Gauss Portfolio Update: 6 January 2023

Dead Horse Overlook – Utah

Gauss, a former Relative Momentum portfolio, is the Sector BPI Model account up for review or update this morning.  When I update a Sector BPI portfolio I collect the most recent Bullish Percent Indicator data possible.  That was very important this morning as Energy (VDE) moved above the 30% threshold or what is the over-sold percentage line.  That leaves one over-sold sector.  Follow the investing rules for the Sector BPI Model as I walk ITA readers through the analysis.

Gauss Investment Quiver

Below is the current investment quiver and holdings for the Gauss portfolio.  There are five (5) hangover ETFs from the Relative Momentum days.  Those are the ETFs ranging from IQLT down to VOE.  I have Trailing Stop Loss Orders (TSLOs) set for each of these five ETF.  Expect to see them vanish over the next few months, if not sooner.

Gauss Percentage Adjustments

Unfortunately, I did not fill Energy (VDE) to the maximum 25% level before the sector moved out of the over-sold zone.  The single over-sold sector is Technology (VGT).  I need 10 more shares to bring it to nearly 25%.  A limit order is in place to purchase the 10 shares.

Note that the Gauss does not actually hold $64,000 in cash.  That cash level will be the case once all non-sector equities are sold out of the portfolio.  If I had access to this cash I would be buying more shares of SCHP once VGT is filled.

Gauss Performance Data

Over the past year the Gauss has outperformed both AOA and the S&P 500 (SPY).  As we move into 2023 and look at the performance month to month, it is important to see if the Gauss can maintain the slight lead over both AOA and SPY.

Gauss Risk Ratios

Most of the following data comes from the days when the Gauss was managed using the Relative Strength or Relative Momentum style.  For that reason and the fact that we are still very early in January, the follow data is not all that useful.  Each month that passes will bring added value to the risk measurements such as Jensen’s Alpha.

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