A Mixed Market, But Strong Portfolio Performance

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

It was a mixed week for global stock markets this past week, with the Dow Jones up 0.66%, the S&P 500 rising 0.83% and the NASDAQ jumping 2.19%. In contrast, the MCSI Emerging Markets Index ended the week 1.70% lower.

Big gainers in your Alpha Investor Letter portfolio included the Market Vectors Biotech ETF (BBH), gaining 5.77%; Icahn Enterprises, L.P. (IEP), jumping 3.54%; Guggenheim Spin-Off (CSD), up 3.27%; Google, Inc. (GOOG), adding 3.24%; and Visa Inc. (V), recovering 3.11%.

iShares S&P Global Timber & Forestry Index (WOOD) moved above its 50-day moving average and is now a BUY. Both WisdomTree Japan SmallCap Dividend (DFJ) and Vanguard Global ex-US Real Estate ETF (VNQI) fell below their 50-day moving averages and are now rated HOLD.

Yesterday, I gave the keynote speech in London at the United Kingdom’s leading “Smart Beta” conference. (You can download a copy of the presentation HERE.)

In my presentation, I defined “smart beta” investing as “non-traditional index based passive investing.”

Think of it like investing in an index fund — except the index isn’t, say the S&P 500, but some other kind of “non-traditional” index.

Although the term may not be familiar to you, several of your current Alpha Investor Letter positions count as “smart beta” investments.

Last month’s recommendation, the Global X Guru Index ETF (GURU), is a passive tracker of a non-traditional index, the Solactive Guru Holdings Index.

Each of your three “Buffett Beating” strategies: Guggenheim Spin-Off (CSD), PowerShares Buyback Achievers (PKW) and the First Trust US IPO Index (FPX) also follow a “non-traditional index.”

Of course, once you get beyond the mumbo jumbo, the primary attraction of these “smart beta” investments is that they are making you a lot of money.

Since I recommended these on July 11, the S&P 500 is up 8.43%. In comparison, the Guggenheim Spin-Off (CSD), PowerShares Buyback Achievers (PKW) and the First Trust US IPO Index (FPX) are up 18.12%, 12.19% and 14.28%, respectively. A portfolio of “smart beta” strategies in my American Alpha Investment Program is beating the S&P 500 by about 10% in 2013. That’s a massive outperformance by any measure.

One of the points I made to the developers of these products in private is that they need to change the name from “smart beta.” It’s pretty awkward and makes it really difficult to communicate what “smart beta” actually is. But if a lousy name is “smart beta’s” biggest weakness, it’s well worth the trade-off…

Portfolio Update

Berkshire Hathaway (BRK-B) added 0.64% last week. As an alumnus of Harvard myself, I find it amusing that Harvard turned down Warren Buffett in 1950 when entrance standards were much lower than they are today. (You can see JFK’s shockingly bad Harvard College application essay here.) After only 10 minutes of interviewing him, the Harvard representative found Mr. Buffett to be “a scrawny 19-year old, who looked 16, and had the social poise of a 12-year old.” Although Warren took the rejection hard, the loss was all Harvard’s. Fortunately, Mr. Buffett’s son Peter had enough sense to attend Stanford, before dropping out after a year. BRK-B is a BUY.

Exclusive  Will The S&P Hold This Crucial Long-Term Trend Line?

Visa Inc. (V) rose 3.11% last week. Speaking of Warren Buffett, according to its recent 13F filing, Berkshire Hathaway currently holds 1.5 million shares of Visa with a value of nearly $300 million. It is no surprise that Buffett is associated with the two longest-held and most profitable positions in your portfolio. V is a BUY.

iShares MSCI Ireland Capped Investable Market Index (EIRL) closed flat last week. BlackRock, Inc. will change EIRL’s underlying index today to the MSCI All Ireland Capped Index. This move will maintain exposure to domiciled Irish companies, as well as companies with a significant Irish presence, and attain the goal of increasing the fund’s diversification. EIRL is a BUY.

iShares MSCI Singapore Small Cap Fund (EWSS) dipped 0.88%. EWSS touched the mighty $28.00 support level on Monday and appears to be maintaining this key line in the sand. This is the fourth time EWSS has experienced this price level, going all the way back to June 2013, and each occurrence has been followed by a solid bounce. EWSS is a HOLD.

Google Inc. (GOOG) added 3.24% last week to hit a new 52-week high, breaking through its recent trading range. Google continues to be hard at work changing the world, and its latest target is the traditional smart phone. Motorola Mobility, a subsidiary of Google, creates the retail line of Motorola mobile phones. Motorola Mobility is currently working on a project dubbed “Project Ara,” which is essentially an effort to redesign the smartphone into a singular chassis consisting of interchangeable modular components. This approach will let users pick and choose swappable modules, allowing them to obtain any desired camera module, memory module, processor module, etc. Motorola Mobility also recently announced a new partnership with 3D-printing pioneer 3D Systems as the producer of these modular components. This project may reshape the future of the modern smartphone and break the “new phone every two years” cycle. GOOG is a BUY.

