Painting of Joshua Tree National Park
Normally I do not review individual portfolios on the weekend as markets are closed and if there are any manual risk adjustments advised they cannot be enacted until the market opens next week. There are two reasons why the Kepler is reviewed this morning.
- The last review occurred early in February and I wanted to update the information before March arrives.
- I recently install a new plugin that includes the option to create material based on Artificial Intelligence (AI). I’m interested in experimenting with the AI prompts and output. Below is an example for the Kepler.
The AI output shows up below in a purple font. It comes across as pompous and needs to be toned down. Just my opinion.
Kepler Portfolio Review: 23 February 2024
Subject: Unlocking Potential with Jensen Alpha and Sector BPI
Dear Investor,
We are thrilled to present the Kepler Portfolio Review for the month of February 2024. Our comprehensive analysis and strategic insights aim to provide you with a clear understanding of the tremendous opportunities that lie ahead.
At ITA Wealth Management, we believe in delivering exceptional results through our diligent approach. Our seasoned team of experts has meticulously developed investment strategies that focus on maximizing returns while minimizing risks. By employing advanced methodologies such as the Jensen Alpha and Sector BPI, we consistently outperform market benchmarks.
And now to merge into an update of the Kepler Sector BPI portfolio.
Kepler Security Holdings
Two major moves occurred since the last review. Shares of VOO were sold when the ETF struck the TSLO price. This move cost the portfolio money as VOO moved up since the sale. Such are the pitfalls of employing Trailing Stop Loss Orders. The move was not catastrophic as one can see in the final table as VOO closely matches the SPY benchmark.
The second move has, thus far, been beneficial to Kepler and that is the addition of VPU when Utilities dipped into the oversold zone last week.
Kepler Manual Risk Adjustments
The following manual risk adjustment worksheet is part of the Kipling spreadsheet. The recommendation is to buy back 35 shares of VOO and expand holdings in VEA and open up a position in VWO.
Kepler Performance Data
The Kepler continues to lag the SPY benchmark by a significant percentage. The only possible benchmark Kepler challenges is AOR. Next week I plan to build VOO back up. With an expense ratio of one basis point it makes little sense to remain out of VOO.
Kepler Risk Ratios
The best news one can claim from the following data is that the Jensen Alpha curve is positive (0.52).
Based on the Information Ratio the Kepler has yet to outperform SPY over the past year.
Kepler Sector Portfolio Report
Without making excessive excuses, the Kepler has only been using the Sector BPI model since sometime in October of 2023 so we have little historical data. The Kepler needs to rotate through several Buy/Sell cycles before we draw any significant conclusions.
Over the short period the Kepler worked with this model the IRR for the Period is 20.8% while the SPY benchmark returned 18.8%. This is close to a tie. I also include the S&P 500 data where the return closely matches the SPY – as expected.
Questions and comments are always welcome.
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Millikan Sector BPI Update: 20 July 2023
Tweaking Sector BPI Plus Investing Model: Part II
Copernicus Portfolio Review: 29 December 2023
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Lowell,
I’m surprised that a TSLO was struck for VOO. What was your TSLO setting?
~jim
Jim,
I don’t recall the setting. It was likely “tighter” than normal as the owner needs cash in the near future.
The two portfolios that I think will not be “raided” for cash needs are: Copernicus and Schrodinger.
Lowell