McClintock Sector BPI Portfolio Review: 30 October 2024

Along Route 395

Before moving into the review of the McClintock I want to comment on a few of the portfolios tracked here at ITA.

• While the Schrodinger (computer managed portfolio) is outperforming the S&P 500 as well as the SPY ETF, it is not designed to do this well.  Any portfolio that holds bonds or treasuries as risk reducers is not designed to outperform the S&P 500.
• The Copernicus is designed to outperform the S&P 500 index.  Two factors are critical.
  • The portfolio holds ETFs that closely mirror the performance of the index.
  • Dollar-cost-averaging assures out-performance so long as the market moves up in value.
  • Should the market decline there is a very high probability the portfolio will under-perform the S&P 500 index.
• The Asset Allocation portfolios are built around a principle that has a very long history of solid performance.
• As for the Sector BPI portfolios, we have insufficient data to draw useful conclusions.

This morning I will review the McClintock, a Sector BPI portfolio and a little later will update the Huygens, one of the Asset Allocation portfolios.

McClintock Securities Holdings

Some weeks ago Energy dropped into the oversold zone.  Shares of VDE were purchased when that occurred.  We have been holding this security ever since.  Additional cash was used to purchase shares of VTI and VOO.  We still have available cash and I have limit orders in place to pickup more shares of each ETF.  The limit orders are a fair distance below current prices as the coming election is a wild card.

McClintock Performance Data

Since 12/31/2021 the McClintock lags the SPY ETF, but the portfolio is outperforming the actual index by more than one percentage point.

As stated frequently, it is most difficult to outperform the S&P 500 index when actively managing a portfolio.

McClintock Risk Ratios

While the slope of the Jensen is positive, the Jensen Alpha ratio dropped between September and October.  Too high a percentage of the portfolio is in cash.  Once the election is over and we have a better idea whether or not the “Great Experiment” survives I will have a better idea what to do with the 28% currently in cash.

Tweaking Sector BPI Plus Investing Model: Part II