Einstein Sector BPI Portfolio Review: 16 February 2024

Arches National Park – Utah.

Risk Drives Return – Charles Ellis

In several cases the owner of a portfolio requires cash be available within a six months period.  The Einstein is one such account so this portfolio will not be fully invested.  Should all eleven sectors ever be oversold, this would require some adjustments in the percentage invested in each sector.  This is unlikely to occur unless there is a recession or worse.

In this review I included a portfolio report so readers can see how the sectors are performing since early October of 2023.  The Einstein has a short life of employing the Sector BPI investing model so that that into account.  We are still in the hypothesis stage of the Sector BPI investing model.

Einstein Investment Quiver and Holdings

Below are the current holdings for the Einstein.  This week Utilities dropped into the oversold zone.  Limit orders are in place to build VPU up to 9.5% of the total portfolio.

Einstein Manual Adjustment Worksheet

In order for the Einstein to maintain $30,000 in cash the plan is to add 60 shares to ESGV and 85 shares to VPU.  VPU needs to hold 105 shares to reach the 9.5% level.

Einstein Performance Data

Over the past 25.5 months the Einstein fell behind the SPY benchmark by 7.2% annualized.  This is a huge gap and one that will be difficult to close, particularly with the cash requirement.

Einstein Risk Ratios

With the addition of February data the slope of the Jensen improved.  However, the Jensen Performance Index hit its low since last February.

Pay attention to the Information Ratio as that is the head to head comparison between the Einstein and the SPY benchmark.  That data is not positive for the Einstein.

Einstein Sector Portfolio Report

I just noticed that VOO is missing from the ETF column.  I’ll pick that up next update.

Many, but not all the individual sectors outperformed the SPY benchmark.  Since the Einstein began using the Sector BPI model, it has held its ground with respect to the S&P 500.

Thus far the Sector BPI model is holding up quite well.  This current year will be a real test, particularly if we see several sectors complete at least one buy/sell cycle.

Comments are always welcome.