Carson Portfolio Update: 5 December 2022

Bugatti

New readers need a bit of education regarding the Carson portfolio as it is now operating under a new management model.  For several years I ran a test on three different models available within the Kipling spreadsheet.  These go by BHS, HA, and LRPC.  Over the period of the test, the LRPC turned out to be the best performer.  Both BHS and HA were disappointing.

Last month (November 2022) I merged the three different Carson portfolios into one portfolio that now goes by the single name, Carson.  The new Carson is now managed by a unique model I’ll call the BPI Model as I use Bullish Percent Indicator data from eleven (11) sectors of the market.  Details of how to implement this model are explained if you look up the most recent Carson posts.  A few links are provided at the bottom of this blog post.  I’ll go through the management model each time either the Carson or Franklin is reviewed.  If you have any questions, post them in the Comment section provided below.

Carson Investment Quiver

Here is how the new Carson is managed.  I examine the current holdings, of which four are currently holding shares of sectors.  They are:  VDC, VOX, VPU, and VNQ.  Now I go back to the most recent Bullish Percent Indicator (BPI) sector data table to see if any of these four sector ETFs are over-bought.  Over-bought is when the BPI percentage is equal to or exceeds 70% bullish.  I also examine each sector to see if any are over-sold.  Over-sold is when the BPI percentage of any of the sector ETFs dip to 30% bullish or below.  At the end of last week no sectors were over-sold so no sector ETFs will be purchased for the Carson.

VDC and VNQ are over-bought so I have 3% TSLOs set for both.  Had shares of VCR been part of the Carson I would have set a 2% TSLO as VCR is over 80% bullish.

VOX and VPU are neither over-bought or over-sold so I let both those ETFs ride.

The remaining question is what to do with the $20,000 in cash.  With that money I will purchase shares of SCHP as this inflation protection ETF is generating a dividend of 7.0%.  That is it.  A very simple investing model that is unique in that I don’t know of anyone else implementing such an approach to portfolio management.

Carson Performance Data

Since 11/30/2020 the Carson LRPC model performed quite well.  I’m picking up the LRPC Carson data for the Carson and moving forward.  It will take several over-bought and over-sold cycles before we have any clues if the BPI model works as well as the hypothesis suggests.

While the Carson begins with positive results, an even better test will be the Franklin as it has been one of the poorest ITA performers.  It will be most interesting to see if the Franklin IRR improves as we progress through 2023.

Carson Risk Ratios

Below is are the five measurements used to track portfolio risk.  Pay little attention to the December data on the right as we are too early into the month for this information to be useful.  Over the next year, pay attention to the Jensen Performance Index as it is the most important value in this risk table.

Anytime we hold a high percentage in cash, the Treynor will spike upward.

New Carson Launched: 4 November 2022

Carson Portfolio: Creating A New Investing Model