Ruins near Ephesus.
Franklin is one of the newer Sector BPI portfolios having moved from the Dual Momentum™ model over to the Sector BPI model as I was not pleased with the DM performance.
Franklin Sector Investment Quiver
With Technology (VGT) in the over-bought zone, 14 shares of the tech sector were sold out of the Franklin yesterday as the 3% TSLO was struck. I looked back at the several buy orders and in each case the sell price generated a handsome profit. At least in this case the Sector BPI Model worked as anticipated.
Only one sector, Communications, currently holds shares in the Franklin. Several limit orders were placed to purchase more shares of SCHP.
Watch Utilities as that sector is approaching the Sell zone.
Franklin Performance Data
Over the past 13 months the Franklin holds a slight lead over the AOA benchmark. Also noteworthy is the significant lead over SPY.
Franklin Risk Ratios
For the first time over the past year the Franklin is outperforming the AOA benchmark. Check the Information Ratio.
The Jensen Performance Index took a slight dip despite the lower interest rate for a risk-free treasury (SHV). I’m somewhat surprised with such a high negative value for Treynor considering the high percentage of the portfolio holding low volatile assets.
When the January 2022 data clears the data table, we should see a change in the slope of the Jensen. Stay tuned when the Franklin is reviewed in early February.
Buying Guidelines For BPI Model Portfolios: 9 December 2022
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Lowell,
I’ve been experimenting with the BPI since late June. I have not been systematic in terms of amounts as I’ve distributed the purchases over about 3 different portfolios. My profit up through 1/25/23 is 7.45%. I’ve had 2 opportunities where I followed your guidance on adding shares as the price continued down after the initial purchase. One produced a 1.6% profit and the other a -0.6% loss. It’s only 2 cases so difficult to decide what the “message” is. 45% of the total profit was realized on 2 trades both purchased in June and sold in August VCR and VIS. These two positions were larger amounts than most of my purchases so that is probably why they dominate. These were both ~$10k whereas most of the other purchases were in $3k range. Over the 7 months I’ve had positions in all sectors but am now down to only VPU. The % profit includes dividends which were about 3.5% of the total profit. That’s my experience so far. I’m having some problems with IRR in IAM so I’m just reporting raw %, I’ll try to get it figured out.
Bob Warasila
Bob,
Thank you for the data. Keep us informed and I will do the same. I hope I am not over excited regarding the Sector BPI Model.
Lowell
Lowell,
As you always remind us, it will take 2 years to get a good fix on how it works, but I have made money over the last 7 months applying the method. I’m now going to be more systematic regarding amounts invested.
Bob
Bob,
I’m also rethinking my TSLO settings for any portfolios housed at Schwab. Schwab permits one to set TSLOs to the nearest tenth rather than the nearest percent as is the case with TD Ameritrade.
Example of my thinking. Assume a sector first moves into the over-bought zone with a 73% bullish percent indicator. Instead of setting the TSLO at 3%, set it at 2.7%. If the BPI comes in at 78%, set the TSLO at 2.2%. In other words, when the BPI percentage is higher, tighten the TSLOs accordingly. I’ve yet to apply this technique, but plan to do so in the future.
Once the TSLO is set I don’t plan to do anything or make any further fine adjustments.
Lowell