Thomas Roddy @ThomasRoddy: "📊 PORTFOLIO REBALANCE Took longer..."

France

📊 PORTFOLIO REBALANCE Took longer than planned but the changes are in. Here's what happened and why.Seven exits, eight trims, nine new positions added. The portfolio is now 30 positions weighted using an Equal Risk Contribution framework , each position sized so that it contributes the same amount to total portfolio risk. In practice that means lower volatility names carry more weight and higher volatility names are kept smaller. What came out CVX, MFC, NWG, KDP and MFG are all gone. Nothing dramatic, they'd drifted below the quality threshold I use to screen positions. NWG had been underwater and the thesis had run its course. MFG had been one of the best performers in the portfolio but at 67% up it had run well past fair value on any reasonable measure. KDP and MFC both had fundamental grade deterioration that I wasn't willing to ignore. CVX is a fine company but the valuation was stretched and I wanted to redeploy into something with more runway. On top of that I trimmed MU, O, CFFN, FCX, NTCT, PRDO and JAZZ. MU has been extraordinary, up over 120%! But that run has stalled and the position had grown to nearly 7% of the book. That's too much concentration for a single high-volatility semiconductor name in a risk-parity framework. JAZZ was at RSI 75 which is as good an exit signal as any. Two positions I deliberately didn't trim, RELY and FRO. Both are in strong momentum right now. RELY was up 42% last month. FRO is up 75% YTD and the Hormuz situation hasn't changed. Selling either of those mid-run purely for rebalancing reasons would be poor process. I'll trim them when the momentum breaks. What came in UNFI, CAH, PBR, SBS, WF, OMC, NEM, ZTO, ASAIY. CAH is the most interesting entry. Cardinal Health sold off 7% on earnings day at the end of April on a revenue miss. The underlying business is fine, guidance was raised, the dividend was increased for the 31st consecutive year and the stock was at RSI 29 when I bought. That's the kind of entry I look for. PBR and SBS are both Brazilian. Petrobras and Sabesp. Negative beta on PBR, A valuation, up 84% YTD and it still screens well. SBS fills the Utilities gap which was completely absent from the portfolio before. UNFI is A+ valuation, food distribution, and one of the cleanest low-correlation names in the watchlist. WF is a Korean bank ADR replacing the three European bank positions that came out, better valuation than any of them. OMC fills Communication Services, also absent before. NEM diversifies the Materials sleeve alongside FCX , gold and copper don't cycle together which is the point. The macro view hasn't changed Still positioning for ongoing conflict in the Gulf and potential escalation. The Strait of Hormuz situation is not resolving and markets are still not fully pricing the duration. FRO and PBR are both direct expressions of that thesis. The portfolio is built around that view staying intact. Questions welcome as always! $SPX500 $NSDQ100 $VEU (Vanguard FTSE All-World ex-US)

Not investment advice. The author may have financial interests in the mentioned instruments.

3 Mentioned

SPX500

SPX500 Index (Non Expiry)

NSDQ100

NASDAQ100 Index (Non Expiry)

VEU

Vanguard FTSE All-World ex-US

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