Sorry for the lack of posts lately, I came down with a throat/chest and ear infection combo deal that had me bed-ridden for days. Luckily it subsided with some antibiotics right before Christmas day.
I’ve been spending a lot of time reading about active portfolio management. I’ve got three books on the go and one in particular that I’ve found quite interesting is “The Ivy Portfolio” by Meb Faber that talks about Ivy league endowments, and most specifically the Harvard and Yale endowments. Further to that, I’ve also spent time reading some research journals on momentum and 13F Cloning which are all quite interesting ways to obtain additional alpha.
13F cloning is basically taking the top 10 holdings of a hedge fund etc. These funds (over 100M) must report their holdings every 45 days. Since most aren’t actively traded, you can gain by copying their holdings and you don’t have to pay the 2 and 20 fees they usually have. Research shows that because you save on the fees and though its 45 days late, you can still generate around the same return. I’ve got a list of fantastic funds to follow, and thus I am interested in creating a fund of funds using the top 10 holdings of the very best funds like Baupost (Klarman), Appaloosa (Tepper) etc.
What makes me excited is our little insurance tool that we use in the Anchor strategy. This protects us in crashes (well really any market downturn). We usually only use a basic ETF like SPY or RSP but with the case of 13F cloning, mechanical investments and other methods of creating alpha that I am looking at, we can combine this insurance method and create more return with absolute protection in any major correction. That has me very very excited.
I am gearing up to setup a nicely diversified active trading and portfolio combination for Dec 31st/Jan 1st. I am excited about it. It should be a great 2015. Well diversified.
And for the first time on the blog, I’ll be finally doing some traveling! We’ve booked a cruise on Jan 3 till Jan 14 around the Med. We’ve done most of the stops before but it was cheap and we’ve got our Au Pair. So it should be awesome. I haven’t had a vacation in years where I wasn’t actively managing stressful trades. I am quite looking forward to it and doing a lot more heavy reading/research.
Expect daily updates from here on in!