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Stock Portfolio Updates: Defensive Positions Regain Favor
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By:
Christopher Mistal
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October 29, 2020
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Over the last seven weeks through yesterday’s close, S&P 500 fell 3.8% while Russell 2000 climbed 1.1%. During the same time period the entire portfolio climbed a modest 0.4% higher excluding dividends and any trading fees. Our Large-cap stocks were responsible for the majority of the overall advance, gaining 1.2%. Our four small-cap positions also contributed to the gain, advancing 0.3%. The two mid-cap positions were mixed, one up and the other down.
Overall performance was held in check by a sizable cash balance. That balance did provide a nice cushion against declines in September and again earlier this week. When our Seasonal MACD Buy signal triggers, we do anticipate putting cash to back to work with a new basket of stocks. We will also hold sufficient cash to ensure our Free Lunch stocks (emailed prior to the open on December 21) can also be included in the portfolio later this year.
Because the overall portfolio had a defensive bias, only one position was stopped out since last update. TOTAL S.A. (TOT) was closed out of the portfolio on September 23 after it closed below its stop loss on the previous day. TOT was a speculative trade on crude oil price recovery. That recovery has yet to materialize and it may be quite some time before it does. Covid-19 cases are on the rise again and restrictions are being implemented again in many regions/countries around the globe.
AT&T (T) is the worst performing position held, down 12.6% since addition excluding dividends. 5G rollout is likely to be costly, but once availability begins to truly widen, prospects are likely to improve. The idea of a single provider for internet, cell and streaming content seems appealing. At the least 5G service could put real pressure on traditional internet service providers.
All positions in the portfolio are on Hold. Please see table below for specific buy limits, stop losses and current advice.