Style Model
|
Large Value
|
||
Sector Model
|
XLF
|
0.30%
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
SHOO
|
4/28/2014
|
-3.20%
|
138
|
SR
|
6/2/2014
|
9.54%
|
103
|
CFI
|
6/9/2014
|
-1.01%
|
96
|
RRD
|
7/21/2014
|
8.02%
|
54
|
CHFC
|
7/28/2014
|
1.80%
|
47
|
ESI
|
8/4/2014
|
-44.51%
|
40
|
BSET
|
8/11/2014
|
-2.42%
|
33
|
STRA
|
8/18/2014
|
2.34%
|
26
|
PBI
|
8/25/2014
|
-0.67%
|
19
|
CLF
|
9/2/2014
|
-6.17%
|
11
|
(Since 5/31/2011)
|
|||
S&P
|
Annualized
|
12.57%
|
|
Sector Model
|
Annualized
|
25.45%
|
|
Large Portfolio
|
Annualized
|
22.73%
|
Rotation: selling CHFC; buying AFL.
All I can hear is that stupid bird screeching “Aflack!”
In any case, the Sector Model keeps plugging away, hovering
around the 30% mark for the year:
The full model took a huge hit from ESI, but it’s left me
recalculating and recalculating again to decide the best course of action going
forward.
The current struggles are in the concept of combining the
sector and style models in stock selection.
Today, the choice of AFL fits the bill.
It is both a financial services company and a large value stock. If it works, then the full model MAY have better
performance going forward. But I’ll
remain skeptical until small caps function correctly.
Time will tell.
As for the broad market – large value turns out to have a
better historical correlation than I originally suspected. During Large Value selections the S&P has
historically advanced at a 20% annualized rate.
That bodes well for a rally here.
Time will tell.
Yes – I just said that twice. Ultimately time shows us whether our theories
were correct or not. Those who ignore
those lessons will be more and more convinced they are “right” while their
retirement accounts go nowhere.
Theories are places to start – not places to stop.
The current sector and style matrix calls for Large Value
Financials: the money is in, well, money.
Large Value
|
Mid Value
|
Small Value
|
Large Blend
|
Small Growth
|
Mid Blend
|
Large Growth
|
Mid Growth
|
Small Blend
|
|
Finance
|
1
|
2
|
3
|
4
|
5
|
6
|
9
|
22
|
43
|
Industrial
|
7
|
10
|
12
|
14
|
20
|
23
|
33
|
51
|
68
|
Utilities
|
8
|
11
|
13
|
15
|
21
|
24
|
35
|
53
|
69
|
Energy
|
16
|
17
|
18
|
19
|
26
|
29
|
40
|
61
|
72
|
Staples
|
25
|
27
|
30
|
31
|
42
|
48
|
57
|
70
|
76
|
Cyclicals
|
28
|
32
|
34
|
36
|
49
|
50
|
63
|
71
|
77
|
Healthcare
|
37
|
39
|
44
|
46
|
55
|
60
|
65
|
74
|
79
|
Materials
|
38
|
41
|
45
|
47
|
56
|
62
|
66
|
75
|
80
|
Technology
|
52
|
54
|
58
|
59
|
64
|
67
|
73
|
78
|
81
|
Tim
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