Robert Drach's "Basic Timing" Model Portfolio
Bob Drach publishes his daily commentary and display portfolio to illustrate the "market timing" method of investing. (To learn more about Bob Drach, read this short biography.)Drach's Daily Commentary
November 19, 2009
Basic Timing
Daily commentary, current portfolio structure and history follow.
Please direct questions and comments to:
Drach Market Research
2910 Kerry Forest Parkway D4-210
Tallahassee FL 32309
Tel.: (850) 576-2680
E-Mail: DrachMkt@aol.com
Model Portfolio Position Changes: : None.
Major movements (+ or - one point or more among holdings): Sigma Aldrich -1.13.
Probabilities favored a negative session and a negative session it was for broadly based measures, this portfolio model and the most popular averages: Dow Industrial - 93.87, S&P 500 -14.90, Nasdaq Composite -36.32.
Brief choppy trading patterns are characteristic of the current cyclical stage and have no effect on longer term aspects which continue to conform to norms.
We are into a combined monetary infusion cycle; created/defined by massive (Federal Reserve + legislated) stimulus actions.
In the world of probabilities, it is not possible to achieve absolute 100%. However, they can get very high.
It is extremely likely that the cyclical low occurred March 9, less than a month after the $787 billion American Recovery and Reinvestment Act was signed into law.
Following precedent (money flow patterns) from prior infusion cycles; without exception, the advance off the cyclical low is explosive as occurred. Then, there is a brief stage of extended advance at a more moderate pace as occurred. Since September 17, the cycle has been in a stage characterized by choppy pricing patterns with a net positive resolve as has been happening.
The current stage involves rectifying internal pricing dislocations associated with the recession. Reflective of the magnitude of the recessionary mess, this stage will likely be relatively lengthy and persist at least until well into next year.
Vacillating day by day "news" events are of negligible substantive importance relative to the underlying force of additional money supply and the legislated pathways of its infusion into the economy. This cycle has a long way to go because of time lines associated with getting the stimulus money into the consumer sector.
Entering Friday (tomorrow), this portfolio will likely purchase a position.
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Portfolio model initiated 5/5/95, archived and marked to market daily.
Initial S&P 500 level 520.12, initial portfolio value $520,120.00
Current portfolio value $1,233.09, gain 137.08%.
These results are reflective as to capital capture and market price of current holdings, itemized below. They do not include cash dividends, interest earned on cash balances, transaction costs, or anything else.
Current Stock vs. Cash Allocation
$1,203,328.05 (97.5%) stock. $29,761.31 (2.5%) cash equivalents.
Summary of Closed Positions
| Total Positions | 401 | Average Position | |
| Profit | 360 (89.78%) | Percentage | + 7.26% |
| Loss | 41 (10.22%) | Days Held | 205 |
| Even | 0 ( 0.00%) | Annualized | + 12.93% |
Relative performance vs. S&P 500 since initiation (5/5/95)
| This Portfolio Model | +137% |
| S&P 500 | +110% |
