Top Names, 5/23/2024

Continuing our core strategy and updating our performance.

Our Core Strategy

Our core strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of 10%-15% on them, and replace them with names from the current week’s top ten when we get stopped out of a position.

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from November 22nd, 2023.

Over the next six months, our top ten names from November 22nd were down 3.19%, on average, versus up 16.91% for the SPDR S&P 500 Trust (SPY 0.00%↑).

That was the first weekly top names cohort of ours to underperform the market in 17 weeks. Below is how all of our weekly top names cohorts have done since we started this Substack.

You can click here to see an interactive version of that table, where you can click on a date and see what are top names were then and how each of them did.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

Screen capture via Portfolio Armor on 5/23/2024

If you’re starting our core strategy now, you’ll want to buy equal dollar amounts of each at or near these prices, if possible, on Friday, and then enter trailing stops on each of them. Initially, I was using 10% trailing stops on all positions, but I extended that to 15% to 20%. As you get stopped out of positions, you’ll add new ones from the current top ten names then.

In my case, I am already running this strategy, and didn’t get stopped out of any positions this week, so I’m not planning on a position tomorrow (though I may place an options trades on one of these; if I do, I will of course post a trade alert about it).

If you’re not buying round lots of each of these positions, it won’t be cost effective to hedge them individually, but you can hedge market risk by buying optimal puts on an index ETF such as the SPDR S&P 500 Trust (SPY 0.33%↑). As a reminder, you can use our website to scan for optimal puts (our iPhone app is currently closed to new users).

Alternatively, holding some of our bearish bets can work as a hedge against market risk too.