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More SectorSurfer Portfolios
Gary (“YODA”) Noreen
Aerial Videographer
April 26, 2014
Los Angeles AAII SumGrowth SIG
Disclosures
Gary Noreen has had or currently holds positions in the securities discussed herein.
The information provided herein is for general information only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.
Gary Noreen cannot guarantee the accuracy, timeliness, or completeness of the information herein. The views, opinions and estimates herein are subject to change without notice at any time in reaction to shifting market conditions. Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.
Gary Noreen has received compensation (under $100) for referring people to SectorSurfer
Examples provided are for illustrative purposes only and not intended to be reflective of results you should expect to attain.
Agenda
• Performance Review
• Targeting the 1%
• Momentum
• Yale U Portfolio
• The Celeste Portfolio
• Portfolio Comparison
February: SectorSurfer Changed my Life
• Assumed 5% return when calculating retirement income. Now expect at least twice that, possibly several times.
• Increased investing confidence
• Consciously spending much more
• My relatives are hitting me up for money
12/31/2013 to March 4
Symbol Name 12/31 to
3/4 FOCPX Fidelity OTC Por:olio 8.9% VIPS Vipshop Holdings Limited 102.2% RENT Rentrak CorporaLon 72.6% PES Pioneer Energy Services Corp. 46.1% IBB iShares Nasdaq Biotechnology 18.6% BIB ProShares Ultra Nasdaq Biotechnology 39.3% JAZZ Jazz PharmaceuLcals Public Limited Company 27.0% QQQ PowerShares QQQ 3.7% EWK iShares MSCI Belgium Capped 4.5% TAN Guggenheim Solar 38.5% TNA Direxion Daily Small Cap Bull 3X Shares 9.9% VTI Vanguard Total Stock Market ETF 2.4% SPY SPDR S&P 500 1.6%
Rich-O-Meter
• Household rank in net worth & income (2011)
• http://blogs.wsj.com/wealth/2011/07/28/how-rich-are-you/
• 10 years to grow $1M to $6M @ 20% Cumulative Annual Growth Rate
Net Worth Income
1% $8,400,000 $510,000
2% $4,700,000 $370,000
3% $3,200,000 $300,000
4% $2,400,000 $240,000
5% $1,900,000 $210,000
March 4 to April 11
Symbol Name 12/31 to
3/4 3/4 to 4/11
FOCPX Fidelity OTC Por:olio 8.9% -‐11.2% VIPS Vipshop Holdings Limited 102.2% -‐20.3% RENT Rentrak CorporaLon 72.6% -‐21.1% PES Pioneer Energy Services Corp. 46.1% 10.0% IBB iShares Nasdaq Biotechnology 18.6% -‐20.0% BIB ProShares Ultra Nasdaq Biotechnology 39.3% -‐37.2% JAZZ Jazz PharmaceuLcals Public Limited Company 27.0% -‐20.0% QQQ PowerShares QQQ 3.7% -‐7.2% EWK iShares MSCI Belgium Capped 4.5% -‐0.4% TAN Guggenheim Solar 38.5% -‐17.8% TNA Direxion Daily Small Cap Bull 3X Shares 9.9% -‐22.2% VTI Vanguard Total Stock Market ETF 2.4% -‐3.6% SPY SPDR S&P 500 1.6% -‐2.8%
March 4 to April 11 Changed my Life Again
• Decreased investing confidence
• Consciously spending much less
• My relatives are no longer hitting me up for money
Thoughts On Momentum
• Momentum equities can be highly correlated
• A potential way to mitigate this problem: • Choose a strategy using widely traded funds based on broad
market indexes
• Faber 5 (Faber 4 in SectorSurfer) still looks very good • Richard Young’s February 2, 2013 presentation
• Use Faber 4 as baseline strategy
