Baltimore Harbor
As one of the poorest performing portfolios, based on Internal Rate of Return (IRR) data, we need to rely on trends to see if the Pauling is improving since the switch was made to the Sector BPI investing model. Keep in mind the Pauling has only been using the Sector BPI model for one month so it is much too early to draw any conclusions.
Pauling Investment Quiver and Holdings
Below is the investment quiver and holdings for the Pauling. Note the changes. I’ve added eleven equal-weight ETFs to the eleven cap-weighted ETFs as I am going to be using a combination based on five-year performance data.
This is how it will work. When a sector shows up as a Buy based on BPI data, I will compare the performance between a cap-weighted ETF and an equal-weighted ETF. The better performing ETFs are shown when I post the BPI data each weekend.
Pauling Security Recommendations
Using the BHS investing model and the 60- and 100- trading days look-back combination, no ETFs are recommended for purchase. None of the sectors are oversold so there are no Buy recommendations from that source. Therefore, no action or transactions are planned in this update.
Pauling Manual Risk Adjustments
We will continue to hold $2,200 cash and wait for the next event. I have Trailing Stop Loss Orders (TSLOS) in for Financials (VFH) and Technology (VGT). If you look back to the last BPI blog you will see that RSPF is a better performer than VFH. If this performance comparison holds when the next oversold condition arises, I will purchase shares of RSPF for Financials instead of VFH.
Pauling Performance Data
Over the past 23 months Pauling trails all the possible benchmarks and especially SPY. It will take a long time to make up this difference and that is why I will concentrate on trends using the Risk Ratio data shown below.
Pauling Risk Ratios
There is some improvement as there are disappointments with the Pauling. This fall the Sortino Ratio improved, and the current Jensen is better than it has been for most of 2023. However, the Jensen dipped slightly this month as SPY had a great month. The Information Ratio held steady in November.
The best news is the positive slope of the Jensen Performance Index, frequently known as the Jensen Alpha.
Millikan Sector BPI Update: 20 July 2023
Copernicus Buy & Hold Portfolio Review: 18 May 2023
Above are two past blog posts for different portfolios.
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Lowell,
I ran $BPutil in StockCharts this morning and it showed 70. I put in a TSOL of 3%. Did I miss something?
Bob W.
Bob,
If I understand what you did, you ran a BPI on the Utilities ETF. That is different than the BPI for the Sector itself. Not much different, but I think there is a difference.
When I am determining the Buy and Sell decisions, I am using the entire Sector or the BPI for the Utilities sector. That is different than the actual ETF for the sector. At least that is my understanding.
My Windows machine is off right now. I plan to post the BPI data tomorrow. Utilities may well be overbought as the StockCharts Sector and Sector ETF should come close to throwing off similar data so you likely did not miss anything.
If the Utilities sector is overbought, setting up 3% TSLOs on Monday will be fine. Readers will have that information tomorrow.
Lowell
Lowell,
I used $BPUTIL which I understand to be the sector not the ETF. I have TSOLs on both VGT and VPU currently.
Bob
Bob,
I’ll check this out after the market settles today and all the BPI data is available from StockCharts. It could well be that Utilities moved into the overbought zone. Financials and Technology were the two overbought last week.
Lowell
Bob
You are correct as to the symbols Stock Chart uses. The line below are the 11 sectors that Lowell uses on his summary sheet. What you can do is use copy it and paste it directly into the Candel Glance section in stock charts which then shows all 11 sectors.
I also have stakes in a number of the sectors however I am not inclined to use TSLOs . I will keep a close eye on those in the over 70% level.
Bob Petersen
$BPSTAP,$BPHEAL,$BPENER,$BPMATE,$BPINDY,$BPDISC,$BPINFO,$BPFINA,$BPCOMM,$BPUTIL,$BPREAL
Bob,
Yes, $BPUTIL is the sector, not the ETF.
Lowell