If your alma mater or favorite college team did not make the tournament on Selection Sunday, we’ve got another option for you!
Even if you don’t like or follow college basketball, we think you’ll enjoy what we pioneered and have put together.
My Portfolio Guide, LLC was the first investment firm to publish a March Madness investing bracket where we share our picks and match them up against each other. We break down and assign each of the four “regions” with an asset class and then pick teams (stocks) that we think have the best chance at doing well relative to others.
Not only is this “exercise” a way for us to share our ideas from a macro perspective, but it offers a fun platform to dig into a couple specific investments and themes we are following or excited about in the year ahead.
Click here or below to see or enlarge the entire bracket for 2024.
Our Final Four Investing Bracket slots 48 positions against each other and we mainly want to show why we see one investment doing better than another over the course of the next year. One caveat to keep in mind is that while there are 48 total investments within our bracket, it does not mean we like them all; some are there for illustrative purposes or to discuss a certain theme playing out in the stock market. Lastly, the way these are initially “seeded” does not reflect our current confidence in them. For example, a #1 seeded investment could lose right out of the gate just as a #12 could potentially win it all. In other words, these investments (or “teams”) are ranked and seeded on a number of factors but one of the main drivers is how hot they recently performed within the past few months or recent year.
And so are we… The world stopped pretty much everything at one point during the pandemic and sports were of course no exception. For true sports fans there was nothing more depressing than watching cornhole tournaments or empty arenas void of fans, sounds, and energy. Even if you don’t like or follow college basketball, we think you’ll enjoy what we pioneered and have put together.
We’re proud to say that My Portfolio Guide, LLC was the first investment firm to publish a March Madness investing bracket where we share our picks and match them up against each other. We break down and assign each of the four “regions” with an asset class and then pick teams (stocks) that we think have the best chance at doing well relative to others.
Not only is this “exercise” a way for us to share our ideas from a macro perspective, but it offers a fun platform to dig into a couple specific investments and themes we are following or excited about in the year ahead.
Click here or below to enlarge and see the entire bracket for 2023.
You’ve behaved fairly well after some insanely raucous behavior last year. You (the market) has actually surprised a lot of folks just barely six weeks into the year. While there is plenty of calendar left in 2023, we’re watching you and it’s simply interesting to see that half the room doesn’t trust your next move while the other half wants to… but still can’t!
The books are closed on 2022, and what a year it was! The past few years have brought the word “unprecedented” to a whole new level. Both stocks and bonds were down in 2022, which is extremely rare and actually only happened twice in the past 100 years! (1931 and 1969). We won’t rehash it all but it’s not just that stocks were down almost -20%, but rather that what was supposed to offset some of that drawdown, never did. Historically bonds have basically always mitigated some of the pain of stocks getting tattered but not last year. 10-year treasury bonds were also down -15% and if you want real pain, 30 year bonds got torched by almost -30%. Name a stretch in your lifetime that was worse? Even if you’re 90 years old…you can’t.
So, enough about what has happened but our focus today is on how this plays with your mind. Below we’ve written a list of all the financial media talking heads as well as economic experts who are notpredicting a major recession. Look through our extensive list of names and what do you see?
Oh wait…there are no names listed. Feel free to comment below or let us know if we missed anyone but rarely have we ever seen such an environment of groupthink that it begs the question…what if they’re all wrong? There have been some major economists who in times past have really missed the mark but for some reason they still have a platform and the ability to get your attention. In a future article (or letter to you, Mr. Market) we’ll do a little report card on all the “gurus” who somehow still command everyone’s eyeballs but often can’t correctly guess how many fingers they have. OK…perhaps we’re laying it on a little thick here but hopefully you get the point. There is too much groupthink going on right now and it’s times like these when it pays to take a little bit of a contrarian view.
We wrapped up January in surprisingly good fashion (again…almost everyone got it wrong but we’ll modestly remind clients we did not). Couple that with what is the proverbial “Santa Claus” rally period and you have some interesting history to look at. When stocks are lower the year prior, but gained during the Santa Claus period and first five days of January…we’ve seen a market average +27% the next year. Could it happen this time? Maybe not to that extent but if it doesn’t it will be the first time ever it didn’t at least go higher (nine for nine prior).
Now nobody said it would be smooth sailing (it rarely is). Expect a bit of a cooling down period as we now digest Q4 earnings season until month end. It also happens to be seasonally be a time for a natural pause or break with the back half of February being historically weak.
Regardless, barring some major unexpected calamity, this likely pause in the markets is a perfect opportunity to not only catch your breath (with Mr. Market) but also take a few chips off the table in areas you’ve been wishing you had earlier. For example, most people who had way too much tech on the way up got slaughtered in 2022 with the Nasdaq peeling off -33%. Now that we’ve seen a nice bump in tech stocks to start the year, why not sell some and reallocate to another area?
