Zero Bound

I have had a TreasuryDirect account for many years.  This is linked to a bank account and allows you to buy and hold government securities.  From time to time I have used it to buy Treasury bills (TBills) which are government bonds which mature in a year or less.  Bills are sold at a discount and redeemed at their face value when they come due.  You can arrange to have the bills rollover when they come due.  That is the redemption amount is used to buy a new bill (of the same term and amount) with the discount remitted to your linked bank account.  

I had been rolling over 13 and 26 week bills for some time but eventually stopped and moved the money back to my bank account after interest rates remained near zero for years after the financial crisis of 2008.  When interest rates recovered a bit (to around 2%) in 2019 I started buying and rolling over bills again, this time 4 and 8 week (which I don't think they used to offer).  But the COVID epidemic has again caused rates to fall to near zero.  And in the case of the 4-week bills not just near zero, actually zero.  The last few auctions have settled with a zero interest rate.  This is a little annoying although it does have the advantage that I don't have to deal with recording the tiny deposits from a near zero rate.  But it will be really annoying if the rates go negative which they theoretically could do.  I expect the government will try to avoid this but if they don't I will stop the rollovers.  Perhaps I should anyway, my bank isn't paying a lot of interest but it is more than zero.

2020 Taxes

 Although the deadline was extended to May 17 I managed to get my 2020 income taxes done on the usual schedule.  I submitted my federal return electronically late on April 13 and mailed my New Jersey return the next day.  I mailed the New Jersey return because I am too cheap and stubborn to pay the fee (about $20) to submit it electronically.  I used TurboTax Deluxe again as I have every year since 2010 (for tax year 2009).  I have complained about the program in prior years but I didn't have any big issues this year.  One minor problem was some directions which weren't correct for seniors (the tax laws are a little different when you pass age 65) but this wasn't too hard to figure out and I certainly have no desire to return to doing my returns by hand.

My federal refund didn't show up in my bank account until May 5 which seems a bit longer than normal.  For some reason it was for $5.95 more than computed on the return I submitted.  To date I have not received any explanation (perhaps they don't bother sending a letter for such a small amount).  It is possible I copied some number from a 1099 form incorrectly and this was automatically corrected but I don't really know.  This is bugging me a little but probably not enough to pursue the issue.  I haven't heard anything from New Jersey which has sometimes been quicker.  However it's probably not the right time to be expecting record speed.

2020 Portfolio Review

Last year my main brokerage account had a total return of 8.97% (6.75% capital gain, 2.22% income). As usual I will compare to VOO, Vanguard's S&P 500 ETF, which returned 17.98% (16.19% capital gain, 1.79% income).  So I lagged the market by 9.01% which is a substantial amount especially considering that almost half of my portfolio was invested in VOO.

The main reason for my underperformance was that the steady dividend paying stocks that I prefer were out of favor (at least in a relative sense) last year.  At the beginning of the year I had 29.45% of my portfolio in individual stocks and 11.49% in ETFs (other than VOO).  The individual stocks returned 2.49% (-.53% capital gain, 3.02% income) accounting for 4.56% of under performance and the ETFs returned -6.15% (-9.49% capital gain, 3.34% income) accounting for another 2.77% of underperformance.  

A secondary reason for my underperformance was that I was not fully invested.  I started the year with 12.23% in cash (the remaining 46.83% was in VOO). During the year I invested 1.75% of this cash.  The remaining 10.49% in cash only returned about .51% in interest accounting for 1.83% of underperformance.

On March 18 I bought Fortis (FTS) a Canadian utility and added to VPU, Vanguard's utility ETF.  This was good timing as the market bottom (with respect to VOO) was on March 23.  However I would have done better buying VOO which returned about 60% from March 18 as opposed to about 33% for FTS and about 19% for VPU.  Still because of the good timing this portion of my portfolio outperformed by .16%.  This all adds up to 9% of underperformance in reasonable agreement with the actual 9.01%.

Only 2 of my individual stocks (BLK and TGT) beat the market by more than 10%.  Another 4 (BBL, CAT, NSC and UNH) were within 10% of the market return.  The remaining 15 (ALL, BNS, CM, ED, CVS, XOM, INTC, IBM, JPM, MET, PEG, SOUHY, TD, WFC and WBK) trailed by more than 10%. And all of my ETFs (except VOO) trailed VOO over the whole year by more than 10%.

When I started doing these reviews I only had one brokerage account which was funded with the IBM stock I had acquired over many years through their employee stock purchase program and which my new employer required me to mostly sell. I also owned some stock received by gift or inheritance in certificate or book entry form. Starting in 2018 I moved some of this stock as well as some cash and my Value Line mutual fund into a second brokerage account. In 2020 this motley collection returned 13.07%.     

Try, Try Again

As I have mentioned a couple of times, in 2010 I bought a cheap Dell Inspiron laptop computer. It has held up pretty well with a lot of use. However a couple of years ago it developed an annoying issue. The automatic Windows 10 update process started to fail repeatedly with an obscure error message about data corruption. I tried various purported remedies that I found with internet searches but none of them fixed the problem. I had basically given up and was resigned to living with an increasingly obsolete operating system (like with my still older Dell Inspiron desktop running Windows Vista).  However to my surprise on or about December 30, 2020 the update succeeded so the machine is now running the newest (20H2) version of Windows 10.

Upgrading to a new version of Windows 10 apparently wipes out the update history so I am unsure exactly when the problem started or how many failed attempts there were (it seemed like dozens at least). This wikipedia article has a table showing the Windows 10 version history. Based on this my best guess is that my machine was previously running Version 1803 of Windows 10 which was released April 30, 2018. The next version 1809 was released November 13, 2018 but apparently didn't get installed on my machine. The end of support for 1803 was November 12, 2019 leading to nagging messages from the Windows's updater about moving to a supported version of the operating system. However as noted above repeated attempts to do so always failed with an obscure error message. Whatever the problem was persisted through versions 1809, 1903, 1909 and 2004 as they became available. But it seems to have gone away with version 20H2 which first became available October 20, 2020.  New versions aren't installed immediately on all machines (my other laptop is still on 2004) but apparently installation was attempted on December 30 and succeeded.

So far (with limited use) I haven't encountered any problems with 20H2 so hopefully there was no actual data corruption issue and Microsoft just had some bug in their update process that went away when 20H2 was released. This problem wasn't the biggest deal in the world as I could still use the machine (which was gradually becoming functionally obsolete anyway) but it is still a rather sobering example of how hard it can be for the average person to effectively deal with this sort of obscure computer issue.  

Blog List Update

 Kevin Drum has left Mother Jones and is now blogging at his own site so I have updated my blog list link appropriately. I could never get the previous link to work correctly, it would go to the top Mother Jones page rather than Drum's blog specifically. Fortunately this is not an issue at his new site. The link to Steve Sailer's blog had the same problem, going to a general Unz Review page. I tried again to fix this with partial success, now the link to Sailer's most recent post works correctly but not the link to the entire blog. 

I also added the lefty "Lawyers, Guns & Money" blog to my list. I wouldn't say the analysis is generally very impressive but it does provide a view into what a segment of the left is currently thinking about politics. Also they have several active posters so they do generate a lot of content.