Saturday, March 7, 2020

m1 account stress test

it was a tough week in the broad markets. frankly, my big account is down on the week but this little m1 set-up i have came up smelling roses, here's the picture:
the safety pie i expected to be up. it is composed of non-stock etf's like TLT,IEI (bonds,) GLD, and GSG (commodity futures) - things that people rotate into in a risk-off environment. i cribbed this safety pie from ray dalio's all weather portfolio by selecting the non-stock selections. the surprise is the valueLine pie, which moved up 2.56% - who are those guys!? meanwhile buffet's portfolio (which i am scaling into) got spanked for 1% (no biggy and does not change my mind.) i plan to keep this winter-mode allocation (70% stock, 30% safety) throughout march to get some good dca'ing on the low-down. then in april i plan to change-up into a summer-mode by upping the allocation to safety to 70% but let the weekly contributions slowly move me there. when the account is a little larger that won't work so i will either have to use the rebalance button or up the weekly contributions. in any case, here is the share link for my portfolio if you like what you see - that doubles as an affiliate referral link so m1 will throw you (and me) a bone, typically $10, if you use it to fund a new account.

Saturday, February 15, 2020

i noticed something weird about warren buffet's portfolio ...

previously, when i was constructing the berkshire pie, i noticed that warren devotes a goodly portion to very low weighted stock picks. i recently redid this according to the 12/31/2019 13f and after rounding the weightings of everything that could be rounded to at least 1% I have:
so there's 4% of stuff that each have less than .5% weighting in warren's portfolio but these represent 28 of 52 holdings. so the question is what are these smaller holdings and if buffet is buying them maybe they are some picks that you might want to allocate more to. So here's the lower berkshire pie:


NOTE: PERFORMANCE SHOWN IS ONLY SINCE JAN 26, 2020 (FOR SOME REASON M1 NOT SHOWING FULL 1 YEAR RESULT.) this is 3 weeks of performance which if annualized by multiplying by 52/3 is something like 50% return but your mileage may vary!

curiously amzn is one of the lower berk's and is the closest to graduating to the upper berk's. in any case, i have adjusted the weightings to be as close to berkshire's that i can match but theyr'e not exact. AMZN and SIRI got the highest at 8% of lower berkshire while anything under .7% in warren's portfolio is 1% of lower berkshire.

if you want the full berkshire treatment one can combine the upper and lower berkshire pies for the full berkshire effect:
NOTE: PERFORMANCE SHOWN IS ONLY SINCE JAN 26, 2020 (FOR SOME REASON M1 NOT SHOWING FULL 1 YEAR RESULT.) this is 3 weeks of performance, which, if annualized by multiplying by 52/3 is something like 32% return. your mileage may vary!

want to invest like a billionaire? with commission-free, fractional-share investing from m1 finance you can own warren's portfolio for as little as a $100 initial investment and add in increments as little as $10. use any of my pie links to fund a new m1 account and get a $10 reward.

Saturday, February 8, 2020

buy warren buffet's stock picks NOT his stock

i was playing around in m1 finance and created a pie with berkshire hathaway's largest stock holdings in approximately the same weighting as he has and i looked at how he did over the last year:
which was spectacularly good and beats the market performance of 22.8% over the same time frame. but then i wondered if should just buy mr. buffet's company (brk.b) and this is what i discovered:
that's a positive return but way underperforming the market. this is probably due to the fact that mr. buffet hordes cash, so the performance of his stock doesn't match his stock picks. if you want the performance of warren's stock picks buy his stock picks, not his stock.

with commission-free, fractional-share investing from m1 finance you can own warren's portfolio for as little as a $100 initial investment and add in increments as little as $10. use my pie link to fund a new m1 account and get a $10 reward. 

Saturday, February 1, 2020

my m1 portfolio beat the market in january

In January SPY was down a modest .0559% while my M1 Portfolio was up .84% but I think you'll want to know why. Here's the account picture:
The stock assets of this portfolio outperformed the S&P an insignificant tiny smidge but the nonstock 'Safety' assets really saved the month, so much so that this minority portion of the pie more than made up for the losses in the majority slice. This is hedging working at its best to save my, uh, assets. 

So what is in this wonderous 'Safety' pie? Have a gander:
Most of the gains came from treasury bonds (TLT, IEI) the traditional place to park money in a risk-off scenario also gold, GLD. The spanking that commodities (GSG) took, down 12.53% for the month, did not harm the overall performance of the Safety pie. The assets in this pie and the allocations come from the non-stock portions of Ray Dalio's All Weather Portfolio. Thank you Ray.

At this time I am leaving the overall allocations 70% stocks and 30% Safety assets alone. There has been a return to normal volatility last week but the trend is still intact and there's still a couple of months left to stock season. My guess is that the current worries about the new Wuhan Corona Virus and the impeachment trial will simply blow over without much consequence. 

If you want a portfolio like mine here is the share link.  Feel free to mix and match your stock portfolio with the Safety pie. Use that link to fund a new account and you will be rewarded  $10 (alas the Jan promotional rate of $20 has ended.) You can get started for as little as a $100 initial investment and add in increments as small as $10 and M1 will execute commission-free, fractional-share transactions to meet your allocation specifications - really a smalldog's bff. 

Saturday, January 25, 2020

i reset my m1 finance account, here's why ...

i had this great idea for my m1 account that worked less well than i had hoped. the idea was that i force my self to budget rent money by investing 1/20 of a rent payment each week-day in m1. then at the end of the month, just take the contributions, pay the rent and pocket the investment on the rent money. this is a great idea but unfortunately i ran into difficulties with a small account. what i didn't understand is that M1 is not a checking account. the glitch that i hit is that there is a 6 business-day holding period on contributions. this means the cycle time on a contribution/withdrawal is typically 8 days; 9 days if there's a long weekend involved. mind-you this is not an M1 policy but a federally mandated rule to foil money-laundering. this caused me to be late on a rent payment last fall. as a consequence, i took the balance of my account down to $28 on 23sep2019, which is why the account graph has some jaggies in it:


but the jaggies are not the same as investing returns that you can expect from following this same strategy, it's just an artifact of my fund flows. since the reset i have continued contributing $10/week to these two pies and i am very encouraged by the results. the value line model portfolio 1 has returned 19% since 20jun2019 when i originated the account 7 months ago. this is a money-weighted return, which, means the reported percentage is adjusted to account for fund flows - the same standard that professional money managers use. annualizing this return projects a full-year return of 32% on the value line pie. taking both safety and stocks into consideration, a 1 year projected return on the account anniversary is 18.49% (10.79% times 12/7.)

in october i modified the split between safety and stocks from 70% safety / 30% stocks to 30% safety / 70% stocks - there is a ton of statistics that say the best time to be in stocks is from november through april. after i made this risk-on change i just let new contributions gradually bring me up to the new target allocations. but, i could have just told m1 to execute trades to rebalance according to this risk-on split. better to miss out a little on early season gains then get spanked by an early season sell-off. i didn't reallocate then but i might do that in late spring when it is time to go into a risk-off mode - better to miss out on some late-season gains then get spanked by a late-season sell-off.

in any case a 3 month return in this risk-on configuration looks like this:

annualizing that 5.49% return gives a projected 1 year return of 22% - i'll take it!

if you want to take it too then here's the link to my account's shared pie. btw if you use that link to fund a new account by 31jan2020 then you will receive a $20 reward, or just click my affiliate link. i have a ton of other pie's i want to share in the near future, so stay tuned...