Two More Days
“Nothing is more powerful than an idea whose time has come.” - Victor Hugo
The Portfolio
As I'm writing,
The portfolio is UP +45.98% YTD
Our benchmark, the S&P 500 is up about +15.36% YTD
Two More Days of Trading With just two more days left in December, we are quickly closing in on the close of this year's Stay Invested portfolio. My hope this year as in all years previous is that my readers have enjoyed the updates and maybe even profited from the equities in the portfolio.
On Thursday, December 31st I expect to be selling some of the holdings to make room for new ones. While I'm bullish on stocks in 2021, I'm also looking for a decline, maybe as large as 10% before we see the market grind higher. I'm expecting S&P 500 earnings of $170 next year, which suggests the S&P will reach 4,420 by year-end.
On January 1st I'll publish the new portfolio on the portfolio page. The first day of trading in 2021 will be January 4th.
I know that some readers are buying some of the stocks and not others because they think they can't own the entire portfolio. Now that brokerage houses offer fractional shares, anyone can own the entire portfolio and roughly achieve the same percentage results that Stay Invested achieves. Picking and choosing from the entire portfolio will have unpredictable results. If any of my subscribers need help allocating a smaller amount of money across the entire portfolio I can provide a Google Sheets spreadsheet that you can complete to adjust share quantities and dollar amounts to your own situation. Email me if you need that assistance.
I will also be going through the "Keep Me Honest" predictions to see where I had hits and misses. I really tried to make fewer predictions in 2020.
"The future ain't what it used to be" -Yogi Berra
What's Next
For the new year, I'll be adopting a new layout for the portfolio page. The new layout will illustrate more clearly how I think about how different holdings support the portfolio. Allocation, or how much money is invested in a specific holding is very important. The new portfolio will show this visually. I'll provide some explanation next year, and please feel free to post questions on the site.
I have also decided to correct something I did a couple of years ago. After the first two years of beating the market, I had a number of emails wanting to see me get to $1 million and more. At that moment the portfolio felt like a video game, which is the complete antithesis of what we're doing here. I got angry and closed the portfolio and re-booted with a smaller amount of money. At the time I was hoping to keep it real for readers who are working with small amounts of money...which is a lot of money to them.
What I did is not something that anyone would do at home. My mistake, I apologize. I frequently espouse to eliminate emotion from investing, so I think I did a disservice to my readers. My mistake, I apologize. For 2021 I will be collecting the starting and ending values for each portfolio and displaying them permanently on the portfolio page which will show the running balance since 2016. My intent is to clearly show what an investor who followed the portfolio diligently could have earned over the past five years and what the YTD gains and gains since inception are without the disruption I introduced by restarting the portfolio. My larger objective is to repeat the last five years with another five years of beating the market.
"Markets don't go to zero, Portfolio's do.
Buy quality, be patient...and look twice for motorcycles."
- Clay Baker
Stay Invested,
Clay Baker
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Keep Me Honest 2020
Today is a good time to carefully leg into stocks again (3-20-2020).
Worst Case: S&P 500 decline further to around 2,100 - 2,150 (3-28-2020).
Middle Case: S&P 500 level out around 2,650 - 2,700 (3-28-2020).
Best Case: YE S&P 500 eventually rise to around 3,000 - 3,200 (3-28-2020).
Market bottomed March 23, 2020 at S&P 500 2,237.40 (4-17-2020).
Clay's Rules
Rule #1: Don't lose money
Rule #3: Portfolios go to zero, markets don't, Stay Invested
Rule #4: When good stocks you own drop 10% below your cost basis, add shares
Rule #5: Bull markets aren't sustained without the Transports
Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase
Rule #7: When an investment bank sells below book value, buy it
Rule #8: Tips are for waiters. Do your own homework.
Rule #9: Don't sell a stock because you're bored with it. Do your own homework.
Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:
AMD
I am invested short in these securities mentioned in this post: GSX
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. This article is not intended to offer investing advice, guarantee 100% accurate predictions, or to be interpreted as providing a personal recommendation.
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