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Folks, last week, we talked about July as the month to review our portfolios and watchlists to identify what's worth our attention, and which stocks have lost their luster. I shared with you a four-part checklist. And, the first two questions in the checklist are about which winners in our portfolios are worth holding, and which losers are not worthy of our time anymore.
This week, I'd like to share our approach to answer the first two questions of the checklist. This is a long-form email that goes through the step-by-step process we are using to conduct our July's portfolio clean-up. Let's get to it.
STEP ONE
There are 94 stocks in my Roll With Our CEO portfolio. First, I wanted to identify the winners and losers based on their total return in comparison to the overall market. I have all such information available to me on Stock Card. If you go to Track Your Performance page, the last column in each portfolio shows your stocks' gain over the S&P 500 market index. I used that column to group my stocks into overperforming (winner) and underperforming (loser) stocks. This is how the results turned out: 
Note that an underperforming (loser) stock may have grown higher, but not just faster than the overall market. While not losing money is great, overperforming the market matters the most. If they are underperformers, you'd want to dig deeper to figure out whether you can see a reasonable path for the company to surpass the market. Otherwise, it needs to get casted to free up cash for stronger picks.
STEP TWO
The next step I took was to group the stocks in my Roll With Our CEO portfolio based on their market potential and operational strength. Again, such information is available on the Track Your Performance page. Looking at the Stock Card's 2X2 thumbnails (on All Stock Card page), as you know, the top two colors represent "market potential" and "company strength". If both market potential and company strength categories were yellow, grey, or red, indicating a potential weakness in the market or operations of the company, I tagged the company as a stock that needs a "Review." Here's how the results turned out: 
STEP THREE
Now, let me take the analysis one step further to figure out how many stocks are real concerns because not only they have "Underperformed" the market, but also they need a "Review". This is the part I'm very excited about. It's a map of my portfolio based on where I need to pay the most attention: 
In the next few weeks, I will share a detailed review of the 20 stocks in my portfolio that have underperformed the market, and also have shaky market potential and operations. The Stock Cards of those companies will get a comprehensive review and update, and you will be notified if any of them are either worth adding more to or getting rid off. Stay tuned for the next update.
NEXT STEP FOR YOU:
Now, it's your turn to start your July portfolio review. How many of your stocks have underperformed the market? And, which ones have a combination of shaky market and operations?
If you have any questions about how to evaluate your portfolio using the above approach, you can schedule a one-on-one Office Hour. This is a concierge-style service we only provide to our VIP users. All existing VIP members or if you are planning to join us as a VIP member, have the privilege to schedule a VIP only Office Hour to ask their questions (Disclosure: We are stock market research coaches. The Office Hour is not an investment advice and we are not investment advisers.)
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