Terrific 20 Analysis
Just a few hours until the Solar Eclipse of 2017 takes place, so I thought I would walk readers through a sample portfolio known as the Terrific 20. This is not a real portfolio in that no money is backing this portfolio.
Terrific 20 Tranche Momentum Recommendations: The first ten ETFs below SHY are the “Rutherford Ten.” Those ten securities form the core of all ITA portfolios managed using the Tranche Momentum Model (TMM). The bottom ten securities include two individual stocks (BRK-B and WY). WY is in the group to provide exposure to timber. In the future, I may cull out any bond ETFs such as AGG and LQD as I don’t think bonds is where we want to be considering the very low interest rates. When interest rates begin to rise, these bond ETFs will be hurt.
Pay attention to the two sell rules described in prior blogs. For example, a new revelation is that VTI would be sold out of the Terrific 20. I checked some of the other ITA portfolios and VTI does not always fall into the sell zone based on how it is performing vs. SHY. It all depends on the makeup of the portfolio or what ETFs are included. In this example, I would sell VTI as it is under-performing SHY. VNQ, DBC, WY, and SH would also be on the sidelines.
As for securities to buy, only BRK-B passes all the screens.
- Berkshire Hathaway is performing above SHY.
- BRK-B has a Group rating of 3 where one (1) is tops, but rather rare. Note that MTUM is a one.
- BRK-B shows both Heikin-Ashi (H-A) candles to be positive.
- Check the PnF Ratio for BRK-B as the final screen. I’ve shown this graph in prior blog posts.
MTUM would be a buy but for the negative candles. Also, MTUM is currently priced below its 13-Day EMA. These two signals indicate MTUM is weakening so I would delay new purchases.
TLT is making a bid for purchase. If already in the portfolio, hold it. I would not add new shares until the Group rating hits a 1, 2, or 3.
Note that the Periods between Offsets is set to 2. This provides a look back over 24 trading days.
Tranche Momentum Recommendation Table