In the first nine months of 2024 our Focus List Stocks: Short Model Portfolio[1], the best of our Danger Zone picks, outperformed shorting the S&P 500 by 6% (down 14% vs. down 20% shorting the S&P 500). See Figure 1.
The Model Portfolio has beaten shorting the S&P 500 by 44% since the start of 2021. See Figure 2. This outperformance underscores how important reliable fundamental research can be.
Figure 1: Focus List Stocks: Short vs. S&P 500 in First Nine Months of 2024
Sources: New Constructs, LLC
As a short portfolio, the Model Portfolio’s return increases when the underlying stocks go down.
Figure 2: Focus List Stocks: Short Performance Since Beginning of 2021
Sources: New Constructs, LLC
Figure 3 details the Model Portfolio’s performance, which includes all stocks present in the Model Portfolio at any point in the first nine months of 2024.
Figure 3: First Nine Months of 2024: Performance of the Focus List Stocks: Short Model Portfolio
Sources: New Constructs, LLC
Performance includes stocks in the Model Portfolio in the first nine months of 2024 as well as those removed during the same time (3).
Professional and Institutional members get real-time updates and can track all Model Portfolios on our site. The Focus List Stocks: Short Model Portfolio leverages superior fundamental data, which provides a new source of alpha.
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This article was originally published on October 11, 2024.
Disclosure: David Trainer, Kyle Guske II, and Hakan Salt, receive no compensation to write about any specific stock, sector, style, or theme.
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[1] Stocks are in the Focus List Model Portfolios for different periods of time as we open and close positions during the year. When measuring outperformance of the Focus List Model Portfolios, we compare each stock’s return to the S&P 500’s return for the time each is in the Focus List Model Portfolios. This approach provides more of an apples-to-apples comparison of how each stock performed vs. the S&P 500.