MMM - My 2023 'Left For Dead' Portfolio Rebounded 36% Here's The 2024 Version

2024-01-24 02:38:17 ET

Summary

• The author created a stock portfolio at the end of 2022 consisting of underperforming stocks that they believed had potential to rebound in 2023.
• The portfolio outperformed the market by over 10% in total return in 2023.
• The author chose the stocks based on their familiarity with the companies and their belief that the stocks had temporary issues that could be resolved in the coming year.
• Here we introduce our 2024 portfolio.

Near the end of 2022, I put together a small stock portfolio consisting of stocks that had notably underperformed in what was already a bad year for the market. I felt that these stocks had either been unjustly punished, or at least had significant potential to rebound in 2023. These are decent companies, but since they all had some temporary fleas the market sentiment around them was poor. Stocks like this tend to get hammered at year end due to tax-loss selling, driving their prices down even further and potentially increasing the opportunity. My instincts proved right as the portfolio outperformed the hot 2023 market by more than 10% in total return. Here I quickly review that portfolio, and unveil the 2024 "Left for Dead" portfolio, a few weeks later.

Screening For "Losers"

So how did I choose the lucky participants? In each case these were companies I either already owned or had been watching and had at least some familiarity with. So I did not start with a blind quant screen - I picked stocks I knew reasonably well that had been beaten down severely in 2022. These were not Buffet's proverbial "cigar butts", but decent companies with likely temporary issues that once righted could bounce at least 20% in the coming year. Typically they ended the year near 52 week lows....

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