Archive Category: Infinite Momentum Alert Archive

First off, a quick interim update on the performance of our portfolios, now at the midway point of our four-week holding period… The “All Markets” portfolio is up about 1%, and the “Tech Titans” portfolio has gained about 2%. Meanwhile, the blended average of the four passive benchmarks we track is down about 0.25%.

Well, we have another four-week holding period under our belts… The past month was relatively uneventful, outside of the merger between ANSYS, Inc. (ANSS) and Synopsys Inc. (SNPS). I’ll cover how that corporate action affected the ANSS position we held through it, and otherwise keep today’s performance review short and sweet — “sweet,” it is, as you’ll see below…

With a name like Infinite Momentum Alert, one might assume (at least at first) that our strategy focuses exclusively on … well, momentum. With investing, momentum is defined as the tendency for strong stocks to remain strong for some time. “An object in motion tends to stay in motion,” to paraphrase Isaac Newton. Momentum seems pretty obvious at first — but momentum-based strategies are often maligned and misunderstood as “only caring about price action,” while giving little regard to the fundamentals of the company underlying the shares.

I’ve written many times about what we should expect from a concentrated, systematic portfolio … “different” results, relative to a passive equity benchmark. Of course, “different” can go both ways – for you or against you. In practice, we never know whether we’ll beat the benchmark on any given week or month. But over time, we expect the edge we have in our strategy to reveal itself and allow us to outperform a buy-and-hold approach.

Happy Independence Day, and Happy Birthday, America! Since today is a very special holiday and I’m currently on vacation with the family, I’ll keep this week’s update brief… Our Infinite Momentum Alert model portfolio is doing well following last week’s rotation.