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Is it time to drop Moderna (MRNA) from the NAS100 and Aggressive portfolios?
Lately it seems to be a lead weight (today it’s the worst performing stock in both the S&P 500 and the Nasdaq 100 indices…and it seems to have had several such days over the last couple months).
Good question. Today’s announcement from Moderna was very unfortunate, but our strategies are all driven by back-tested algorithms and we publish their signals as-is and don’t make our own judgement calls. Hindsight being 20/20, we think it is best to stick to a plan and avoid making “gut” calls. Of course, each investor has their own level of knowledge and experience and should make their own decisions based on that. A few more observations…
- The NAS100 strategy uses the current components of the NASDAQ 100 Index and since MRNA is part of it, it must be part of the strategy.
- All algorithms will pick winners and losers, but we believe that the long-term performance of our strategies will approximate their historical performance.
- NAS100 is currently hedged 40% and MRNA is one of four stock picks, so the impact of any one stock is mitigated. The Aggressive Core Portfolio is even more diversified.
- If you look at the Nasdaq100 leaders sub-strategy in QuantTrader software you will see that the lookback period is 78 days. Over that period, MRNA was up 44% at the end of last month, which is why it ranked highly.
- Subscribers can use QuantTrader to view the stock rankings of any strategy and choose to add or remove individual stocks or substitute a lower ranked stock. For example, this month XLNX was the 5th ranked stock in the Nasdaq100 leaders sub-strategy which uses the top 4 ranked stocks.
I hope that helps and would be interested to hear other subscribers’ thoughts on the topic…
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