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Early Look at Core Portfolio Changes in 2024
I wanted to think aloud with you all regarding my core portfolio changes coming up at year's end.

Each year I add one new stock to my "core portfolio" to keep the ratio of stocks in my core portfolio the same as my age -- 35.

The purpose of these 35 core holdings is to group my favorite current stocks together, making them easy to add to with dollar-cost averaging.

I also allow myself the opportunity to turn over 10% of that core portfolio, meaning I'll switch four stocks out for new ones next year.

However, while these stocks will be removed as core holdings, they will not be sold -- just not actively added to like the rest of the portfolio.

For example, I dropped $SE, $TWLO, and $DOCU last year and added $V/$MA (split), $PGNY, $POOL, and $TREX.

Here was the portfolio before that change:

This year, I have decided that $TDOC and $RBLX are out the door already, with $PINS, $U, $UPST, $ROKU, and $FDX potentially on the chopping block.
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Conversely, I am almost sure to add $DOCS and $ODFL to replace Teladoc and Roblox.

That leaves two more stocks to drop and three more to add.

Here's a list of my other candidates to add with a few words on why they're interesting:

  • $WINA - Franchiser of resale retail brands Music Go Round, Once Upon a Child, Plato's Closet, Play It Again Sports, and Style Encore. Total return of 500%+ over the last ten years and massively profitable.
  • $MEDP/$ZTS - Medpace would act as a picks-and-shovels play to the smaller side of the biotech industry. Zoetis dominates pet and livestock healthcare medicine. ROICs of 57% and 18%, respectively.
  • $ULTA - Average ROIC well above 20% for the last decade and is the biggest player in its beauty niche. It would bring some consumer exposure I need, much like Winmark.
  • $LII/$MUSA - Buyback wizards, with Lennox's shares down 28% in the last decade and Murphy USA's down 54% in the same time. ROICs of 40% and 23%. Wildly boring HVAC/refrigeration and gas station industries, but top-tier operators. $AZO/$ORLY could also go here.
  • $WM/$HSY - Pure stability plays against a bear market. I don't have much like this in my core portfolio yet.

Of course, this is an incomplete watchlist, but I wanted to put it in writing all the same.

I would love to hear what you would choose from these or if you have a stock that may be a better idea.

Thanks as always for reading. 🙏
Which group is most promising to you?

9 VotesPoll ended on: 8/9/2023

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