MFO Premium Webinar: Guest Lynn Bolin and Back To Basics Mike, I like MFO's Portfolio Tool for the metrics. I use Fidelity's because it it quick and combines funds held elsewhere. Morningstar's has some neat features, but I haven't used it in a while. The December data is available on MFO. I uploaded them into my Ranking System. Here are some of the defensive funds that I own or have written about recently. Over the past few months I sold or reduced holdings in SWAN, DRSK, IAU, and TAIL. I will cover the December Rankings in the Webinar.
Name, Symbol, Lynn's Rank, MaxDD, APR, Rtn 3 mon, Trend, Flow, Yield, SMA10
Aptus Defined Risk, (DRSK), 89.2, -3.1, 13.4, 0.2, 0.6, 4.5, 1.18, 5.3
KL Allocation Inst, (GAVIX), 82, -2, 17.2, 4.9, 3, -0.1, 2.16, 11.3
BlackRock iShares Gold, (IAU), 78.2, -10.3, 21.2, 0.2, 2.4, -0.5, 0, 12.6
T Rowe Price Multi-Strtgy Tot Rtrn, (TMSRX), 77.1, -4.7, 10.3, 4.6, 2, 9.5, 0.83, 4.5
Amplify BlackSwan Growth & Treas Core, (SWAN), 62.4, -5, 19.4, 5.1, 3, 0.4, 0.35, 7.8
Invesco S&P 500 Downside Hdgd, (PHDG), 56.4, -6.2, 13.4, 0.3, 1.5, -0.1, 0.64, 14.6
Hussman Strategic Total Return, (HSTRX), 45.3, -2, 11.4, 0.4, 0.5, -1.7, 0.52, 8.7
ATAC Rotation Inv, (ATACX), 20.5, -8.1, 36.3, 16, 9.4, -4.4, 0.06, 29.1
Cambria Tail Risk ETF, (TAIL), 19, -14, -4.1, -5.1, -1.7, -7.1, 0.36, 3.3
disconnect analyses I think an increase in individual investors was also a factor. Betting on stocks when sports weren’t available. -
WSJ article, open for some reason“ 2020 will be known as the year that individual investors dove into financial markets and doubled down, ....Driving the interest was a combination of factors that started with an industrywide shift to commission-free trading in 20
19 but swelled as market volatility grew. As the coronavirus rolled across the U.S., millions of new investors found themselves stuck at home, some with extra time on their hands to learn about the markets. Others, unable to bet on sports or visit casinos, found the stock market’s outsize swings presented the perfect outlet to make bets.”
And as posted earlier this week: Market Edges Toward Euphoria, Despite Pandemic’s Toll
https://www.nytimes.com/2020/12/26/business/investors-bull-market-pandemic.html?referringSource=articleShare“ The appetite of individual investors has been an unexpected byproduct of the pandemic. For many, trading stocks started as a way to indulge their speculative itch when other avenues, such as sports gambling, were effectively shuttered.”
Dodge & Cox Emerging Markets Stock Fund update I have been disappointed with Dodge’s international strategy. DODFX has been an average performer for some time. I am skeptical about an EM offering unless they are looking to bring in a new team.
"The following are listed on the filing as managers of the new emerging markets fund: Charles F. Pohl, Diana S. Strandberg, Mario C. DiPrisco, Sophie Chen, Rameez Dossa, and Robert S. Turley.
Pohl, Strandberg, and DiPrisco are also named managers on the $37.1bn Dodge & Cox International Stock fund (DODFX), which currently has around 6% of its assets in emerging markets." Link
The Psychology of Money “'You can plan for every risk,' he says, 'except the things that are too crazy to cross your mind.' For that reason, 'the most important part of every plan is planning on your plan not going according to plan.' In other words, plan as if another 2020 might happen this year—or in any given year.""As a result, we all have biases—sometimes conscious but usually not—in how we think about money. Of course, there’s nothing you can do to change your own history. What you can do, though, is to try to be aware of these unconscious biases. That, in turn, may help you to be as objective as possible in making financial decisions."Link
TAIL I don’t think most people need to hedge their whole portfolio. You can make TAIL a 10% position and get good risk adjusted returns with it. I don’t trust tactical portfolios even if they are rules based anymore because they mostly stink and aren’t consistent so it’s good to see more options becoming available.
