Q1 2025

Written By Andrei Sota

February 21, 2025

It's been a HECTIC week at our office -- between getting a new server in production, adding a new data supplier (plus resolving issues with 2 others) AND launching a new feature on the website... yours truly is feeling a bit drained.

Nevertheless, I've had the pleasure to get a bit of hands on time with our Portfolio Rebalancing feature, and used it in conjunction with an Options Analysis Watchlist in order to generate the trade list for this evening.

We're seeing more and more evidence of a market rotation in the works, and it's time to make some small but surprisingly impactful tweaks! The overall vibe is a reduction in exposure to aggressive Growth in favor of more stable securities.

We will execute the following orders at today's market close in the Sigma Portfolio:

  • SELL: FTNT - Reduce Position by 3.14%

  • SELL: NVDA - Reduce Position by 1.45%

  • BUY: MA - Add 1% to Position

  • SELL: APP - Reduce Position by 2%

  • BUY: FICO - Initiate 4.5% Position

  • BUY: ALSN - Add 1.2% to Position

  • SELL: VST - Close Position

  • SELL: GDX - Reduce Position by 3.5%

You can view the Sigma Portfolio Tracker here.
Historical performance and journal can be consulted here.

February 6, 2025

The rally in the bond market was correctly detected by Enterprise at the start of the week. We are following up in the Sigma Portfolio as well, with today's trade.

We will execute the following order at today's market close in the Sigma Portfolio:

  • BUY 8% TLT (Add 8% to Position)

You can view the Sigma Portfolio Tracker here.
Historical performance and journal can be consulted here.

Full analysis to follow.

January 24, 2025

After playing a bit of defense during the past week, it’s time to get more constructive on risk exposure and make a couple of adjustments. As we’ve mentioned, now is a good opportunity for cleaning up the laggards of the portfolio.

One of the worst offenders in our allocation has been AMD, which lost us around -18% in 157 days (Realized CAGR of -34%). We’ll replace it with a (larger) position in Qualcomm (QCOM) — which is basically the same investment idea, but with far better technicals.

We will also be strategically increasing position sizes in FTNT, VST and FTDR, which have promising potential to their Price Targets. Also, we’ve reviewed technicals for MPLX, NFLX and RL, raising both Price Targets and Stop Levels.

All of the changes are reflected in the new Sigma Portfolio tracker available in our new app here.

Here are the orders for tomorrow's close:

  • SELL 100% AMD (Close Position)

  • BUY 5% QCOM (Initiate 5% Position)

  • BUY 2% VST (Add 2% to Position)

  • BUY 1% FTNT (Add 1% to Position)

  • BUY 1% FTDR (Add 1% to Position)

January 16, 2025

Our analysis this week dictates that excess risk-taking is not optimal at this juncture. For an investor that is not allocated to risk assets at all, buying makes sense, of course. But in our case, we own about 75% stocks versus a target of 60% - so this translates to an overweight positioning. We need to use the post-CPI “relief rally” to move closer to our target this week.

Furthermore, it appears that Millennium Alpha is favoring a well-diversified approach. Given that several well diversified factors are outperforming — Mid-Caps (MDY), Equally Weighted S&P500 (RSP) for example — we agree with this positioning. As such, we’ll be reducing both general exposure by raising cash and rebalance to a less concentrated sectors / factors exposure.

Here are the orders for today’s close:

  • SELL 100% LLY (Close Position)

  • SELL 100% MSI (Close Position)

  • SELL 100% FICO (Close Position)

  • SELL 100% UTHR (Close Position)

  • SELL 100% CDNS (Close Position)

  • SELL 2.5% META (Rebalance to 5% weight)

  • BUY 5% HALO (Initiate 5% Position)

  • BUY 5% RL (Initiate 5% Position)

  • BUY 5% MPLX (Initiate 5% Position)

  • BUY 5% DBC (Initiate 5% Position)

January 08 2025

We need to do some cleaning up in our portfolio by sticking to the rules that have kept us out of trouble in all of these years (the Sigma Portfolio is older than suggested on this website). First of all we’ll get rid of some laggards, then decide on additions.

Overall, the vibe is not negative enough to elicit outright selling and exposure reduction on our part. This still looks like a buy-the-dip opportunity. However, it’s not a “bet the ranch” kind of opportunity, but rather a “if the portfolio is below target allocation, buying now makes sense” kind of deal.

As our allocation target for equities is 60%, we are already above target to begin with. Notably, our Enterprise strategy has increased exposure this week, leading to us also looking to increase exposure opportunistically. However, we will do this in a more “constrained” manner, and not take on excess levels of risk.

To sum up, here are the orders for the next market close:

  • SELL 100% of IESC (Close Position)

  • SELL 100% of CL (Close Position)

  • SELL 100% of RF (Close Position)

  • BUY 5% MA (Initiate a 5% Position)

  • BUY 5% BK (Initiate a 5% Position)

  • SELL 2% of GLD (Reduce Position by 2%)

  • BUY 2% GDX (Increase Position by 2%)

  • SELL 3% of AMD (Reduce Position by 3%)

  • BUY 2% FTNT (Increase Position by 2%)

  • SELL 7% of TLT (Reduce Position by 7%)

  • BUY 2% FICO (Increase Position by 2%)

Andrei Sota
Next

Q4 2024