Traveling Smoker
Kepler is one of the poorest performing portfolios tracked here at ITA. Hence, a major shift in the asset allocation.
In preparation for the anticipated recession (or worse} I am revamping the asset allocation. Simplification is the direction I am moving with the Kepler. For the foreseeable future the portfolio will primarily be populated by short-term treasuries (SHV).
Kepler Security Holdings
Shares of BGH were partially sold and I am in the process of liquidating that position. Limit orders are in place to purchase more shares of VYM and SCHD as well as a limit order for VOO placed 15% below the current price. As you can see, I expect this vastly overbought market is in for a major correction. Be sure to listen to the video at the end of this blog post.
Kepler Performance Data
The Kepler is woefully behind all benchmarks since 12/31/2021. Shares were sold at the bottom of the market in 2022 for educational purposes and the portfolio will be a long time covering.
Kepler Risk Ratios
The critical Jensen Alpha ratio is well behind where it was last November, but it did recover slightly since this past October. One month is not much comfort so keep an eye on the Jensen during 2026.
Due to holding a high percentage in cash and bonds, the beta is currently very low for the Kepler. Low beta and a negative Internal Rate of Return (IRR) results in an extremely low Treynor Ratio. I don’t pay too much attention to the Treynor as it is too dependent on the portfolio beta. Better to focus on the Jensen and Information Ratios.
In case you missed this link on the Forum, I highly recommend ITA readers listen to this YouTube video. Move the slider back to the beginning if the recording does not start at the beginning. This information just adds to the lack of market confidence moving forward. Keep tabs on the Buffett Indicator and Shiller P/R Ratio.
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