Paper Portfolio – February 2020 Update

The paper portfolio is off to a strong start in 2020. During the month of January, the paper portfolio returned 4.18% vs -0.04% for the S&P500. January was the strongest relative month since the inception of this portfolio.

While the index was also off to a strong start in the first two weeks of the year, the S&P500 quickly gave back all of the year-to-date performance as fears around a new strain of coronavirus in China infected the minds of global investors despite the virus’ limited footprint outside of China at the moment. … Read the rest “Paper Portfolio – February 2020 Update”

Paper Portfolio – January Update

Happy New Year!

During December, the paper portfolio continued to outperform the S&P500 by 0.99%. Similar to previous months, the performance of the underlying stocks continue to be dragged by the significant allocation to cash (~28% at the beginning of the month). Excluding cash, the stock-only portion of the portfolio outperformed the S&P500 by 2.23%.

With the strong performance over the last two months, the stock-only portion of the portfolio is now outperforming the S&P500 since inception in July 2019.… Read the rest “Paper Portfolio – January Update”

Paper Portfolio – December Update

During November, the paper portfolio outperformed the S&P500 by 0.92%. This number, however, masks the underlying strength of the portfolio since ~40% of the value is still allocated to cash. The stock-only portion of the portfolio outperformed the S&P500 by 3.89% with significant strength across almost all holdings except for Uber, Match, and Activision Blizzard.

Despite significant strength across most of the stocks in the portfolio, all of them continue to look undervalued over a longer time horizon.… Read the rest “Paper Portfolio – December Update”

Paper Portfolio – November Update

During October, the paper portfolio continued to show some divergence vs the S&P500, underperforming by 1.35%. While a number of the stocks recovered some of the losses experienced during September, several other stocks continued to experience weakness.

Nonetheless, each of the underlying businesses remain strong. This portfolio should be well positioned to outperform sometime in the future.

The US and China seem to have made progress towards resolving some portion of the trade conflict.… Read the rest “Paper Portfolio – November Update”

Paper Portfolio – October Update

Over the past month, there has been no shortage of news (or volatility). The paper portfolio performed quite poorly despite having more than half of the portfolio in cash (-3.49% vs +1.87% for S&P500).

September saw significant drawdowns on growth- and momentum-type investments. While the paper portfolio is composed of high quality names, there is currently meaningful correlation between the quality factor and momentum, growth, and low volatility factors.… Read the rest “Paper Portfolio – October Update”

Paper Portfolio – September Update

A month ago, I launched a paper portfolio mainly as a tool to encourage more frequent writing as well as to highlight some of the businesses I think worth discussing.

Although the portfolio held 60% cash, it managed to outperform the S&P500 Index – a very welcome surprise. A quick review suggests the large cash balance helped reduce portfolio volatility during a month of elevated market volatility.… Read the rest “Paper Portfolio – September Update”

Paper Portfolio – August Update

Starting this month I am publishing a paper portfolio that I expect to update at the start of each month. I am unlikely to update intra-month unless an unusual opportunity presents itself.

The main goal of the paper portfolio is to act as an incentive to write more often (of course at least once a month, but newsworthy items affecting the portfolio will also be soft encouragement).… Read the rest “Paper Portfolio – August Update”