Kepler Portfolio Review: 12 June 2023

Old Working Ford Truck

Kepler is one of the few portfolios scheduled for review this week.  When a portfolio ranks at the bottom of the list when it comes to the return/risk ratio, it is time to make a change.  Readers will see the investment quiver shrink to a few basic ETFs, not too dissimilar from the investment quiver of the Copernicus.  In the future, the Kepler will tilt toward the passive management model.  This is why I will be using the one-year look-back period.

Kepler Investment Quiver

While the security options are a little broader than what is available with the Copernicus, the goal is to stay full invested, which is currently not the situation.  In addition to remaining fully invested a secondary goal is to reduce portfolio churning.  Stick with the investments if at all possible.

Kepler Security Recommendations

Using the BHS investing model and a look-back period of one-year or 252 trading days, the maximum number of securities to hold at any one time is three (3).  If there is a recommendation of Hold? (up to the discretion of the manager) I’ll most likely continue to hold the security, particularly if it is an equity holding.  Such is the case with VTI.

Kepler Manual Risk Adjustments

When the market opens this morning here is the plan.

• Sell 200 shares of SHV to raise more cash to purchase equities such as SPY, VOO, and ESGV.
• Sell 600 shares of SCHP for the same reason.
• Set a variety of limit orders to purchase 135 shares of SPY.
• Set a variety of limit orders to purchase 145 shares of VOO.
• Set a variety of limit orders to purchase 650 shares of ESGV.
• Continue to hold on to the 30 shares of VTI.

Kepler Performance Data

Over the past 17.5 months the Kepler has fallen far behind the SPY benchmark as well as all the other potential references.  This data is sparking the change.

Kepler Risk Ratios

Of major concern is the -13.4 Jensen Alpha value and the huge negative slope (-2.8).  We can do better than this.  Thus the changes that are coming this week.

I think I’ve been neglecting this portfolio as well as the Einstein so more attention will be paid to these two portfolio over the next six months.