My strategy is heavily tilted toward the Value and Size (Small Cap) factors, with a significant International/Emerging Markets component. I just can’t get behind the valuations of the major tech companies. Yeah, they’re dominating and will continue to dominate, but they’re priced to perfection. Hence the tilt to diversified equity factors like value, size, and international equities.

As the chart below shows, I’m currently sitting on ~36% of cash because I think the risk/reward doesn’t favor mid- or long-term bonds right now.

You didn’t come here to read about a bunch of factor bets in ETF wrappers. That’s boring even if it is cheap and easy to implement and the way to go for most investors. No, you came here for the long and short individual positions.

The table below shows my current holdings as of today, along with their relative weightings. I’ll go into each of the longs in more depth in future posts because I tend to hold those for multi-year periods unless I get lucky.

I’m not making any heroic bets here - all I try to do is buy durable companies that are trading at the low end of their historical valuation range. Some people may call this counter-cyclical investing; I just call it buying out of favor good companies.

My shorts are either melting ice cubes or companies that haven’t managed to make any fundamental headway in the past five years even though we’ve had a liquidity-flooded raging bull market going on.

This portfolio rejects standard market-cap weighting, which is currently dominated by US Mega-Cap Growth. It is positioned for a world where global valuations mean-revert, the dollar weakens, and smaller, undervalued companies reclaim their historical risk premium.

However, it is not a high-conviction portfolio. You’ll never see me take outsized positions in any one stock. I’m not smart enough to do that and I’ve worked entirely too hard over too many years to risk a sizable chunk of money on something that it is entirely possible I am absolutely wrong about.