Beachman's comeback portfolio - Nov 2022 report

Portfolio: Month-end update on my portfolio performance and actions

Soon after we digest this monthly report, I am diverting my attention to better positioning my portfolio for 2023. What does this mean exactly?

I started mapping out how each quarter in 2023 is likely to shape up across 35+ macro metrics and sector dimensions. I conducted a similar exercise for 2022 and forecasted that markets would bottom towards the end of Q3 2022.

Well...the SP 500, the Nasdaq and the Dow Jones, all, bottomed on Oct 13th 2022.

Current indications are that those lows will hold through the end of 2022 (fingers-crossed). I also used the 2022 macro map to identify sectors and stocks to own in my comeback portfolio. Understanding market dynamics and macro cycles has proven immensely valuable. e.g. I sold e-commerce stocks in early 2022 before they dropped, while going overweight in semiconductor stocks in early Q4 as they were bottoming.

Nevertheless, let's not rest on our laurels. I need to move ahead and use learnings from this past exercise to improve my market-mapping for next year. In order to do this, I am referring to additional, reliable sources of macro and sector data and I am mapping about 35% more metrics in next year's map.

Here is the rough framework of this new series of posts starting later this month:

1. Comparative analysis of each company’s Q3 business performance. It will refer back to my mid-Oct post about how I am evaluating Q3 reports and what specifically I am looking for

2. Q3 earnings wrap-up, updated Beachman scores, new leaders and fallen heroes. At the end of each quarter, I calculate the scores for about 45-50 stocks on my watchlist and I track how they have performed across several quarters. This report will now include 5 quarters of comparative trend data

3. Initial preview of 2023 macro-map. I already have a good start to it and over the next few weeks, I will continue to "mature" it with additional, reliable forecast data. It is important to note that these are not predictions. They are meant to serve as well-informed, guesstimates. I don't blindly believe any of these forecasts. I use them to better inform my own opinion and portfolio actions. I have found that it is better to use data and information over a longer period of time versus reacting suddenly to one day's or one week's events or a tweet or You Tube video

4. We will then use #2 and #3 to identify and research a few stocks that might be good candidates for my portfolio. Let's see what comes up for consideration

5. As part of #4, we will compare the new contenders to my current stocks to make a buy/sell/replace determination

And so that’s the approach for this body of research over the next say 4-6 weeks.

The goal is to better understand how things will play out in 2023 and to position my portfolio to benefit from the opportunities and to avoid the potholes along the way.

2022 was brutal for most of our portfolios. There is no need for 2023 to be the same. I received several questions recently about whether we should buy value stocks now or dividend stocks in 2023. I believe that this exercise above will help answer some or all of those questions.

Hope you come along with me on another interesting, investing journey leading into the new year.

Now on to the Beachman portfolio numbers.

Portfolio performance

• Beachman comeback portfolio return YTD: -37.23%

• S&P 500 Index return YTD: - 14.94%

• Dow Jones Industrial Index return YTD: -5.45%

• Nasdaq return YTD: -27.57%

• BRK.B YTD: 5.92%. (Provided to compare this growth-oriented portfolio to a widely-held, value stock)

The comeback portfolio lost 3.84% of it's value during the month of Nov 2022. Being a tech-heavy portfolio, it tracks closer to the Nasdaq index. However, last month, Q3 earnings reports for some of my stocks dragged the portfolio down due to valuation concerns in the light of ongoing, forward macro pressures.

When I review an earnings report, I track several, key business metrics as you have seen in the detailed financial maps that I include in each post. And then I step back and consider the following three dimensions:

• Growth (up-trending topline growth & increasing user adoption)

• Execution (operating excellence & financial management)

• Vision (and a strategic roadmap to get there)

If the company is still delivering against all these three while maintaining or improving their Beachman score, I am satisfied. I don't chase a quarterly stock price improvement at the expense of missing out on a longer-term, multi-bagger opportunity. So Q2 and now Q3 has been an exercise in careful analysis, measured patience and slowing down my investor metabolism (urge to take hasty action).

Now let’s review the portfolio’s holdings, position sizes and detailed performance.