Every three months, we fill out our four portfolios with 10 equal-weighted and leading stocks, mostly in leading industries. We combine fundamental research and technical analysis to make our money work harder, which is the whole idea. We know there's a strong correlation between earnings growth rates and stock performance, and we also know that institutions favor leading companies in leading industries. We simply try to construct our portfolios, as best we can, to outperform the benchmark S&P 500. That's our goal and we've been successful at doing that so far. Our quarters aren't calendar quarters. Instead, they run as follows:
- February 19th - May 19th
- May 19th - August 19th
- August 19th - November 19th
- November 19th - February 19th
It's hard to believe, but August 19th is now less than three weeks away. We will be replacing our portfolio stocks very, very shortly. But, in the meantime, we're going to continue to enjoy our quarter-to-date outperformance for another 3 weeks - hopefully! Since May 19th and through the close on Friday, July 31st (quarter-to-date), this is how our portfolios have stacked up against the S&P 500:
- Model Portfolio: +30.11%
- Strong AD Portfolio: +17.93%
- Aggressive Portfolio: +16.64%
- Income Portfolio: +8.55%
- S&P 500: +11.91%
Our flagship Model Portfolio is now +118.47% since November 19, 2018, while the S&P 500 has risen 21.57% during that same period. The results have truly been outstanding. The secret sauce is the combination of earnings growth and relative strength. Here are the 10 stocks (ticker symbols) that are currently included in our Model Portfolio:
AAPL, ZM, CDNS, ZYXI, ATVI, CMG, REGN, SHOP, MTSI, TSLA
Those have been great stocks to hold this quarter. In less than three weeks, a new list of 10 stocks will comprise each of our portfolios. We'll no doubt have several of these stocks returning as many of the stocks listed above remain leaders and have blown past Wall Street consensus estimates. Unless something drastic occurs between now and August 19th, these two almost certainly will remain:
AAPL:
TSLA:
Technically, these relative strength panels say it all. Both companies are outperforming their industry peers by a very wide margin. Owning stocks like these is exactly how the Model Portfolio outperforms the benchmark S&P 500. While everyone tries to time bottoms in airlines, whose bottom looks more like a colander to me, at EarningsBeats.com we want to own the best-performing stocks, the leaders. At some point, they won't lead any longer and we'll find others that are.
As humans, we tend to make investing so much harder than it actually is.... or should be. Break everything down into very simple terms. Stronger-than-expected earnings and relative strength is a powerful combination and I believe we're demonstrating that in real time to our EarningsBeats.com members.
In just a few short weeks, we'll be announcing our next list of portfolio stocks for the next three months. We also have a FREE Sneak Preview event coming up on August 10th. Please don't miss out. For more information and to make sure you're included, CLICK HERE for more details.
Happy trading!
Tom
