Current Positions
Click here to access the “Portfolios” section to view each portfolio’s respective positions.
Portfolio Discussion
All-Weather Portfolio
The market continues to rally and the All-Weather portfolio is now up 10.2%, with the Vanguard Total Stock Market ETF (VTI) and SPDR GLD Shares ETF (GLD) doing the heavy lifting, up 26.0% and 8.6%, respectively.
Nothing has changed from last month, both bond funds (TLT and IEF) and the commodity fund (DBC) continue to lag behind, but that is the yin-yang protective nature of the All-Weather portfolio just doing its job.
We have rolled all of our positions into the August expiration cycle. So, at the moment, there are no necessary trades during this week of expiration.
Yale Endowment Portfolio
Our Yale Endowment portfolio is up 14.4% after being down more than 4% just four expiration cycles ago. We’ve managed to tack on more than 6% in returns over the last expiration cycle thanks to the ongoing rally in the overall market.
The S&P 500 (SPY) up 21.6%, emerging markets (EEM) up 11%, and the European Union (EFA) up 18.7% have led the way for the Yale Endowment Fund while bonds (TIP) and real estate (VNQ) have lagged.
As we head towards the July 21 expiration cycle, all five of our positions have been rolled into August and September expiration cycles. As a result, there is no need to make any trades prior to the end of the July expiration cycle this week.
Dogs (and Small Dogs) of the Dow
Our Dogs approach has been the tale of two portfolios almost since the beginning of 2023. Our Small Dogs portfolio is up a healthy 9.6%, while our Dogs of the Dow portfolio is down 12.1% since the onset of 2023. If the market continues to rally we should see significant gains going forward.
Three out of five Small Dogs are in positive territory with Intel (INTC) leading the way, up 43.6% on the year while the stock is only up 19.8%. Cisco Systems (CSCO) is not far behind with a return of 24% while the stock has only made 5.2%. Verizon (VZ) has been the loser so far this year, down 26.4%.
As for the remaining higher-priced stocks that make up the rest of the Dogs of the Dow (including the Small Dogs), the hands-down winner is JPMorgan (JPM). Our position is up 34.7%, while the stock is only up 9%. Unfortunately, JPM is the only winner of the remaining holdings in the portfolio.
We have two call positions (AMGN, IBM) that are due to expire this week. As a result, expect to see quite a few alerts come through early in the week as we roll our positions and sell more premium going out 30 to 60 days. We also need to sell a calls in CSCO as our calls expired worthless last week, reaping the entire return.
Warren Buffett’s Patient Investor Portfolio
At the moment, we only have two positions (AAPL, TTE) but intend to add several more in the next week or two, if the market cooperates … a statement we’ve been making for quite some time now.
Two weeks ago we added our second position in TotalEnergies (TTE); so far, so good as the underlying position is up 17.3%.
The market is beginning to accommodate our cautiously optimistic stance. I’ve allowed the passive portfolios to do a lot of the hard work, as always, but sentiment has changed recently, with the market reacting favorably to recent economic news. Our AAPL position is up close to 11% after being down close to 25% just a few months ago.
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 expiration cycles, and remember, because this is an active portfolio we will be rebalancing every month around expiration. Rebalance occurs around each expiration, with the most recent around the July 21 expiration cycle.
James O’Shaughnessy’s Growth/Value Portfolio
Nothing has changed here either. Like the Patient Investor portfolio, my Growth/Value portfolio continues to take a cautious approach. We locked in gains in CVX (14.4%) several months ago and now my hope is to add at least two to three positions over the next few expiration cycles. Of course, we’ve been planning this approach for months, but our indicators have kept us on the sidelines and for good reason.
Two weeks ago we added our second position in Alphabet (GOOGL). Since adding the position, we are up 15.3%, while the underlying stock is down 0.74%. Expect to see several new positions over the next few expiration cycles.
And like our Patient Investor portfolio, I will rebalance 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, July 18, 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 August 14, 2023.