If you read the recent quarterly newsletter from My Portfolio Guide, LLC, you’ll note the areas we still like. Commodities are down to start the year…what a great place to be building a hedge if you missed their run-up prior. Along those same lines, what also helped our model portfolios last year (relative to what most people had outside of stocks and bonds) was gold. The dollar will retreat some more (unhitching the trailer) so we couldn’t be more bullish on gold being a key component in this environment. One more area that has slumped a bit to start the year are oil stocks (another rare bright spot in 2022). In typical human and emotional fashion, people somehow don’t want single digit multiple (i.e. cheap!) stocks with high yielding dividends. What’s not to like?!? Even Joe Biden told us earlier this week during the State of the Union that we’ll need oil for at least another 10 years…
Lastly, if you’re in the mood on making bets….Here’s a tip for all those watching the Super Bowl this Sunday. If you don’t have a dog in the hunt and are simply “hoping for a good game”…change your tune right now; you should want a blowout (perhaps not for entertainment value but for the market). In years when there is a single digit win during the Super Bowl the market only averages +5% and higher less than 60% of the time. However, on years with double digit margins of victory the market averages +11% and a 79% chance of going higher.
As silly as the “Super Bowl Indicator” is by the way, we did write about it last year (click here) and true to form…perhaps that’s why the market got drilled (kidding!). The Eagles are slight favorites but if you’re just an investment geek and want to root for a team…the football Gods all say the Chiefs need to win and ideally by 10 points or more. It likely won’t happen so enjoy the game and those expensive commercials. By the way, they used to cost advertisers a cool $1 million a few years ago for a primetime spot but are now upwards of $7 million! (and we have the gall to complain about $7 eggs?!?)
In a year where the stock market has provided zero safe places to hide…you may have changed, the markets certainly have, but one thing has not; the Permanent Portfolio.
We’ve reviewed the Permanent Portfolio before but believe it’s time to check in and provide an update on how it’s doing relative to the broad markets now as well as chime in on whether the strategy still has merit going forward. For some quick background, our first original review was written in June of 2013 (click here to see that). Most recently we revisited the topic with an update in November of 2020 (click here) as we climbed out of one of the wildest years in world history amidst a global pandemic.
If you didn’t hit the embedded article links above, the Permanent Portfolio is pretty simple at face value. The Permanent Portfolio is a seemingly basic portfolio allocation strategy created by investment advisor Harry Browne in the 1980’s and outlined in his book Fail-Safe Investing back in 2001. Here’s the secret (simple) sauce and how each asset class should do during repeatable economic cycles:
Why do we bring up this article now? Lots has changed but lots has not! More than anything we believe that our current environment has so many unknowns embedded in it after one of the wildest rides in stock market history. We won’t dig into the weeds too much but one could easily make the case that any of the following scenarios could take place over the next year:
The Stock Market could absolutely continue to defy odds and climb higher.
We could see another market crash like we saw in the spring this year as there are plenty of issues that have not gone away (Covid-19, political unrest, handcuffed economy, geopolitical concerns)
A deteriorating dollar, inflation on the horizon, a ticking time bomb of debt, and more fear of a prolonged recession, negates any appeal for stocks for quite some time.
We trade up, down, and basically sideways as this market consolidates and digests one of the most tumultuous years in history.
Without rehashing all that has transpired in 2020, we believe that being properly allocated and prepared for just about anything that comes our way seems like a wise way to go. The market is almost always unpredictable but there are times when reading the tea leaves and figuring out clear direction is even more difficult; we believe that’s exactly where we’re at right now.
If you didn’t read our old article from 2013, the basis for the Permanent Portfolio strategy is simple at face value: You divide your portfolio into four distinct and fairly uncorrelated asset classes (Cash, Bonds, Gold, and Stocks). Ideally at any point in most economic cycles one of these asset classes will stink it up but the others could compensate and outperform. During prosperous times Stocks should win. When there is inflation a case can be made for Gold. Should the opposite occur and we get deflation you would ideally see long-term Bonds do well. Lastly, during a severe recession Cash is perhaps your best friend. When coupled together you may never hit a home run but this approach can mitigate disaster and still produce modest long-term returns.
We certainly spend a lot of time writing to you about the stock market and all the twists and turns it brings investors. Today, we have the pleasure of mixing things up a bit as we dive into something far larger and more intricate than the stock market; we’re going to talk about the bond market!
On a recent trip out to Denver, CO My Portfolio Guide had the opportunity to meet with Troy Johnson, CFA and Director of Fixed Income Research at Denver Investments. We were able to ask him and his team several questions about the bond market and how they’re navigating it in these interesting times.