• Add other strategies and the specific equities they select only if confident they have significantly better potential than the baseline, and only as supplements
Swenson Portfolio
http
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/la
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YODA Strategies
635338024914542500-4582-1-70542
635338024914542500-4582-2-69983
635338024914542500-4582-3-70692
635338024914542500-4582-4-50027
635338035845948750-4582-5-45975
635338035845948750-4582-6-50028
635338035845948750-4582-7-45902
635338035845948750-4582-8-50490
635338035846105000-4582-9-50493
635338035846105000-4582-10-45602
635338035846105000-4582-11-78130
635338035846105000-4582-12-80973
UVU
• ProShares Ultra Russell MidCap Value
• SectorSurfer strategy: ETFs 3: FLsurfer A /d
• 3.31% gross expense ratio; 0.95% net expense ratio
Sector Surfer Metrics
• Sector Surfer Score: overall performance in a single number • Includes average return for all years & most recent three years,
and the probability of loss over a one year period Score = (AllYearReturn + 3YearReturn/2) / (40% + RiskOfLoss)
• Sector Surfer Safety • Referenced to 100 for Fidelity Income-Bond Strategy
• Higher is better Safety = 25*(AvgReturn - 2*AvgNegReturnDeviation) / (1 + (MaxDrawDown/15%)^4 + (ProbOfLoss/2%)^4)
• Sortino Ratio Sortino Ratio = (Fund Average Return - Money Market Return) / (Downside Deviation)
Model Portfolio Performance
72.8, 208, 17.1%
Sector Surfer Score, Safety, 3-‐Year Return (as of Feb. 21, 2014)
94.5, 219, 21.9%
53.9, 230, 17.0%
124, 88.1, 31.5
156, 78.4, 48.9%
60.2, 136, 13.7%
71.3, 226, 17.6%
85.7, 198, 28.6%
102, 152, 25.6%
102, 48.0, 22.9%
178, 93.6, 64.1%
137, 117, 40.8%
56.3, 121, 11.7%
122, 159, 31.1%
188, 95.6, 56.1%
220, 22.3, 58.2
128, 100, 34.8%
141, 161, 48.9%
YODA Por:olio: 257, 225, 80%
Portfolio Comparison
Portfolio Sortino Ratio
SS Score Safety
3 Year Return
10 Year Return
Chance of 15% loss in
1 year
Maximum Drawdown
Yale U 3.46 32.0 0.2 10.1% 8.7% 7.53% 42%
S&P 500 1.86 24.7 0.0 14.4% 7.3% 25.6% 55%
Faber 4 9.71 75.2 108 16.4% 20.9% 0.15% 17%
YODA 22.19 320 241 84.8% 70.3% 0.03% 38%
Celeste w/Mutual 24.79 416 504 119.6% 88.4% 0.17% 51%
Celeste w/o Mutual 23.99 419 459 90.8% 71.4% 0.07% 53%
SumGrowth calculations on April 22, 24 & 26 2014
Telecom COMMENTARY
• FCC Chairman Wheeler’s proposal to do away with net neutrality will harm consumers & California’s content industry
• Proposed Comcast-Time Warner merger is anti-competitive; continues trend towards monopoly power & abusive behavior in telecom industry
• FCC should regulate broadband as common carrier
• Write your Senators, congressman & the FCC • Ask for congressional inquiries
FEDEX Nightmare
• Google glass arrived soon after I flew to Thailand
• I had it shipped to Thailand via Fedex for $196.60 using Fedex “easy custom form”
• Thai customs didn’t accept Fedex form
• Fedex charged me another $175.57 shipping plus $172.84 customs to return it to me, which took nearly a month
• Total cost: $545.01
YODA’s Toolbox
• To be provided at AAII Los Angeles web site
• Presentations from SumGrowth SIG
• Initial bonus: Beaver Investment presentation “How I was able to retire on 16 years of investments made through JPL/Cal Tech retirement programs” • Bottom-up calculations of retirement costs & income
• $583,295 in Cal Tech retirement funds needed to retire
• Month end reports