A New Approach To Portfolio Construction
Happy New Year, fellow Slopers. I know most of you are active traders, but for those of you managing money for loved ones who aren’t, this might be of interest.
With the New Year, it’s time to consider a new approach to portfolio construction. Unlike most forms of portfolio construction, Portfolio Armor‘s hedged portfolio method eschews diversification. It looks radical at first glance: instead of allocating your investor’s assets among dozens of individual securities, you put their money in up to 8 names, some of which may even belong to the same sector.
In a nutshell, you buy and hedge a handful of securities that have high potential returns net of their hedging costs. (more…)
Five-thirty in the morning is my normal wake-up time.I have a circadian rhythm with Swiss-like accuracy, so I never need an alarm, even if I’ve changed multiple time zones. I get up, glance at the quotes on the iPad, and amble downstairs with my phalanx of canines. I leash them up and head off in the dark chill of pre-dawn.
The route we take has, over time, become consistent. That is to say, footstep by footstep, it’s pretty much the same path 365 days a year. My big payoff from this journey is, at its midpoint, to pick up a fresh copy of the Daily Post, which is Palo Alto’s only local newspaper. This morning, however, had a new surprise. Just a block away from my house, I saw a car in a driveway that had never been there before; a McLaren. This is the precise model and color: (more…)