The Maneos Compounding Machine - September 2020 Update -
Seeking Alpha Analyst Since 2017
Pietros Maneos is the author of two poetry collections, the internationally renowned novella - The Italian Pleasures of Gabriele Paterkallos, and a work of aesthetic criticism titled American Bards & The London Reviewer. His essays have appeared in The Huffington Post, Mediterranean Poetry and Italian Americana. In addition to his literary pursuits, he is an avid real estate developer with his most noted development being Bramabella Vineyards in The Brushy Mountains of North Carolina.
Mr. Maneos is interested in the unconventional role of buy-and-hold leveraged etfs as part of one's long term compounding strategy. He has unveiled a website, ManeosCompoundingMachine.com to track the results of his investment strategies.
Summary
- "There will be good years and there will be bad years, but the compounding will continue on unabated." - Pietros Maneos.
- "If compound interest is indeed the 8th wonder of the world, then leveraged compounding is certainly the 9th, 10th and 11th." - Pietros Maneos.
- "A penny saved is just a penny earned, unless of course you double that penny every day for 30 days, which is then $5,368,709.12." - Pietros Maneos.
This is the first month since I started keeping track of my investments that I pulled money from The Maneos Compounding Machine instead of adding into it. The reason for this aberration is a real estate deal, and to be specific, a purchase of a single-family-home. Now normally, I am much 'in sympathy' with Robert Kiyosaki and Grant Cardone, both of whom are known for being against the single family home and instead advise one to purchase cash-flowing-investment real estate instead. The maxim: 'Your home is not an asset, but a liability' rings in my head from both, but I deviated from my existing stance due to socioeconomic changes within The United States of America. As American cities continue to decline due to chaos, violence, wanton destruction of private property, drugs and crime, or as my fellow Seeking Alpha writer and personal friend, Logan Kane, termed it: 'The upcoming November Bolshevik revolution,' suburbia/exurbia real estate asset prices will continue to hold steady, if not massively appreciate.
I think that you will see the flight of the 1% (and frankly anyone of any means) into gated suburban single family homes that have a bit of land, self-sufficient energy (solar panels, power walls, generators), pools, home gyms, and raised garden beds for both beauty and to counter-act the dependence on the food system. Essentially, those that can withdraw into self, apart from over-all Society will do so. Or to quote the British philosopher, Brian Barry: 'if the wealthiest fraction of a society feel that they can afford to insulate themselves from the common fate and buy their way out of the common institutions, that is also a form of social isolation.' Perhaps this will not come to pass, and the riots will subside over the next few months, but I do believe that there will be a marked separation of The Haves and The Have-Nots, with The Have-Nots being relegated to American cities and The Haves living in the leafy suburbs and beyond.
Having said the above, it caused me great pain to sell approximately $50,000 of bonds within the machine to make the purchase of a 'liability,' but I do think in the long run it will improve both my lifestyle and my net worth. Time will tell. I always tell people that 'I am Thomas Jefferson playing the role of Alexander Hamilton,' in that I am an 'old-money-aristocratic-country-gentleman' at my core playacting at being a 'manic-new-money-city-banker/investor,' as I am most at home in my garden growing Costoluto Genovese Tomatoes and Jimmy Nardello Peppers. Or put in another way: 'I knew that it was time to cease being a Romanov so as to become an Abramovich.' But moving on, this particular 'liability' will allow me to pursue my gardening/farming passion, which has idled since the sale of my very own Monticello, Bramabella. And what is the ROI of true happiness?
One of my investment goals is to have approximately $50,000 to $100,000 within my option strategy, and I am still able to achieve this goal with my new purchase, so I am happy about that. My aim is to pocket $2,000 to $5,000 a month in premiums from my Casino (errrr, my option strategy) and this month was no different, as I pocketed $4,986.54 on $82,000 of exposure, which is a 72.9% annualized return. The reason that I allude to the word - Casino - is that I believe those who sell puts and calls are playing the role of the Casino while those who buy puts and calls are playing the role of the gambler/speculator. I, of course, would much rather be the Casino than the gambler. As many of you know, my goal in pocketing the premiums is to buy Maneosian stocks, which are stocks that are trading at low P/Es with high dividend yields where the ratio is 1 to 2 between the two metrics. So with that being said, I purchased Prudential (PRU), PNC Bank (PNC), Met Life (MET), Lukoil, (OTC:LUKOY) Banco Santander (SAN), and Bank United (BKU).
9.17.20 - 26 shares of (MET) at $38.43 = $999.18
9.17.20 - 480 shares of (SAN) at $2.0958 = $1005.98
9.17.20 - 5 shares of (PNC) at $112.31 = $561.55
9.17.20 - 1 share of (PRU) at $69.12 = $69.12
9.18.20 - 10 shares of (PRU) at $68.74 = $687.40
9.21.20 - 10 shares of (OTC:LUKOY) at $59.04 =$597.35
9.21.20 - 2 shares of (PRU) at $66.19 = $132.38
9.22.20 - 4 shares of (PNC) at $107.74 = $430.96
9.22.20 - 20 shares of (BKU) at 21.7707 = $435.41
Total Purchases = $4,919.33
I also added two other leveraged ETF funds that I utilize within The Maneos Compounding Machine to the information below. I view the existing three as the main drivers, but I do also keep a bit of money in the other two and so I thought I should add them to the tracking. I have also added a YTD return, which is really from May 15th until September 30th, which is when the funds were transferred from Motif to Folio.
September 30th Update
Money Inputted into 'The Maneos Compounding Machine' = $522,080.00
Present Value of 'The Maneos Compounding Machine' = $664,133.83
Total Return = 27.20%
CAGR = 13.60%
Monthly Income = $6,110.12
Year-To-Date Income = Unavailable due to Motif-Folio Transfer
Money Inputted Back into The Machine = -$49,000.00 + $1,123.58 + $4,986.54 = -42,889.88 (Dollar Cost Averaging + Dividend Reinvestment + Option Premium)
Leveraged ETF Funds:
Balanced Alpha 3x Leverage = $107,804.90
YTD Return % = 14.17%
All Weather Alpha 3x Leverage = $80,779.30
YTD Return % = 2.79%
Balanced Alpha - Risk Optimized - = $11,603.48
YTD Return % = 0.4%
Balanced China Alpha 3x Leverage = $9,345.83
YTD Return % = 1.39%
Super Alpha 3x Leverage = $11,920.66
YTD Return % = 30.19%
Five Leveraged Funds Total = $221,454.17
Increase/Decrease % from the Previous Month = +1.26% ($221,454.17/$218,695.89 -1 = 1.26%)
Percentage of Entire Portfolio = 33.34% ($221,454.17/$664,133.83 =33.34%)
Analyst's Disclosure: I am/we are long UPRO.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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