Categories: Smart Money Masters HotlinesStock Market News

Reflections on the Smart Money Masters Portfolio

The U.S. stock market closed a mixed week.

The S&P 500 rose 0.49% and the Nasdaq rose 1.2%. The Dow Jones dropped 0.42%, while the MSCI Emerging Markets Index pulled back 1.41%.

Your most recent Smart Money Masters recommendation, Mohnish Pabrai’s Fiat Chrysler Automobiles N.V. (FCAU), continues its relentless rise upward, jumping 4.79%. This position is up a remarkable 33.65% since my Aug. 11 recommendation.

Charlie Munger’s Costco (COST) recovered 3.63% as the market’s love affair with Amazon.com begins to wane. George Soros’ Liberty Broadband Corporation (LBRDK) also rose another 2.48%. Plus, The Priceline Group (PCLN) began what I expect to be the start of a strong recovery, gaining 1.98%.

Since launching in February of this year, your Smart Money Masters portfolio has generated some solid gains.

Five of your positions — PayPal Holdings (PYPL), Restaurant Brands International (QSR), Liberty Broadband Corporation (LBRDK), Fiat Chrysler (FCAU) and Baxter International (BAX) — all boast double-digit-percentage gains.

PayPal is now up over 50%.

A few things have become apparent.

First, the Smart Money Masters portfolio is not an index-hugging portfolio. A specific investment rationale drives each holding, and each is different from the overall market sentiment.

Second, each position is driven by news. Whether its Fiat Chrysler’s (FCAU) remarkable rise in the past three weeks, or Navigator Holdings’ (NVGS) rollercoaster ride, it is news that drives each of these recommendations. That makes each recommendation more volatile than the overall stock market.

That also makes each of these holdings both easier and harder to hold than many others. When a recommendation runs up, it runs up quickly. When it falls, it can fall fast.

Third, there is a compelling story behind each of these positions. And some of the best names in the business have staked a substantial percentage of their portfolios on each idea. Often, these ideas are deeply contrarian. You’ll see the best example of this in next week’s new recommendation.

The lesson?

It is important to view each Smart Money Masters recommendation as part of a whole portfolio. When one position zigs, the other zags. That balance ensures that you can sleep well at night

Portfolio Update

Kraft Heinz (KHC), Restaurant Brands International (QSR), Blackberry (BBRY), The Priceline Group (PCLN) and Markel (MKL) are all trading below their 50-day moving averages and are currently HOLDs.

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.