This opportunistic value portfolio focuses on purchasing cash generating firms with strong competitive positions when we believe they are out of favor and significantly undervalued. The portfolio is long only, may use minimal margin, does not trade leveraged or inverse ETFs, and is more concentrated than a typical mutual fund.
I try to buy when there are a lot of forced sellers in the market and to sell when a lot of undisciplined money has entered the market. As Buffett recommends, I look closely at stocks of good companies that are cheap because they are facing a large, one-time, solvable problem. I'm willing to do very little buying or selling for long periods of time, though I am always learning and doing research. I take taxes and transactions costs into account in my buying and selling decisions, but I don't let the tax tail wag the investment dog.
My fundamental approach concentrates on cash flow analysis as well as standard multiple analysis.
My primary screening strategy involves eliminating stocks ranked in the bottom decile based on any one of several criteria found by academic research to result in poor performance. I then rank the remaining stocks on value and quality using a rule derived from my own research.
My secondary screening strategy involves monitoring the 13Fs of top investors or the postings of anyone who shares compelling ideas on the internet.
I perform rigorous fundamental analysis on all stocks that emerge from either screen before adding them to my portfolio.
I generally hold between five and twenty stocks. I might occasionally hold a large cash position. I typically will not make a purchase that causes the weight of a single stock to exceed 20% of the portfolio, or the weight of stocks that belong to a single industry to exceed 40% of the portfolio. I put tax efficiency and avoiding transactions costs ahead of rebalancing for diversification.
As a stock approaches my estimate of intrinsic value, I revaluate it and sell if I have an alternative with a better expected after-tax return. If a stock falls sharply, I also revaluate it, but I only sell if the fundamentals have deteriorated. I do not get scared out of a stock based solely on negative price action. As Peter Lynch said: "When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30. You just don't know when you can find the bottom."
I might occasionally buy stock in a firm that lacks a strong competitive advantage if it is very cheap and an identifiable catalyst is present. I might purchase an OTC stock or an ADR based in a country that is not on my usual list if the opportunity is extremely compelling.
Past performance is no guarantee of future results.
Performance of the portfolio manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions, and broker commissions. Manager returns include trades that fail Covestor's trading rules, do not reflect any Covestor suitability or risk score restrictions and are exclusive of Covestor fees. More
Average subscription returns ("Avg Sub" or "Avg Client") are calculated by Covestor and are composed of the average, daily, time weighted returns of all active subscriptions to the underlying portfolio. These daily average returns are then linked together for the timeframe requested. In addition, these returns include cash, dividends and earnings distributions, brokerage commissions, Covestor advisory fees, and reflect individual client suitability and risk score restrictions. More
All graph data is as of the end of day for the referenced period, unless otherwise specified. The subscription minimum is the minimum subscription required to follow a particular portfolio. The minimum amount is determined by Covestor, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. Variables such as corporate actions or foreign exchange may affect daily performance displays. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither Covestor nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations. Benchmarks presented are total return and therefore inclusive of cash, dividends and earnings distributions but not transaction costs.
Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.
All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of Covestor has been provided by the Portfolio Manager. Covestor makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Covestor. Transaction history is available upon request. Portfolio classifications (Approach, Asset Class) are provided by Covestor, and are intended to serve as a general guide.
These securities are currently held in the portfolio manager's brokerage account. Holdings in the "Replicable Holdings" table currently pass Covestor's trading rules, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription holdings may vary.
These transactions were executed in the portfolio manager's brokerage account. Those marked as "Replicable Transactions" passed Covestor's trading rules and were eligible for replication at the time of execution, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription trade activity may vary.