may see a vastly different sentiment from the investment world.
Thanks for reading the newsletter this month, and if you think it is worthy, recommending it to a friend or family member would be greatly appreciated.
(Y H & C Investments may have positions in companies mentioned in this newsletter. It is the responsibility of each investor to research the investments mentioned so they can decide on the appropriateness and suitability of the investments consistent with their risk tolerance, risk constraints, and return objectives)