The 2021 Portfolio
“Free advice may not be worth what you paid for it”
- Clay Baker
The Portfolio Performance
The portfolio closed the year UP +47.10%
Our benchmark, the S&P 500 closed UP +16.26%
Spread The News Another year has come and gone and it's time to announce the new portfolio. One bit of business before we look at the new names. The cost of maintaining this site has increased, but if the number of people subscribing increases I can justify the overall cost. If the subscriber base doesn't continue to grow then I'll have to place ads to offset the cost of the site. Please share the blog, encourage friends and associates to subscribe and I'll continue to justify the cost by the size of my subscriber base. Thank you.
"Tomorrow is the first blank page of a 365-page book. Write a good one"
The New Portfolio for 2021
Below is the complete list of holdings that I plan to start 2021 with, hopefully, I don't have to make any changes to the core holdings before year-end. This was also a fun exercise in HTML coding, please make joyful sounds when you hover over a line item and it highlights ; )
Some of the names in the list are being held over, some are new. I'll be adding to the existing holdings to produce equal-weighted positions. Please note that I will be holding 50% cash after making the initial purchases on January 4th. 50% is a large cash position, VERY LARGE, but I only expect to be holding it for the first quarter or less. I'll put most of the cash to work on any meaningful pullback in our holdings. Overall the list is shorter than last year to get greater concentration, and I do anticipate selling some of the small-cap biotech stocks around mid-year, depending on how those companies execute.
Keep Me Honestted are the closing prices from December 31st, the price I pay on January 4th will likely differ. Please do not randomly buy these stocks. I will be posting a new spreadsheet that illustrates how to allocate each of the equities to the overall portfolio. The allocation is your hedge against volatility and rotations in the market. Picking good stocks with a bad allocation is the same as picking bad stocks because you will change the risk profile of the portfolio.
Kepp Me Honest
1. Today is a good time to carefully leg into stocks again (3-20-2020):
Looking back I should have said, "Mortgage the house and sell the kids!!!" Late March was the bottom and stocks achieved remarkable gains from that point.
2. Worst Case: S&P 500 decline further to around 2,100 - 2,150 (3-28-2020):
I got this one wrong. Over the next two days after making this prediction we saw a small decline, but on March 30th the S&P 500 rocketed higher and never looked back. @,100-2,150 never came into view.
3. Middle Case: S&P 500 level out around 2,650 - 2,700 (3-28-2020):
The overall market went much higher than this, but the 200-day moving average did in fact follow at this level. I'll say it was a miss, but basically a neutral call.
4. Best Case: YE S&P 500 eventually rise to around 3,000 - 3,200 (3-28-2020):
Who would have guessed that my bold call of 3,200 would be dwarfed by the actual closing price of 3,756.07, more than 500 points higher than the top of my best-case scenario? It was a miss, but a pretty high quality miss.
Who would have guessed that my bold call of 3,200 would be dwarfed by the actual closing price of 3,756.07, more than 500 points higher than the top of my best-case scenario? It was a miss, but a pretty high-quality miss.
5. Market bottomed March 23, 2020 at S&P 500 2,237.40 (4-17-2020):
Once the momentum had established itself, I made this call on April 17th. At the time a number of analysts were predicting that we would have a major decline and that the bottom wasn't yet in. I disagreed and called the bottom officially on March 23rd, saying we would not see those levels again in 2020. A win.
"Markets don't go to zero, Portfolio's do.
Buy quality, be patient...and look twice for motorcycles."
- Clay Baker
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Keep Me Honest 2021
The S&P 500 will achieve year-end earnings of $170-$175 (1-1-2021).
We are likely to have a significant pull-back during the 1st quarter, about 5%-10% (1-1-2021).
Stocking picking will outperform algorithmic trading again as it did in 2020 (1-1-2021).
Rule #1: Don't lose money
Rule #2: See Rule #1
Rule #3: Portfolios go to zero, markets don't, Stay Invested
Rule #4: When good stocks you own drop 10% below your cost basis, add shares
Rule #5: Bull markets aren't sustained without the Transports
Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase
Rule #7: When an investment bank sells below book value, buy it
Rule #8: Tips are for waiters. Do your own homework.
Rule #9: Don't sell a stock because you're bored with it. Do your own homework.
RULE #10: Being early and being late is the same as being wrong...move on.
Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:
AMD, AMRN, AMZN, AAPL, ARKK, ARKG, CNRG, ENPH, FB, GNRC, GBTC, GLD, HRTX, HD, IPOD, MSFT, NVDA, PSTH, TWLO, VBIV
I am invested short in these securities mentioned in this post:
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.