First Quarter results for the Zen Ten
The portfolio is up 0.4% in 2018 while the S&P is down -1.2%.
The portfolio is equal-weighted, and it’s ahead of the benchmark ETF EQAL by 2.5%.
The worst performer is GE. I put it on my list too soon, but I still think it will recover later this year and post a gain.
A wild card for GE is the prospect of a takeover, or maybe an investment by Buffett or Icahn. That would certainly help the stock get back to my original cost. But this is pure speculation on my part.
The other clunker on my list is Sinclair Broadcasting. When I chose it for inclusion (after it passed my regular screens), my thesis was that they would be successful by tilting their editorial policy to the right. Trumpism is still very popular, but perhaps Sinclair climbed on board of the train a little too late.
The two stocks that are keeping the list in the winning column are NVIDIA and FireEye. They serve a common marketplace - cybersecurity. I believe this market will continue to expand, and that these two companies will benefit.
About the Zen Ten
The Zen Ten outperforms the market by an average of 12.4% per year. This annual list of my top picks for the following year has outperformed the market 8 out of the last 10 years.
I use a screening algorithm to give me a list of about 20 names that meet my criteria. From there, I weed out the stems and seeds that sneeked through the screens, and I end up with my final ten.
The table below shows the performance for each of the 10 years I’ve been publishing my Top Ten picks.
Final thoughts
Let’s end on a positive note. In spite of last quarter’s poor showing, we are far away from any indications that a bear market may be forming.
The dip-buyers have been challenged. Will their rose-colored glasses continue to work their magic? Will they step in, once again, and save the bull? Sooner or later (maybe this summer?) the dip buyers will be fully invested. When that happens, who will be left to buy the dips? Think about it. It happens at the end of every bull run.
Erik Conley
Disclaimer: All information in this article is based on sources believed to be reliable. The Zen Ten Portfolio is a model portfolio presented in newsletter format. Nothing in this newsletter is personal financial advice. Always do your own research before buying or selling any security.
Howard, I’m also curious. How do you know when the bear comes? It’s not an idle question. I have a methodology for this, do you?
Thank you, Lou.
Just curious: How does your top 10 each year compare to SSO. SSO is 2x S&P 500. When the bear comes just switch to SDS 2X S&P 500 short. Easy to use very good returns without individual stock risk .
How do you feel about this strategy. Has worked very well for me.
Howard Randall
Good job, and good record. Thanks for sharing.