Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

A New Approach For A New Year

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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…)

Hedged Portfolio Performance

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Fellow Slopers may recall I wrote about the hedged portfolio method a few years back. The basic idea was to find securities that had high expected returns over the next six months and were also relatively cheap to hedge, and then to buy and hedge a handful of those names every six months.

I backtested the approach a couple of years ago, and wrote it about here at the time (Does Hedged Investing Work?). You can also find interactive versions of those backtests on the Portfolio Armor website. Since April though, I’ve been tracking the performance of portfolios posted in real time. I wrote about the performance of some of those early portfolios here. Since June the beginning of June, I’ve been creating a few portfolios each week. Here’s how the first cohort of them performed from June 1st to December 1st. (more…)

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