Author: Bob Freedland
Covestor model: Sustained Momentum
Disclosures: AAPL, AMZN, DIS, JWN, MORN, MSFT, PETM, VIVO, VRX, HOLX, CL
I have enjoyed putting together the ‘Sustained Momentum’ model on Covestor and being responsible for its management. The model had a solid month and has done well for 2012 and since inception. In many ways it is on auto-pilot with some ‘adult supervision’!
The model might better be called the Stock Market Darwinism model as I seek to select stocks for inclusion that are not the ‘dogs’ of my portfolio but what I believe are the ‘top dogs.” In other words out of my own model portfolio of approximately 50 stocks, the top 10 performing stocks that I am watching are included. Most of the trades involve stocks that move out of #10 and the #11 positions moving ahead. (A bit of a horse race eh?)
During the month the changes included dropping Colgate Palmolive (CL) from the portfolio and replacing it with ResMed (RMD). The other positions include Apple (AAPL), Amazon (AMZN), Disney (DIS), , Nordstrom (JWN), Morningstar (MORN), Microsoft (MSFT), PetSmart (PETM), Meridian Bioscience (VIVO), and Valeant Pharmaceutical (VRX).
To help you appreciate the competition these holdings face, the next ten holdings in my ‘watch list’ (that are not part of this portfolio at this time) include Hologic (HOLX), Johnson Controls (JCI), Colgate (CL), McDonald’s (MCD), Google (GOOG), Dolby (DLB), DollarTree (DLTR), IBM (IBM), Church & Dwight (CHD) and Ford (F).
Changes in this portfolio depend on the performance of the stocks themselves. I have found this terribly helpful in preventing me from a panic over a decline or over-enthusiastic feelings after a price spike.
There is a significant amount of cash in this portfolio and I intend to continue to put it to work as each new replacement is added in the future.
Disclosure: performance discussed is net of advisory fees. Also, any investments discussed in this presentation are for illustrative purposes only and there is no assurance that the adviser will make any investments with the same or similar characteristics as any investments presented. The investments are presented for discussion purposes only and are not a reliable indicator of the performance or investment profile of any composite or client account. Further, the reader should not assume that any investments identified were or will be profitable or that any investment recommendations or that investment decisions we make in the future will be profitable.
