The Sharpe Report: Dan’s Portfolio – More on the “Core” Positions

Posted on Jan 6 2015 - 4:03pm by Sharpe Trade

Dan’s first Sharpe Report entry can be found here.

We are continuing the discussion from the last entry that can be found here.

Events could not be unfolding better for my portfolio of “The Sharpe Report” if I planned it out this way.  Heck, forget The Sharpe Report (no, not really Sharpe Trade guys) … but seriously, things could not be turning out better for myself if I had planned it out this way.

I have yet to make a move this year.  The S&P 500 Index is my benchmark.  And the S&P 500 Index is getting nailed hard.

Now yes … this is advantageous for The Sharpe Report, but you have to remember I manage other portfolios.  So no, I’m actually not as happy about the downturn because of what this means for my year to date numbers.  In other words, I’m not celebrating as I was yesterday, because from January 1, 2015, my 2015 numbers will look better.

Which they will.

I’m ecstatic because on the portfolio’s I have managed for years, I got rid of most of my long (bought)  positions.  So on those portfolios that I have been managing, I made a great move, at almost the perfect time.  And as we said, yes, this works out well for The Sharpe Report as well.  I am gaining a greater and greater advantage.

Imagine there is an ongoing race.

I’ve been in this race for a few years now.  Oh yeah … years … it’s a marathon.  

And my competitor in this race just laid down on the grass at the exact moment I grabbed a refreshingFatigued Runner drink of water from the bystanders and I put on a burst of speed.

But Dan, I haven’t been running this race for years, I just begun!



Because the competitor just laid down on the grass for a breather, that’s why!  

If you are just starting out in the markets, provided you apply sound, professional investing principles … you just began a footrace, and one of the ways we measure our own performance, again … just laid down on the grass.

So … we have an advantage.  So now what?  What about this Passive Core that I’ve been talking about?

We know that I would like to pick up some of the ETF (LQD).  But not at this point.


Because, I like to buy things when they are falling, not when they are rising.

At the moment, LQD is rising in price.  So I’ll put that on the back burner for now.  I’ll keep an eye on it, and look to buy it once it begins to fall.  That’s not now.  We know that.  I’ve said that for the last few Sharpe Report entries.  So, what will I be looking to buy besides LQD for The Sharpe Report‘s passive core?


That’s what!

Not right at the moment, because trying to catch stocks and buy stocks at the moment is akin to trying to catch a falling knife.

Sometimes you have to recognize when the smartest move is to do nothing, which is always an option ….  

This is almost the perfect time for someone to begin a portfolio.  Thus far in the year, they haven’t had to do much.

Now this next part is going to sound a bit contradictory, but you’ll see this play out moving forward throughout the history of this service.

I could care less … really … what the S&P 500 Index is doing.  I really don’t care.

And the current situation is why.   It ‘does’ what it ‘does’. I ‘do’ what I ‘do’. I use it as a benchmark, and that is all

So moving forward, saying all of that … I’ll say that I’m very interested in buying some IVV as an ETF for the “All-Weather” portion of the core.  Note … IVV is an ETF that tries to mimick, to a degree, the S&P 500 Index.  Folks could also use SPY if they wished.  That would work as well. Myself, under an “ETF Commission Free” program that I have signed up for with a few of my brokers, I get IVV commission free (check to see if this is available to you, you can get some ETF’s commission free with some brokers in these links if you sign up to their program and hold to conditions like, say, holding them for longer than 30 days).  

I’d even like to buy some specific stock names for the Core, outside of the “All-Weather” portion, that will run side-by-side LQD.  Again, not right now.  I’ll let those stock positions get cheaper.  As far as the weighting?  IVV would be 47% of the “All-Weather” portion, and then some valuation stocks outside of the “All-Weather” section, running the usual sized position of 13.3% of the Core itself.

But for right now, I’ll just wait for IVV to have some sort of bottoming process begin.  I could wait until $209.96 on IVV, and still have the advantage.

And I’m still within the process of looking for some good valuation stocks.

So remember, at this point, there are no orders, and the portfolio is still flat, with no positions  We’re just watching and waiting, and we know what we are at least looking at, and why.

Things are looking good folks.  I’m just waiting to see how this lines up.

(We continue the discussion in this next entry)

Disclosure:  I currently do not yet have any LQD positions in any portfolio that I manage, at the time of this writing, nor do I plan to implement an LQD position in any portfolio that I manage in the next 24 hours.  No immediate family members have any LQD positions in any portfolios that they manage, to my knowledge, at this time.  No businesses that I have a controlling interest in, has, to my knowledge, any positions in LQD at this time.   I currently DO have IVV positions in all portfolio’s that I manage as part of a core position, at the time of this writing.  At the time of this writing I do not plan to sell those IVV positions in the portfolio’s that I manage in the next 48 hours.

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