In anticipation of questions that may arise in understanding the Buy-Hold-Sell recommendations from the new Kipling spreadsheet, below is an example that will serve to answer a few questions. This happens to be the Bethe portfolio, but that is not important for this lesson.
Interpreting BHS Recommendations: The Maximum Number of Assets is set to six (6). Four ETFs rate a Score of 10 and they are all a Buy. This is rather straight forward. Now look for the ETF with a Rank of five. I’m referring to the Rank column that is fifth from the right. The ETF is AGG and it is a Sell.
- If AGG were part of the portfolio, the Position recommendation would be a Hold. However, no AGG shares are in the portfolio so the recommendations is to not buy any shares. AGG does not meet the Buy Floor value of 9.
- Now move to the ETF with a Rank of 6. Again, I am referring to the Rank column on the right side of the table. The ETF with a Rank of 6 is RYU. The reason RYU is a Hold is that it is currently part of the portfolio. The Score is only 7 so it falls short of the Buy Floor of 9, but it is recommended to stay in the portfolio since the Hold Floor score is 5 or above.
- Now here is an important point. Had I set the Maximum Number of Assets (MNA) to 5, RYU would show up as a Sell. When the new SS becomes available, users may want to increase the MNA from five or six up to a much higher number to see if any current portfolio holdings show up as a Hold recommendation.
There will likely be other questions, but overall, the spreadsheet is quite easy to use and understand despite all the sophisticated calculations going on beneath the surface.