Millikan Sector Portfolio Review: 5 January 2023

Roadside entertainment for photographers.

Millikan is the portfolio up for review this morning.  As weeks and months pass more and more historical data is added to mounting evidence as to the viability of the Sector BPI investing model.  This review adds another piece to the puzzle.

Do to a weak market as we begin 2024, several sector ETFs were sold out of the Millikan.  This is occurring within other portfolios as well.  Sale of sector ETFs raises the cash level creating or requiring decisions as to what to do with this cash.  Decisions such as this make back-testing of the Sector BPI model impossible.

Millikan Investment Quiver and Holdings

Fewer sector ETF are currently held in the Millikan due to recent sales.  When this happens we shift investments over to ESGV, VTI, and VOO.  Shares in these U.S. Equities were purchased this morning before I began writing this blog.

Limit order set well below current prices could use up all $15,000 of the available cash.

Look for an updated BPI blog tomorrow.

Millikan Manual Risk Adjustments

Addition limit orders are in place to add shares to ESGV and VTI.  VOO is currently oversubscribed as the Millikan holds 43 shares when only 9 are recommended.  No action on the Buy side for sector ETFs as no sector is in the oversold zone.

Millikan Performance Data

Over the past two plus years the Millikan outperformed the SPY benchmark.  The goal for 2024 is to keep this going.  The Sector BPI model works best in a volatile market that has long up and down movement.  We have yet to test it an essentially flat market.  2024 could be that year.  I’ve noticed that the 3-year annualized volatility had decreased over the last few years.  Low volatility is not what the Sector BPI model is designed for.  The broad market is settling down to something close to 15% annualized whereas it had been up over 20% not long ago.

Millikan Risk Ratios

While it is still early in January I see where the Jensen is in decline while the Information Ratio improved slightly from December to January.  The risk factor is pulling down the Jensen while the Information Ratio measures directly how the portfolio is performing with respect to the benchmark.

The slope of the Jensen (0.75) is in excellent shape.

Millikan Sector BPI Update: 20 July 2023