Einstein Portfolio Review: 25 July 2023

Working Barn in Eastern Oregon

Einstein is the growth portfolio up for review this morning.  I noticed that the description and yield data is not coming in from either Yahoo or Tiingo so the ITA file is once more not working properly.  Therefore, I’ll skip directly to the security recommendations worksheet and omit the investment quiver worksheet.

Einstein Security Recommendations

With the look-back period set to one year (252 trading days), a maximum of 9 securities recommended at any given time, and the investing model set to LRPC, the recommendation is to fill five equity ETFs in this order.

1. VEA
2. VOO
3. SPY
4. VTI
5. ESGV

Einstein Manual Risk Adjustments

To establish the risk settings I reset the SD Multiplier to 1.14 so the Stop Loss percentage for VTI is 8.0%.  Then I adjusted the Maximum Trade Position Risk to 1.20% so the Maximum Portfolio Risk is 6.0%.  I will go higher in bear markets, but not in this market.

Buying order as follows:

1. Add 390 shares to VEA.
2. VOO is oversubscribed so do nothing.
3. Add 5 shares to SPY.
4. Add 75 shares to VTI.
5. Since VOO is over the limit we are only able to add 100 shares to ESGV.

Einstein Performance Data

Over the past 18 months the Einstein continues to lag the SPY benchmark as well as all other tracked benchmarks.  By using a concentrated investment quiver the hope is to close the gap between the IRR of the Einstein and the SPY benchmark.  This will require a bear market and the LRPC model to respond soon enough to protect capital.  Otherwise it is unlikely the Einstein will match the SPY benchmark in the near future.

Einstein Risk Ratios

Part of the reason for the disappointing IRR performance is related to the large cash holding.  The owner of this portfolio requires cash from time to time so all assets cannot be fully invested in securities.