Einstein Portfolio Update – 30 May 2011

The Einstein is due for an update even though the stock market is closed for Memorial Day – known as Decoration Day when I was a kid.  It was the day for decorating graves.

As usual, we look at the asset allocation worksheet called the Dashboard.  This worksheet is extracted from the TLH spreadsheet.  Readers will see this portfolio is in good shape.  With a few small purchases, we will have this portfolio completely in balance.


In the following screen shot we have the QPP analysis of the Einstein.  Readers familiar with the critical data see that this asset allocation is nothing special.  The portfolio metrics fall short of our goals with exception of the projected return.  That 8.5% is strong based on the S&P 500 projection of 7.0% over the next year.

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5 ETF Bond, REIT, & Gold Portfolio

Is it possible to build a portfolio that does not include U.S. stocks or international equities?  The following portfolio was suggested by a reader and it originates from a well-known author.  Here are the five ETFs that make up this conservative portfolio.

  • 1-3 Year Treasury Bond (SHY)
  • Intermediate Bond ETF (BIV)
  • Emerging Market Bonds (EMB)
  • Real Estate (VNQ
  • Gold (GLD)

Below is the Quantext Portfolio Planner (QPP) analysis. Readers may be surprised how strong a non-equity portfolio can be considering it only includes five ETFs.


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Mosaic Portfolio Lookback – 31 March 2009

Here we are in the depths of the bear market on March 31, 2009.  What signals or information come out of a QPP analysis and what is the Delta Index worksheet showing us?  Look over the QPP analysis carefully and see if you spot any unusual signals.

The historical data does not look good, but the projections for return and standard deviation are about average.  We have not seem too much change over the duration of this bear market.  The same cannot be said for the Delta Index worksheet as shown below.

Platinum memberships are available for $5.00 per month.  See special in the membership signup page.


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Mosaic Portfolio Lookback – 31 December 2008

One Quarter Away From Bear Market Conclusion

Here we are at the end of 2008 and the market is still dismal.  What signals can we decipher from the QPP analysis and the Delta Index worksheet?  Are any clues showing up?  First, look at the QPP analysis.  Nothing was altered except for the time frame.  The data used for the analysis was moved forward one quarter.  Nothing else was changed.  While the projections do not look as strong as they did at the end of the first quarter of 2008, all looks about as one might expect.  Investors looking at this data will not pick up anything unusual.  If you look at the average annual return for this three year period one would be disappointed with a meager 0.33% value.  Otherwise, nothing stands out.

Once more we move to the Delta Index worksheet for additional information.  Remember, we are about one quarter away from the market bottom.

Do you see anything unusual?

Capture information from the Delta Index worksheet by taking out a Platinum membership for $5.00 per month.

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Mosaic Portfolio Lookback – September 30, 2008

Bear Market Analysis of 2008

Investors with a memory of 2008 know that desperation was in everyone's mind.  How far could the market decline and when would it stop?  Continuing with our look-back theme, what information can we glean from the QPP analysis and what were the Delta Index signals?

There is nothing I can see in the following data that throws up any warning flags and we are in the middle of a major bear market.  All the critical values look quite strong.  The projected Return/Uncertainty ratio is still above 0.60 and the Diversification Metric is above 40%.  What more can one demand from a portfolio?  Again, we need to look to the Delta Index worksheet for further guidance.  Is it of any use?

To take advantage of the Delta Index worksheet, become a Platinum member for $5.00 per month.

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Rube Goldberg On Steroids

Departing from the world of investing, take a few minutes to watch the ultimate in Rube Goldberg machines.  I've never seen anything quite like it.


Mosaic Portfolio Lookback – June 30, 2008

June 30 of 2008 was a period when the market was in a deep funk, and sinking.  In the following analysis we put the Mosaic Portfolio in that situation and analyze it, now knowing what happened.  What were the signals at that time?  Since the end of the first quarter, the projected return dropped slightly and the Return/Uncertainty ratio declined.  The diversification percentage dropped as well.  This same portfolio is not looking quite as strong as it did after the first quarter, but overall, it is still quite positive.  Looking at this data in isolation, I would not be worried.  Now scroll down to the Delta Index worksheet.


Here we see a different picture.  The following Delta Index worksheet is still quite negative.

