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Fundamentals
Realistic Strategies, Realistic Returns

Cabot Options Institute – Fundamentals Issue: March 13, 2023

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

Current Positions

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

Portfolio Discussion

All-Weather Portfolio

After the recent pullback, the All-Weather portfolio is now up 0.55%, with the Vanguard Total Stock Market ETF (VTI) doing the heavy lifting, up 7.19% since it was introduced to the portfolio back on 6/15/23.

Besides DBC, we’ve rolled all of our positions to the April 21, 2023 expiration cycle. Our DBC 24 calls are due to expire this week. I will most likely allow them to carry through expiration and sell more calls after expiration, unless we have an opportunity to buy back our DBC 24 calls for $0.05 or less.

Yale Endowment Portfolio

Our Yale Endowment portfolio is down 4.81% after being up over 7% just a few weeks ago.

Besides TIP, we’ve rolled all of our positions to the April 21, 2023 expiration cycle. Our TIP 108 calls are due to expire this week. TIP is currently trading above 108, so we might have to buy back our 108 calls and immediately sell more calls. And if we continue to see a decline in the market, we should have several opportunities to buy back some of our current short calls and sell more calls, thereby lowering the cost basis of our current position.

Dogs (and Small Dogs) of the Dow

It’s the tale of two portfolios. Our Small Dogs portfolio is up 4.45%, while our Dogs of the Dow portfolio is down 18.16% since the onset of 2023. CVX, AMGN, IBM and MMM have all had dismal starts to 2023 which is bringing the larger Dogs of the Dow portfolio to its lows of the year. However, the Small Dogs have experienced the polar opposite, hitting close to an 18% gain before pulling back late last week due to the SVB scare that has rattled the market in recent days. We’ve managed to roll all of our positions to either the April 14 or April 21, 2023 expiration cycles so there really isn’t much to do at the moment. That being said, if we see a continuation of the overall market decline this week I will most likely buy back some of our near-term calls and immediately sell more calls.

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 15% while the stock alone is up only 1% 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, March 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.


The next Cabot Options Institute – Fundamentals issue will be published on April 17, 2023.