Exclusive  Analyzing the Three Best Small-Cap Stocks to Buy Now

Wisdom Tree Japan Hedged Equity (DXJ) rose 0.22% over the past five trading days. DXJ took a large tumble from its 52-week high back in May 2013 — and you bought perfectly at “the bottom” of this correction. Fast-forward to today, and DXJ has delivered nearly a 14% gain to your portfolio. As of last week, DXJ hit $50.00 for the first time since you bought it, as the Japanese stock market recovery remains well primed to continue. DXJ is a BUY.

Guggenheim Spin-Off (CSD) jumped 3.27% last week to hit yet another new 52-week high. Since bottoming in early 2008, CSD has been on a nearly unbroken trajectory upwards — and this trend remains healthy as companies continue to spin off entities as they have for decades. CSD is a BUY.

PowerShares Buyback Achievers (PKW) gained 1.31% to hit a new 52-week high last week. PKW’s long-term chart also shows a sustained bullish trend since the early days of 2008. With corporations sitting on mountains of cash, PKW remains a BUY.

First Trust US IPO Index (FPX) added 1.42%. Investment in initial public offerings (IPOs) can be quite a volatile prospect when taken on a stock-by-stock basis. Investing through FPX, and its widely diversified IPO portfolio, removes a large amount of the inherent risk in trying to pick individual IPO winners. FPX is a BUY.

WisdomTree Japan SmallCap Dividend (DFJ) dipped 1.03% last week after falling from its recent new $52.00 high and resistance point. DFJ also dipped a few pennies below its rising 50-day moving average (MA). However, each of the three recent moves to the 50-day MA has resulted in a move higher. I expect more of the same looking ahead. DFJ is now a HOLD.

Vanguard Global ex-US Real Estate ETF (VNQI) lost 2.06%. VNQI gives you broad diversified exposure to real estate on an international level. With the global real estate recovery nowhere near its pre-correction levels, VNQI has quite a bit of room to move higher in the months and years ahead. VNQI fell below its 50-day MA last week and is now a HOLD.

iShares S&P Global Timber & Forestry Index (WOOD) gained 0.71% last week. Although WOOD has been in a sideways trading pattern over the past few weeks, WOOD managed to eke out a second week of gains. Trading directly along its 50-day MA, WOOD is now a BUY.

PowerShares Global Listed Private Equity (PSP) gained 0.95%. PSP touched the 50-day MA three weeks ago and has continued to rise since then. With the Fed all but guaranteeing that interest rates stay at low levels until 2015, the “masters of the universe” should remain quite content to continue growing their piles of cash for the foreseeable future. PSP is a BUY.

Exclusive  The Real Cause of Income Inequality Will Surprise You

Market Vectors Biotech ETF (BBH) gained another 5.77% over the past five trading days. Yesterday marked the third consecutive week of strong gains for your position in BBH, as it saw yet another 52-week high. The Biotech is currently one of the strongest leaders fueling the recent run in the NASDAQ Composite Index. BBH is now firmly a BUY.

ProShares Ultra-Short 20+ Year Treasury (TBT) spiked early last week, only to drift back and close the week flat. TBT got off to a rocky start as the Federal Reserve did nothing to help this fund. However, TBT remains resilient and stands as a strong “ultrashort” hedge in your portfolio, helping to guard against any sudden jump in treasury yields. TBT remains a BUY.

Icahn Enterprises, L.P. (IEP) added 3.54%. Carl Icahn is a true icon when relating to the term “activist investor” — and this is great news for your portfolio. Just yesterday, Mr. Icahn tweeted a reminder of this fact, stating that the value of his activism has equated to a 28% annualized return for his investors. IEP is a BUY.

Global X Guru Index ETF (GURU) rose 2.07% this past week. GURU made history yesterday, as it became one of the first foreign exchange-traded funds (ETFs) to ever be listed on the Colombian stock exchange. GURU is a BUY.

Finally, my colleagues at Eagle have been working hard on re-designing the www.EagleDailyInvestor.com site. Go check out the new site now and come back every day for exclusive stories, market commentary and analysis you won’t find anywhere else!

Latest Special Reports

As a courtesy, I want to bring to your attention my latest special report, Rally Ringer Stocks: 3 Plays Leading the Dow to 18,000. This FREE reports gives excellent investment information on a key segment of the market.

In addition, take a look at the latest version of The Top 12 Stocks You Should Buy Right Now, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. These special reports and others are accessible FREE on my website.

share on:

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader


Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor