Top 10 ideas for a core US portfolio

Portfolio construction is like a good exercise workout. Start with core strength and then build on that. Here we select ten ideas across eight sectors.

Following our recent note on opportunities in this global correction, we segue this service into the core value proposition of a good newsletter service:

1. Get the core portfolio right

2. Get the risk management right

3. Establish how to maintain the portfolio

I have been in the investment management business for three decades, and can share my best learnings over my entire career in a single phrase:

Don’t sweat the small stuff, position for core strength and build on that.

There is always more to life than pithy aphorisms, but you need a good base.

Overnight, we conducted a reader survey, which was extremely helpful.

Thank you to everybody who responded.

Refocusing our service offering

Those who have followed us from the very beginning, a whole three months ago, will know that I set up the Savvy Yabby Report to share two key elements of value:

1. Portfolio ideas and construction advice

2. Market commentary on the current environment and opportunities

Thus far we have done more of item two, than item one, because I have spent time explaining some of the novel tools we use, such as our sentiment indicator.

It was never my intention to only do that, but I hope you understand that some initial preparation work was necessary to explain why we look at such things.

Along the way, I built a bunch of systems to help me manage that, including an all singing and dancing chart pack.

This was too much too soon, and the reader feedback has been clear:

Don’t baffle me with spreadsheets, just tell me clearly what to look at.

I hear you and apologize for the frustration this caused some readers.

To the other readers who signaled they see some value in this idea, I have not given up entirely, but will work, over time, on a proper web application.

This will be kind to people on all platforms, and not use Excel from Hell.

It will not be a Windows Zealot offering that excludes folks who use other platforms.

However, thanks again for your honest feedback, as this makes my life easier in delivering a quality newsletter service for you.

I can focus on the investment ideas, so let’s start.

Tips on getting your core strength right

Years ago, when I turned forty. Okay, start again…

Decades ago, when I tuned forty, I had a problem with core strength.

This manifested in a wonky L5 vertebra.

Constant deskwork with laptops can easily lead to painful lumbosacral problems.

At the time, I had no idea what was going on, and so went to see my GP. They had no idea either and so sent me to get a spinal X-Ray. Those doctors had no idea, so they prescribed super-strong painkillers, which did nothing at all.

I was in so much pain I just lay there and thought about being 39 again.

Within a few days, a good friend of mine volunteered that I go see a physiotherapist. One of his relatives, by marriage I think, was an expert in sports rehabilitation.

She worked a lot with top-flight ballet dancers to get them back on the stage.

My cousin has been a professional ballet dancer in London, so I knew that this was the best possible reference for a practicing physiotherapist. I made an appointment.

She taped me up, got me stand in different poses, poked around a bit, and shared the basic physiological issue. The core muscles that balance the spine, through their link from the spine to the pelvis, were flaccid and basically not working.

I explained my condition this way…

When I take a step, I feel like I am balancing on my spine and could fall off.

She nodded and explained that this was precisely what was going on.

I was surprised. Really?

Yes, really. Your lumbosacral joint is unstable due to weak musculature.

The solution took perhaps eight weeks of targeted stretching and core strength exercises to firm up my pelvic muscles and everything was right as rain.

I have never looked back and use laptops more carefully.

Let us now look at the portfolio equivalent.