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Mosaic Portfolio Lookback – 31 March 2008

Moving from January of 2008 on to the end of the first quarter in 2008, what is the Mosaic Portfolio projecting?  The following QPP analysis continues to show strong returns and low volatility.  This gives rise to an above average Return/Uncertainty ratio of 0.66.  Remember that anything above 0.60 meets the desired target.  The diversification metric and portfolio autocorrelation values are also desirable.

Now we need to investigate what the Delta Index worksheet is showing.

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Portfolio Performance: 27 May 2011

Portfolio Performances Updated

All but one portfolio showed improvement vs. the VTSMX index.  Improvements were also evident for the Sortino and Retirement ratios.  Our asset allocation plans were working in full force this past week, a positive signal. Only the newest portfolio, the Franklin, lost ground and it is much too early to draw any conclusions.  As mentioned before, we are going to ride with the current Franklin allocation through the end of the second quarter or the end of June before making further decisions.

Users of the TLH spreadsheet will soon be adding another row of data to the SR worksheet so as to maintain accurate records for the Sortinio and Retirement ratios.

Portfolio Performance - 05/27/2011

Portfolio Last Update Launch Date Tracking Tool Port. IRR ITA Index Diff Port. vs. ITA Index VTSMX IRR Diff. Port. vs. VTSMX Index IR SR RR
AA-Mosaic 04/29/2011 07/21/1999 Captool 3.09% NA NA 3.0% 0.09% 0.05 NA NA
Curie 05/27/2011 12/26/2007 TLH SS 6.1% 0.8% 5.3% 2.2% 3.9% NA 11.9 4.2
Mosaic2 04/29/2011 07/19/1999 Captool 5.27% NA NA -0.58% 5.85% 0.15 NA NA
Newton 05/27/2011 06/02/2008 TLH SS 10.2% 13.3% -3.0% 8.4% 1.8% NA 1.4 1.4
Passive Port. 04/29/2011 12/01/2000 Captool 5.83% NA NA 3.35% 2.48% 0.70 NA NA
Schrodinger 05/27/2011 12/01/2000 TLH SS 5.5% 5.4% 0.1% 3.4% 2.1% NA 4.1 1.5
Jane 04/29/2011 02/14/1997 Captool 9.60% NA NA 2.94% 6.66% 0.54 NA NA
Einstein 05/27/2011 06/30/2008 TLH SS 15.4% 17.7% -2.4% 11.9% 3.5% NA 4.9 4.9
Gauss 04/29/2011 02/19/1997 Captool 9.74% NA NA 2.91% 6.83% 0.23 NA NA
Kepler 05/27/2011 11/01/2008 TLH SS 20.4% 22.8% -2.4% 20.2% 0.2% NA 0.07 0.07
Scrappy 04/29/2011 08/14/2008 Captool 14.54% NA NA 7.0% 7.54% NA NA NA
Bohr 05/27/2011 08/14/2008 TLH SS 13.3% 13.6% -0.3% 6.7% 6.6% NA 3.6 3.6
Kenilworth 05/27/2011 08/18/2010 TLH SS 20.8% 23.3% -2.5% 27.4% -6.6% NA -0.04 -0.04
Franklin 05/27/2011 05/6/2011 TLH SS -7.0% -5.5 -1.5 -5.0-% -2.0% NA -0.07* -0.07*
Projects 04/29/2011 12/01/2000 Captool 5.97% NA NA 3.03% 2.94% 1.33 NA NA
Washington 04/29/2011 06/18/1999 Captool 3.27% NA NA -0.18% 3.09% 0.28 NA NA
Maxwell 05/27/2011 12/25/2000 TLH SS 1.1% 10.1% -9.0% 4.9% -3.7% NA -0.15 -0.18
Adams 04/29/2011 06/18/1999 Captool 3.72% NA NA 3.05% 0.67% 0.72 NA NA
Euclid 05/20/2011 06/30/1999 TLH SS 2.0% 9.9% -8.0% 5.0% -3.0% NA -0.13 -0.13
Jefferson 04/29/2011 03/13/2008 Captool 6.82% NA NA -2.97% 9.79% NA NA NA
Madison 05/20/2011 03/13/2008 TLH SS 6.2% 15.0% -8.8% 10.5% -4.4% NA -0.18 -0.18

“Creme List” For 27 May 2011

Top Stocks

Platinum members can view the "Creme List" of stocks for 5/27/2011.  Stocks removed from the list this week are:  CVS, EXPD, CHKP, and SPLS.  It is unusual to see so many excised in the same week. No new companies were added to the list and an old favorite recaptured the top position.  Note that only two stocks are priced to buy.

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