Every once in awhile, a mechanical system does what the muzzled discretionary has secretly been hoping for all along. In this case, I got my wish and Portfolio A1 has dropped NTY and replaced it with WCG, the portfolio’s first foray into health care, a sector that has been performing exceptionally well as of late, as reflected in the XLV ETF, among other barometers.
NTY has been the one laggard in this portfolio, despite the recent run-up associated with possible buyout rumors. Generally, the discretionary trader in me looks to sell long positions on buyout rumors, but in this case Portfolio A1’s stock ranking algorithm dropped NTY due to poor performance relative to the other holdings and to WCG. A close look at the WCG chart shows that the stock’s price action strongly resembles that of a airplane taking off, as the stock as steadily gained altitude in the course of tripling from November 2005 to the present.
Apart from dropping NTY and adding WCG, there are no changes to the portfolio for the coming week.
A snapshot of the portfolio, which now has a solid 5% advantage over the benchmark S&P 500 index, is as follows:
(In other portfolio news, I have slipped to #3846 in the CNBC Million Dollar Portfolio Challenge. This is still in the top 1%, but below my ranking from last Wednesday and still some $700,000 out of the top 20. The good news is that earnings season is beginning this coming week – and with it some opportunities to take some big chances and make some big moves. Hey, if Zach Johnson can win the Masters, anything is possible!)