Before updating the Carson I checked to see if any new Bullish Percent Indicator (BPI) revelations emerged since the last update. No changes showed as Discretionary, Staples and Health remain in the oversold zone. As the oldest Sector BPI Plus portfolio it always interesting to see how well the Carson is performing when compared to the S&P 500. Follow along with this review to see how the available cash is used.
Carson Security Recommendations
From the last BPI data published this past weekend, Discretionary (VCR), Staples (VDC) and Health (VHT) are the three sectors occupying the oversold zone. This assumes one is using Vanguard ETFs. Based on three-year volatility we determine what percentage to hold in each sector ETF and for these three the percentages are:
- VCR = 10.5%
- VDC = 5.7%
- VHT = 6.2%
Excess cash is applied to equity ETFs. When using the LRPC investing model I rely on the Rank shown in the fourth (4th) column from the left. Excess cash goes to VTI (#6), VOO (#7), and SPY (#8) in that order. By this time available cash is down to zero. Note that VTI, VOO, and SPY are all a Buy at this time.
When I began this blog I had two limit orders set for VCR. The limit order for 10 shares at $268 was struck while working on this post. A second limit order for another 10 shares is waiting for the price to drop to $260.
Carson Performance Data
As we approach 21 months of data the Carson is outperforming SPY by a wide margin. The delta is even larger for the other potential benchmarks. The Sector BPI Plus model appears to be working as hypothesized several months ago.
Carson Risk Ratios
Perhaps more important than the relative IRR comparisons is how well the Carson is performing when analyzed through the lens of the Jensen Performance Index or frequently called the Jensen Alpha. While 9.4 is not the high point over the past 13 months, it is still a very high value. While September looks to be a rather poor month for equities, the Carson may improve on the August Jensen figure.
Below are three other examples of the Sector BPI Plus investing model.