Carson Portfolio Update: 18 November 2022

Snake River Canyon

Carson is a new portfolio and as such I need to establish a baseline of data.  Thus the reason for this blog post as no transactions are recommended.  Normally I would post nothing concerning the Carson as there are no Buy or Sell recommendations.  When I examined the Bullish Percent Indicator (BPI) data this morning, no sector ETFs were in the Buy zone and the Carson does not hold any sector ETFs in the over-bought zone so no Trailing Stop Loss Orders (TSLOs) are recommended.

Carson Current Holdings

Below is the investment quiver and current holdings (arrows) in the Carson.  Keep in mind that while the investing model is set to BHS, I am not using this model to manage the Carson.  Instead, I am using what I think of as a unique BPI model.  To my knowledge, no other portfolios are managed using this approach so it is quite unique.  Here are the basic instructions.

• When a sector ETF moves to 30% bullish or lower, buy that sector ETF and hold until it moves into the over-bought zone.  Over-bought is defined as the point where 70% or more of the companies within the sector ETF show up bullish when viewed on a Point and Figure (PnF) graph.  Readers do not need to construct these graphs on their own as I’ll post a BPI blog at the end of each week when a move is recommended.
• When a sector ETF moves into the over-bought zone, place a TSLO on that sector ETF.
  • If the over-bought percentage is 90% or higher, use a 1% TSLO.
  • If the over-bought percentage is 80% to 90%, use a 2% TSLO.
  • If the over-bought percentage is 70% to 80%, use a 3% TSLO.
• When a sector ETF is sold and waiting for the next Buy signal, place the cash in SHY, SHV, or SCHP.  We want to preserve cash by moving to a low volatile treasury security.  SCHP is a TIP so that is a good place to be in this inflation environment.
• Any slight variations to the above basic management rules will be explained in due time or when we encounter the next Buy or Sell signal.

Carson Performance Data

A week or so ago I moved money from Carson HA and Carson BHS over to Carson LRPC.  I then converted the Carson LRPC name to Carson and am carrying on the data from the old Carson LRPC over to the new Carson.

Since 11/30/2020 the IRR for this portfolio is 14.1% while the AOA benchmark is a mere 1.2%.  It is highly unlikely this delta difference can be sustained.

Carson Risk Ratios

The Jensen is a very high 13.3 and not expected to remain at this level unless this new investing model pans out much better than one might expect.  The Information Ratio is also a very healthy 3.1.  Any Information Ratio above zero is considered to be excellent.

The slope of the Carson is essentially zero over the last year.  The slope of the Jensen Performance Index is something to watch.  If the slope begins to grow more positive, the model is working as expected.  If it moves down or goes negative, then the model is not working as anticipated.   Watch this space.

Questions and Comments are always welcome.  Place them in the Comment section provided with each blog post.

New Carson Launched: 4 November 2022

Carson Portfolio: Creating A New Investing Model

Carson Portfolio Checkup: 12 November 2022