Top Names, 9/19/2024

Continuing our core strategy while 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%-20% 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 March 14th, 2024.

We ran into a weak patch of performance in February of this year, which appears to have extended into March. Our top names from March 14th were up, on average, 1.38%, over the next six months, versus up 9.49% for the SPDR S&P 500 Trust (SPY 0.00%↑).

So far, we have 6-month returns for 64 weekly top names cohorts since we started this Substack at the end of December, 2022.

And as you can see above, our top names have averaged returns of 19.65% over the next six months, versus SPY’s average of 12.62%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.

If You Are Concerned About Downside Risk

As a reminder, you can download our iPhone hedging app by clicking on the image below.

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 9/19/2024.

It’s interesting to see Peloton (PTON 0.00%↑) make our top ten tonight, after we placed a bullish bet on it last Friday.

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 of 10% to 20% on each of them. As you get stopped out of positions, you’ll add new ones from the then-current top ten names.

In my case, I am already running this strategy, and didn’t get stopped out of any positions since last week, so I won’t be buying any of these names on Friday. I may place an options trade on one though.

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%↑).