STRATEGY: Granny Shots re-balance. +5 stocks. -6 delete. 23 stocks in total. YTD outperformance +2,470bp
We are re-balancing our “Granny Shots” portfolio for 3Q2020. This rebalance is adding 5 stocks and deleting 6 names, leading to a net decline -1. There are now 23 stocks in the Granny Shots portfolio.
– In case you are wondering why we call this Granny Shots, it is named after NBA legend Rick Barry and refers to his unorthodox “free throw” method
– He had one of the highest free throw percentages, and our Granny Shots picks the stocks from 6 portfolios — getting the “best of the best”
– So this is why we call this our “Granny Shots”
The re-balance for 3Q2020 is summarized below. We calculate the quarterly return for Granny Shots as if the portfolio was “equal weighted” at the start of the quarter. But as tireless Ken has calculated, if we let “winners ride,” the 2,470bp YTD outperformance of Granny would be even greater.
– Additions: KLAC, OMC, GWW, INTC, QCOM
– Deletions: BKNG, EMR, HPQ, BWA, CF, PG
Take a look at Point #3 for a fuller discussion.
We continue to view our Granny Shots as a way to construct a core portfolio. These are stocks which fall within our 3 thematic portfolios and 3 tactical portfolios. We will provide a full breakout of these portfolios later this week.
– Performance YTD is 34.1% compared to 9.4% for S&P 500
– Granny Shots has seen two tough months — March and September
– Not surprisingly, these were bad months for equities in general
It is probably helpful to see how often each of the stocks appears within each portfolio — thus, the more that appear, the greater the “attractiveness”
– 4 stocks appear 4 times –> GOOG, AAPL, CSCO and XLNX
– Consider these the names with the best margin of safety.
Below are the latest 23 Granny Shot stock ideas (*)
