Carson Sector BPI Portfolio Review: 29 August 2023

For the love of old barns.

Stocks are off to a smart start today and this is where the “Plus” part of the Sector BPI Plus investing model patch is working its will.  If you recall, the original Sector BPI portfolio would have us lounging in cash under these market conditions as there have not been any sector buy signals for several weeks.  Instead of resting in cash, if the Kipling spreadsheet recommends purchasing U.S. Equities, we follow those recommendations.  That is currently the situation as readers will see in a moment.

Carson Investment Quiver and Holdings

Below is the current investment quiver and holdings for the Carson.  What are the recommendations for the $20,000 held in cash?  Follow the analysis below.

Carson Security Recommendations

Using the LRPC investing model and the “default” look-back combination, the recommendation is to Buy VTI, SPY, VOO, and ESGV.  Since the Carson already holds shares in each of these ETFs, we need to see if we need to add more shares based on the risk we want to take with the Carson.

Carson Manual Risk Adjustments

The following worksheet is where we make the Buy-Hold-Sell decisions.  The SD Multiplier is adjusted so the Stop Loss for VTI is limited to 8.0%.  That is the first risk adjustment.  In a worksheet prior to the one you see below, I adjusted the Maximum Trade Position Risk so the Maximum Portfolio Risk is limited to 6.0%.  Based on current holdings that translates to 3.0% in the following worksheet or a very conservative position.

The plan is to set a 3% TSLO under VEA and to add more shares of BIL.  This will still leave nearly $12,000 in cash.  There is a chance one of the sectors will drop into the oversold zone and we need available cash to purchase those ETFs if and when this occurs.

VOO is oversubscribed, but that is fine as VOO is recommended for purchase.

Carson Performance Data

As for performance over the past 19 months, the Carson continues to top the S&P 500 by a comfortable margin or 12 percentage points.  If we enjoy a strong bull market at the end of the year, this delta value will shrink.

Carson Risk Ratios

At 8.69 the Jensen is still quite high, but well off the values witnessed back in the winter of 2022.  I expect the slope of the Jensen to move back into positive territory by January of 2024.

Key risk measurements (Sortino and Information) are well above their August of 2022 values.  Only the Jensen Alpha is lower and that is to be expected as it is unlikely the Jensen will maintain values much above two (2) or three (3).

Tweaking Sector BPI Plus Model: 20 May 2023