2020 Asset Performance The article illustrates the performance of various assets in 2020.
It was quite a year!
Link
MFO Ratings Updated Through December 2020 - Year-End Data ... Yay! All ratings have been updated on
MFO Premium site, including MultiSearch, Great Owls, Fund Alarm (Three Alarm and Honor Roll), Averages, Dashboard of Profiled Funds, Portfolios, Quick Search, and Fund Family Scorecard. The site now includes several analysis tools, including Correlation, Rolling Averages, Trend, Ferguson Metrics, Calendar Year and Period Performance.
Given how far markets tumbled in March, most funds ended the year in positive territory, some very positive.
More
here.
HNDL I guess OK to hold in a taxable account then, unless they happen to capture a ton of Capital gains.
It's an ETF of ETFs (largely bond ETFs or broad equity index funds from Vanguard, iShares, etc.), so it shouldn't be passing through much in the way of cap gains. And it doesn't seem to have generated cap gains through its own trading so far (see the Distributions page I mentioned above).
But with a turnover rate of 83% (per Prospectus p.
1 pdf p. 3), sooner or later some cap gains distributions seem likely.
TAIL SWAN might minimize its losses on its own but it’s not going to provide protection to existing positions like TAIL will.
True, perhaps, but in order to use TAIL as protection to your portfolio as a whole you would need to own a ton of it, and it simply is not a great long-term holding IMO. It has suffered a
14.27% drawdown and TAIL's webpage itself notes that "Cambria expects the fund to produce negative returns in the most years with rising markets or declining volatility." The only way I personally could see TAIL being a sensible choice is as part of a market-timing strategy, and that mostly doesn't work. For the core of my portfolio I'd much prefer to ride the market and limit losses with SWAN or even MNWAX.
Emerging Markets Small Cap VAESX or WAEMX
Hard to find two better than these.
HNDL One won't know until after the end of the year, when the ETF can calculate the exact numbers, how much of any distribution consisted of ROC. Until then, all figures are estimates:
The Fund will provide disclosures, with each monthly distribution, that estimate the percentages of the current and year-to-date distributions that represent (1) net investment income, (2) capital gains and (3) return of capital. At the end of the year, the Fund may be required under applicable law to re-characterize distributions made previously during that year among (1) ordinary income, (2) capital gains and (3) return of capital for tax purposes. An additional distribution may be made in December ...
Prospectus, p.
16 (pdf p.
18); emphasis added.
Historically, every one of the estimates included a nonzero return of capital as part of the distributions. See
this page, click on "Distributions" tab.
For example, the estimate for the December distribution shows nearly 5/6 (82.3%) of the distribution coming from return of capital.
http://strategysharesetfs.com/wp-content/uploads/funds/7handl/Rule19a_1_2020_12_Distribution.pdf[A marketing note: the ETF says that it is 23% leveraged. It computes this by dividing the amount of leverage by the market exposure. It gives
an example of buying a house with 77% down and 23% borrowed. This is really 30% leverage in terms of your money at risk. If that $
100K house loses
10% of value, your $77K investment has declined $
10K, which is a
13% decline not a
12.3% loss.]
The Making of Biden's Superfast Push for Clean Electricity A puzzle piece that might help solve the funding part of Biden's energy policy challenge:
Biden, who oversaw the Obama administration’s stimulus work as vice president, unknowingly left himself a down-payment for the work ahead: $40 billion in unused Energy Department loan authority awarded under the 2009 stimulus. That pot of money could offer a way to kick start his climate and infrastructure plan
the incoming Biden administration could simply tweak the loan program’s language to make it the backbone of a government-wide clean lending bank that enables the rapid deployment of new innovations, like the installation of batteries and other energy storage technology to support the growth of renewable power.
https://politico.com/news/2021/01/01/biden-clean-energy-453171
