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Realistic Strategies, Realistic Returns

Cabot Options Institute – Fundamentals Issue: February 13, 2023

Click here to register for the subscriber-exclusive event tomorrow, Tuesday, February 14 at noon Eastern Time (ET).

Thanks to the bulls, we are seeing a nice pop in all of our portfolios.

While our passive portfolios continue to perform well, our Dogs of the Dow portfolio, particularly the Small Dogs portfolio, has shined, up 12.51% in just over a month’s worth of performance. In fact, all but one of the stocks that reside in the Small Dogs are seeing positive performances with CSCO being the laggard, down -2%.

We are starting to see a bit of a pick-up in the market which could result in finally adding some new positions to the Buffett and O’Shaughnessy portfolios. My hope is to add a few positions to each portfolio over the coming weeks.

Lastly, I will be buying back our 2024 LEAPS over the next expiration cycle and immediately buying more LEAPS in 2025. This will occur in our All-Weather Portfolio and Yale Endowment Portfolio.

As always, if you have any questions, please do not hesitate to email me at

Current Positions

Click here to access the “Portfolios” section to view each portfolio’s respective positions.

Portfolio Discussion

All-Weather Portfolio

The All-Weather portfolio is now up 5.60%, with the Vanguard Total Stock Market ETF (VTI) doing the heavy lifting, up 25.54% since it was introduced to the portfolio back on 6/15/23.

Nothing has changed, and I continue to be incredibly pleased with the performance of the portfolio. The portfolio, at least so far, continues to outperform its benchmark index on the upside and downside and if all goes well, should make big strides over the next few expiration cycles. Just last week, the portfolio was up roughly 9% and as high as 12% a few weeks ago.

We’ve managed to roll all of our February positions into March, with the exception of DBC. I intend on rolling DBC early this week.

Yale Endowment Portfolio

Our Yale Endowment portfolio is up 5.91% and was up as high as 12% just over a week ago.

Like our other passive portfolio, I am pleased with the performance of our Yale Endowment portfolio. Both the All-Weather and Yale Endowment portfolios have proven to outperform their respective benchmarks on both the upside and downside. And remember, this is during one of the most volatile periods we’ve seen in the market.

We have several trades to place this week in the portfolio. At minimum I will be rolling EFA, TIP, and EEM. I expect to make all of these trades over the next few days.

Dogs (and Small Dogs) of the Dow

We finally kicked off our Dogs (and Small Dogs) Portfolio last expiration cycle and so far, so good. While the Dogs of the Dow are down -7.48% so far, the Small Dogs are up 12.51%. MMM and AMGN are the two culprits for the lacking performance of the Dogs of the Dow, while Dow Inc. (DOW) has led the charge for the Small Dogs, up a staggering 28.25% since 1/5/2023.

Warren Buffett’s Patient Investor Portfolio

Nothing has changed here. I’ve decided to keep our positions to a minimum due to the ongoing volatility in the market, but hopefully that could be changing soon. At the moment, we only have one position (AAPL) but intend to add several more in the coming weeks.

As I have stated in our last few issues, I will be building out the portfolio to a minimum of five positions over the coming two expiration cycles, and remember, because this is an active portfolio, we will be rebalancing every month around expiration.

James O’Shaughnessy’s Growth/Value Portfolio

Like the Patient Investor portfolio, my Sentiment portfolio continues to be cautious. We added CVX to the portfolio back in mid-August and it remains the lone stock in the portfolio. Our position is up over 25% while the stock alone is up only 8% over the same time.

And like our Patient Investor portfolio, I will be rebalancing every month around expiration. This simply means that we could have a position for just one expiration or, at least in theory, in perpetuity.

Next Live Analyst Briefing with Q&A

Our next Live Analyst Briefing with Q&A is scheduled for tomorrow, February 14, 2023, at 12 p.m. ET, where we will be discussing the options market, giving a detailed look at open positions, strategies used, and will have a follow-up with live questions and answers. Register here.

Your next issue of Cabot Options Institute Fundamentals will be published on Monday, March 13, 2023.

The next Cabot Options Institute – Fundamentals issue will be published on March 13, 2023.

Andy Crowder is a professional options trader, researcher and Senior Analyst at Cabot. Formerly with Oppenheimer & Co. in New York, Andy has leveraged his investment experience to develop his statistically based options trading strategy which applies probability theory to option valuations in order to execute risk-controlled trades. This proprietary strategy has been refined through two decades of research and real-world experience and has been featured in the Wall Street Journal, Seeking Alpha, and numerous other financial publications. Andy has helped thousands of option traders learn and implement his meticulous rules-driven options trading strategies through highly attended conferences, one-on-one coaching, webinars, and his work as a financial columnist. He currently resides in Bolton Valley, Vermont and when he’s not trading, teaching and writing about options, he enjoys spending time with his wife and two daughters, backcountry skiing, biking, running and enjoying all things outdoors.