Value Funds comparable to COVID90 portfolio

I’ve received questions from readers that either can’t or don’t want to purchase individual stocks, but would like to mimic the COVID90 portfolio with an ETF/Mutual fund.

If you have access to a wide array of funds, then you could cobble together a half dozen sector specific indexes that target the industries that haven’t yet fully recovered from COVID.  To name a few:

  • Energy (XLE)
  • Finance (KBE)
  • Leisure & Entertainment (PEJ)
  • Airlines (JETS) or Aerospace (ITA)

The simplest route would be to purchase a couple broad based Value funds like Vanguard’s Value Index (VTV) or their Small Cap Value Index (VBR).  The potential gains won’t be as extreme with the broader based indexes, but that’s because they’re less volatile.  The below chart indicates that the Small Cap Value upside for a return to pre-COVID normality is about 13%.   

Bottom line is that Value (in any sector) has underperformed the general Market and is forming a multi-year “hook & barb” chart pattern…which presents the setup for a potential bullish breakout.

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COVID90: final purchases

Today I purchased the remaining 19 stocks to round out the COVID90 portfolio.

I’ve received questions as to the timing of my decision to jump back into the market.  As previously stated, I’ve been waiting for a COVID 2nd Wave panic to present a buying opportunity.  While that still may occur, at this point, I think the election timetable will have more of an impact on the market than a resurgence of COVID.  Not that it necessarily matters whether it’s Tweetle Dumb or Tweetle Dee, but just the CERTAINTY of knowing which Pinocchio will be occupying the Oval Office.  As such, with the election just around the corner, time is running out.

BUT…the COVID90 portfolio is based on much more than just timing the election.  Please note the below chart, which represents the average price action of the cumulative COVID90 stocks year-to-date.  The portfolio generally mimicked the market during the COVID collapse in March and then recovering through the early June peak. 

But that’s where the correlation ends.  The market recovered in August and went on to set a new record high in early September.  COVID90 has been staggering since the failed breakout in June.  Perhaps because of a resurgence in COVID infections as the economy began to re-open.  This is a primary reason that I’ve been anticipating a COVID 2nd Wave downturn. 

HOWEVER, note that the September 24th trough never dropped as low as the May 13th bottom.  Also, the yield on the 10 Year Treasury generally followed this trajectory, putting in an absolute COVID panic bottom on August 3rd.  Since that bottom, the yield has risen nearly 42% and is above both its 50 & 100 day moving average.

The price action of the COVID90 stocks is the primary factor that has influence my decision to buy in at this time. 

Today’s purchases included:

BAX        Baxter

CSCO     Cisco

EIX          Edison

ETR         Entergy

FEYE       FireEye

INTC      Intel

ITRI        Itron

LDOS     Leidos

LHX        L3Harris Tech

LYFT       Lyft, Inc.

MEI        Methode Electronics

NGVT    Ingevity

NTAP     NetApp

SAFM    Sanderson Farms

SLQT      SelectQuote

TAP        Molson Coors

UA          Under Armour

WAB      Wabtec

XOM      Exxon

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COVID90: 22 more stocks

Just a quick note- today I added an additional 22 stocks to the COVID90 portfolio:

BDX        Becton Dickinson

CDLX      Cardlytics

COHR    Coherent

EB           Eventbrite

ENB        Enbridge

FISV       Fiserv

GSKY     GreenSky

HRC        Hill-Rom

MGNI    Magnite

NEU       NewMarket

PFPT      Proofpoint

PLAB      Photronics

PS           Pluralsight

PSN        Parsons

QMCO  Quantum

SWM     Schweitzer-Mauduit

THS        TreeHouse Foods

TRVG     Trivago

VPG       Vishay

WDC      Western Digital Corp

WRTC    Wrap Tech

YELP       Yelp

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COVID90 initial buy

I’ve been anticipating a Market panic over the COVID 2nd Wave, and assumed that it would precede the election.  It doesn’t look like that’s going to happen. 

I also believe that regardless of the election outcome, Markets will do well because 2021’s astrological forecast is for waning COVID and waxing Stimulus…regardless of who might be President.

There are 90 stocks that I believe present value and should fully recover once COVID fears diminish.  I’ve dubbed them the COVID90. 

Today I purchased these initial 49 positions:

AMRS    Amyris, Inc.

B             Barnes Group

BCO       Brink’s

BDC        Belden

BHC        Bausch Health

C             Citigroup

CARG    CarGurus

CCOI      Cogent

CR           Crane

CRS        Carpenter Tech

CVX        Chevron

CW         Curtiss-Wright

DAKT     Daktronics

DCI         Donaldson

EBIX       Ebix

FLS         Flowserve

FOX        Fox

GD          General Dynamics

GE          General Electric

GRA       W. R. Grace

HAE        Haemonetics

HGV       Hilton Grand Vacations

HLT         Hilton Worldwide

HST        Host Hotels & Resorts

HWM    Howmet Aerospace

HY           Hyster-Yale

INGN     Inogen

IOSP      Innospec

ITGR      Integer


JPM       JPMorgan

KMI        Kinder Morgan

MAR      Marriott

NVST     Envista Holdings

PFGC     Performance Food Group

RL           Ralph Lauren

RTX        Raytheon Tech

RXT        Rackspace

SBNY     Signature Bank

SIX          Six Flags

SNN       Smith & Nephew

SSYS       Stratasys

TDG       TransDigm

TNC        Tennant

TRIP       TripAdvisor

TSE         Trinseo

VLO        Valero

WELL     Welltower


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Market rally fails again…is it going lower?

The S&P 500 is barely holding above a technical correction and it has failed multiple times at the 50 day moving average.   The rotation rally looks like it has fizzled. 

Today was characterized by indiscriminate selling.  Everything was down- Tech, Value, Precious Metals, Bitcoin…everything.

I think the market is headed lower…but I’ve thought that all summer, and have been wrong.

You can hear my latest thoughts at today’s episode of the Wealthsteading Podcast, it’s a quick listen at less than five minutes:

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