“Holy Cow” Portfolio

This is the first look at a very interesting portfolio.  In fact, using QPP analysis, it is one of the best I've seen since I started using Considine's software.  This is only the first iteration as I've tested a few combinations that show even better projections.  I'll let Platinum readers chew on this portfolio over the weekend.  Shoot holes in it.

 

This blog entry is not available for Seeking Alpha use.  This blog entry is reserved for Platinum members only.

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“Creme List” for 8 July 2011

Twenty-five companies made the elite list this week, the largest number in recent memory.  No new companies cracked the "Creme List" and only one was cut from the list.

For new readers, note that the "Creme List" comes from a very old tradition that goes back beyond the creation of ITA Wealth Management.  While I've moved through my stock picking days, I now focus on portfolio construction using ETFs.  Nevertheless, there are times when it makes sense to drop a few highly selected companies into an index oriented portfolio.  Hence, we become Mosaic investors.  If one is committed to developing a broad portfolio that covers global markets, it is nearly impossible for an individual investor to pick stocks from the many different asset classes we use in our portfolios.

 

 

Platinum membership is available for $5.00 per month.  View the "Creme List" with a membership today.

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Active Management: A Mistake

Much is written about active vs. passive management. Harold Evensky defines active management in his book, "Wealth Management" and I quote.

"Active Management is the art and science of security selection based on a belief in a manager's ability to consistently and accurately evaluate current and/or future events better than other investors. The core philosophical basis is that by brains, hard work, and/or technology the active manager can, over time and net of costs, beat the system. As selecting one asset class in lieu of another is an 'active' decision, market timing and active asset allocation are subsets of active management."

Evensky would likely consider portfolio tilt toward value as a form of active management.  If the percentages stay fixed for long periods, I think of this style manager as more passive than active. This is where it becomes difficult to button down managers into active or passive management styles.

Passive management is defined in other posts on this blog.  Here is another passive management style link. To find additional support for passive investing over the active management style, do searches for Mosaic and passive.

Keep in mind that 80% to 85% of all investors disagree with the passive style of investing.  The stock market is filled with "Lake Wobegone children."  Everyone thinks they are above average investors.

Photograph: The Arches National Park