My Portfolio Guide: First and foremost, thank you very much for making yourself and your team available. As you know, we own positions in the Westcore Plus Bond Fund as well as the Westcore Municipal Opportunities Fund. We understand your team was awarded a Lipper Award. Without necessarily giving us a pitch on your firm, could you briefly expand on the recent accolades?
Westcore: The Westcore Fixed Income funds won the Lipper Fund Award for best fixed income small fund group for the three-year period ending November 30, 2016, placing first out of 74 eligible fund families. The award was granted based on Lipper’s measurement of risk- adjusted returns across our multiple fixed income fund offerings. We believe that winning the award affirms the soundness of our approach across multiple strategies as well as the hard work and talent within our fixed income team.
My Portfolio Guide: Excellent, and congratulations on the awards and success. Related to this, could you share your opinion on what makes your firm or approach different than some of the larger bond shops?
Westcore: We utilize an investment approach that emphasizes income and security selection rather than a focus on trading. This generally results in a heavier weighting towards credit oriented issues that offer enhanced income. We recognize rigorous fundamental research is a necessary component of such an emphasis and differentiate ourselves within that process in the following manner:Continue reading →
Is your bracket already busted? This year’s March Madness tournament opened up with very few upsets until this past weekend. Much like the stock market, we see a similar trend happening right now. What follows is how we see things panning out but first, here’s a little background on how one of the most famous sporting events in the United States correlates to the investing landscape.
Seven years ago we became the first Registered Investment Advisor to use the NCAA basketball tournament as a way to show our readers a forward-looking view on the stock market! We break down and assign each of the four “regions” with an asset class and then pick teams (companies) that we think have the best chance at doing well relative to others.
Last year started off much differently than 2017 and as we wrap up the first quarter …some trends are emerging while others continue. If you eyeball the overall theme of this years bracket it will become clear that we’re picking some stocks that should continue to do well under the Trump administration. Whether you love him or hate him, ever since Donald Trump assumed office, the stock market has risen. The proverbial “Trump bump” is real and while we personally believe he needs to stay away from Twitter, there is no question that the stock market and certain economic sectors are primed to perform. Continue reading →
You hate uncertainty; that fact has been established from the day you began trading. If the rest of the investing public hasn’t heard about “Brexit” vs “Bremain”…it’s not necessarily a bad thing. There is always something to worry about and now with a vote by the United Kingdom to leave the European Union the potential implications and chants of uncertainty will continue to create worry and panic.
Ironically enough, even amidst all the doom and gloom, the world is not that much different than before the vote. Although the U.K. surprised many with its vote to leave the EU, this decision and the potential fallout will take a couple of years to fully play itself out. Even though there will clearly be political uncertainty and initial volatility (which is natural)…the UK will have two years to negotiate the terms of its exit and establish a new relationship with the EU. Although there won’t be a shortage of opinions, this doesn’t imply an automatic death to the stock market!
It’s times like these that are EXACTLY why people overreact and make critical mistakes. Once people get over their initial reaction (shock, surprise, fear etc) the markets will see relief in knowing there is a result and a definitive decision. In other words…there will be some basic element of certainty and that allows markets to naturally correct and go back to moving based on actual fundamentals as opposed to speculative forces or fear.
What should one do in the near-term and will this lead to something worse? Continue reading →
The entertainment and shock value you provide us with the stock market might meet its match over the next few weeks. Are you ready for some surprises and wild finishes? That’s what March Madness brings each and every year! It’s also an opportunity to take a high level view of the current investment environment with what lies ahead.
Six years ago we became the first Registered Investment Advisor to use the NCAA basketball tournament as a way to show our readers a forward-looking view on the stock market. We break down and assign each of the four “regions” with an asset class and then pick teams (companies) that we think have the best chance at doing well relative to others.
This year we will dive right into our investing bracket looks and how we think the remainder of 2016 will play out.
To set the table let’s take a quick moment to recall last year and the undefeated Kentucky team. They came into the Final Four 38-0 and were a virtual lock to win it all but as you may remember the Wisconsin Badgers shocked everyone and provided the surprise millions of fans tune in for every year! This type of “upset” is exactly how we think 2016 will pan out in the Large Cap asset class.
Large Cap
Five years from now people will look back at 2015 as a year that the stock market extended its bull market run for one more year. Investors will exhibit a short-term memory lapse and forget that it actually was a very rough year with heightened volatility, the first correction, and a market that actually turned in negative numbers if you looked “under the hood”. The problem is…most people will not remember this and only look to see the S&P 500 finished positive +1.38%.
Without the “FANG” stock phenomena, however, 2015 would have been very negative. In other words, Continue reading →
We certainly spend a lot of time writing to you about the stock market and all the twists and turns it brings investors. Today, we have the pleasure of mixing things up a bit as we dive into something far larger and more intricate than the stock market; we’re going to talk about the bond market!
Dear Mr. Market: 