Our stock portfolio initiates long only positions and seek to outperform the S&P 500 by identifying macro economic trends that provide the backdrop for major bull market advances. We then seek industries or sectors positioned to benefit from these economic trends. Finally, we identify leading companies within these industries and sectors that should see significant price appreciation. To better time our entries we utilize a unique combination of price patterns, technical analysis, and investor sentiment. We attempt to buy good companies that we feel are trading at a deep discount to their true value.

The maximum number of companies we recommend you hold at any given time is 25 with up to 4% of assets allocated toward equities in each position. Statistics show that owning at least 20 stocks eliminates 95% of non-systemic risk (individual company risk) and that owning 5000 stocks does not diversify away system risk (market risk). The only way to diversify market risk is to own several asset classes, such as equities, real estate, bonds, precious metals, commodities, etc.

Owning 25 positions allows you to properly diversifies and reduces risk yet gives your portfolio enough concentration to significantly outperform the S&P 500. We also seek absolute return, not just outperforming the S&P 500. Much like a hedge fund we hope to achieve positive returns in both good and bad economic conditions. To do this we may buy an inverse ETF that increases in value as the market falls, buy commodity related companies that may rise as overall equities are falling, invest in economies outside the US, or hold a lager than normal cash position during significant market corrections.