Kepler Portfolio Review: 15 June 2023

Sputnik Model

Kepler is the portfolio up for review this morning and major changes are in the making as readers will see in a moment.  I’m reworking the Investment Quiver for both the Kepler and Einstein in hopes of improving the return for the risk taken.  The Internal Rate of Return (IRR) of the Kepler is not adequate and that is the reason for this change.

Kepler Investment Quiver

The Investment Quiver below is much simpler than past Kepler quivers.  With fewer options one of the goals is to reduce trading.  With a focus on equities the hope is to improve the return.

The Kepler holds a large amount of cash and than needs to be invested before the end of the third quarter, if not sooner.  I’m hoping for lower prices sometime this summer.

Kepler Security Recommendations

Using the BHS investing model with a one-year look-back period, a maximum of three assets are recommended at any one time.  The rank order is paramount.  VOO is currently #1 with VTI and ESGV tied for second.  SPY is a Hold? so this is up to the manager as to whether or not to continue to hold on to the 30 shares.  I plan to maintain the SPY position.

Kepler Manual Risk Adjustments

With the Kepler I will fill the recommendations in the order of the rank.  Therefore, 145 shares of VOO are the first to fill.  In the following screenshot I am filling ESGV before VTI, but when the market opens I’ll likely try to balance ESGV and VTI as they are tied for second place.

Kepler Performance Data

Over the past 18 months the Kepler lagged the S&P 500 by a wide margin and that is the primary reason for the Investment Quiver shakeup.

Kepler Risk Ratios

Both the Sortino and Jensen are showing improvement in June and the goal is to see this continue and to witness a major turnaround in the Information Ratio.  The second half of 2023 is going to be a major challenge for the Kepler as it is not easy to dig out of this investment hole.