My model portfolio is composed of stocks from across the world that I discover, and either write about on my blog, The Mirandolan, or which I simply analyse and upload the data for onto this site. The rules are simple:
- The stock must be publicly listed on either the New York Stock Exchange, or Nasdaq, or Euronext, or the Tokyo Stock Exchange, or the Bombay Stock Exchange, or the National Stock Exchange, or the Toronto Stock Exchange, or the London Stock Exchange, or Tadāwul, or the Deutsche Börse, or the Nasdaq Nordic, or the Taiwan Stock Exchange, or SIX Swiss Exchange, or the Australian Securities Exchange, or the Korea Exchange, or the Johannesburg Stock Exchange, or the Dubai Financial Market.
- After making the appropriate accounting adjustments to the financial statements, I use my stock rating methodology to determine if the stock is very attractive or attractive. If so, it goes into the model portfolio.
- I weight them by contribution to portfolio return on invested capital (ROIC).
- If the stock reaches a neutral rating, I assess the economics of the business against that of its peers and the rest of the market, to see if I can find a better risk/reward proposition, otherwise, I close the position.
- The performance of the portfolio is measured against that of the S&P 500 or the risk-free rate, depending on which is the greater.
The portfolio at present is extremely concentrated, as the table below shows.
Performance is assessed at the end of every quarter.