HTO portfolio, April Report
It's hard to complain about any month in which you are up almost 5% but my High Turnover Portfolio did lose to the index this month, +4.86% to +5.22%. Actually I only had three bad days, but they were really bad: between the 3rd, 15th and 26th I got beat by 3.28%! A number of stocks sank rapidly after earnings reports, especially Safeway. Last month I beat the index +6.32% to +3.40% so we're still doing well two months into this new "experiment" (the HTO represents a tweak, hopefully an improvement, to my old methodology).
Any method has losing days, weeks, months and years. Joel Greenblatt points out that the reason people don't stick with his Magic Formula over time is because they abandon it in losing years, even though it consistently wins over the long run. Most investors abandon their system when it has a bad year. If the system is good, a bad year means the next year or two are likely to see a rebound. Anyway, like I said, if I can be 11% up over any two month period, who cares if I beat the market or not? Keep it coming! (I wish).
Last week I sold UBSH, SYMC and OTTR and bought IBCP (bad move so far) and JAH.
This week I sold ARII and HSNGY and bought APO, PULB and CRPJY. I also moved CLMT from my HTO portfolio to my LTO portfolio (the only difference is the sell rules I use, I sell HTO stocks when they are downgraded to "hold" by my system but hold LTO stocks until they become "sells"). CRPJY is a new experience for me, it is so thinly traded that for most of the day today, my purchase was the only trade of the stock all day.
In spite of IBCP, regional banks have been really really good for me this year so I was only a little hesitant to add PULB this week- it was my highest scoring stock. I'm holding onto SWY for now, I think it is being oversold, but if I was buying today I would buy KR over SWY.
In other news of interest, my index is a weighted average (according to how many foreign stocks I hold) of VT and VTI. In the second half of the month VT beat VTI, a reversal of the previous several months.
As for what the market will do next, I have no idea. I do know that in spite of what you may be reading, sell in May and go away is not a historically smart strategy in the first year of a presidential term. If you want to play the odds, get out of stocks (or trim back) from just after Labor Day until just before the end of October this year.