I’m gearing up for the next change in my portfolio, but unlike prior reshapings, I am putting out my industry ranks first. As I have mentioned before, the rankings can be used in value mode (green) or momentum mode (red). That reflects two different philosophies on investment turnover and time horizons.
I am still negative on the banks, and think the present relative strength will reverse. The same for housing-related industries… there is more weakness to come.
For those playing momentum, with a few exceptions, the industries in the red zone are industries with stable cash flows. That is another sign of risk aversion in the present environment.
I will be putting out my replacement candidates later this week; at present, I’m not sure what way my portfolio will move. These are unusual times, and I am focused on survivability, and after that, cheapness. Safe and cheap, with the accent on safe.