How to beat the S&P 500 with this portfolio

In investing, finding a strategy to beat the market is the dream of many.
Tom Lee, the founder of Fundstrat Global Advisors, appears to have achieved this milestone with his “Granny Shots” portfolio.
Launched on January 10, 2019, it demonstrated extraordinary performance, outperforming the S&P 500 Index by a large percentage.
Since its launch on January 10, 2019, this portfolio has consistently outperformed the market, up 157.3%, compared to 68.4% for the S&P 500 Index, and looks to be no different in 2023, with a performance of 8% higher than that of the US benchmark index.
But what makes this selection of titles so special? A High-Efficiency Wallet The name of the wallet, “Granny Shots,” is an homage to a shooting style in basketball known for its extremely high efficiency.
This parallel to Tom Lee's approach to investing is fascinating: seeking the most efficient and profitable choices in an often volatile and unpredictable market.
And it seems that this strategy has borne fruit, with results that speak for themselves.
At a time of great uncertainty and turbulence in the markets, it is worth understanding how this portfolio is performing and what changes have been necessary in the last period.
Rising yields and geopolitical tensions have put investors to the test of late: Last week, 10-year Treasury yields neared the critical 5% level.
Despite this unstable and volatile environment, Tom Lee remains optimistic about the future of the stock market, supported by strong economic indicators.
7 Stocks to Beat the Market Lee's portfolio recently underwent a rebalancing to address the new economic environment.
As part of this operation, 7 new titles have earned a place in the “Granny Shots” portfolio.
Among the stocks recently entered into the portfolio we find Caterpillar (C).
Despite the correction that has been ongoing since August, Caterpillar is a significant name in the machinery and industrial vehicles sector, recording an extraordinary increase of 58% since July 2022.
Prices are still trading above the 200-day EMA, currently passing through around 250 dollars, and to the trend line drawn from the lows of a year ago, at around 238.
Computer software giant Oracle (ORCL) has racked up gains of more than 30% year to date and 78% since September 2022.
The decision to add Oracle to the portfolio is supported by analysis from Evercore ISI, which rated the stock “overweight,” citing an attractive valuation relative to the company's steady revenue and earnings growth.
Oracle is also moving above its 200-session exponential moving average, trading at around $104.
Hess (HES) hit new all-time highs at $167.75.
The energy company has rallied 17% in 2023 and 85% from July 2022 lows.
The company has been recognized by Morgan Stanley as a top high-dividend stock to buy, highlighting the strength and prospect of growth in the energy sector.
Everest Group (EG) has entered the “Super Granny” list and has indeed already reached new records at $410.
Despite growth of 22% year to date, Fundstrat still sees considerable upside potential for the stock.
This is particularly evident in the insurance sector, which has demonstrated superior relative strength of late.
Transdigm Group Incorporated (TDG), an aerospace and defense leader, soared 55% in 2023, with earnings growing faster than the market.
Although the stock has lost around 11% from the absolute records set during the summer, at $940, the underlying trend is markedly bullish.
Visa (V), a global leader in digital payments, has also entered Lee's portfolio.
Acquisitions and strategic alliances have spurred sustained growth and steady revenue growth for the company.
In parallel, continued investments in technology are strengthening its leadership in the payments sector.
Visa is moving above its 200-day EMA above $230.
The last stock on the list is Old Dominion Freight Line (ODFL) which just yesterday announced the distribution of a quarterly dividend of $0.40 per share.
At the publication of the quarterly report, scheduled for October 25, the trucking company expects earnings of $2.85 per share, down -15.2% year over year.
The stock moves well above its 200-day EMA, passing from $364, but a bearish head and shoulders (potential) forming from the highs of late July looms large on the chart.
Future Outlook Tom Lee's portfolio rebalancing comes at a time of rising yields and geopolitical tensions roiling investors.
However, Lee remains optimistic about the prospect of a stock market rally towards the end of the year.
He said rising 10-year Treasury yields and stronger GDP growth could push rates and earnings per share higher, creating opportunities for investors.
According to financial models from Fundstrat Global Advisors, the S&P 500 index could rise to 4,825 points in the coming months.
However, let us remember that giants such as Morgan Stanley have a different vision and predict a correction to 3,900 points by the end of the fourth quarter.
In conclusion, Tom Lee's “Granny Shots” portfolio demonstrates that it is possible to outperform the S&P 500 with a well-thought-out and careful investment strategy.
The stocks added to the portfolio reflect Lee's ability to identify promising opportunities in key sectors of the economy.
In a rapidly changing financial world, Lee's results provide a strong incentive for investors to carefully follow his moves and consider how his approach might contribute to the success of their investments.
DISCLAIMER The information and considerations contained in this article should not be used as the sole or primary support on which to make investment decisions.
The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon.
The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings.