Issue #100, Volume #3
Why Prophet Rebalances Even When It Feels Uncomfortable
Inside today’s Daily Journal…
|
Editor’s note: Porter has turned today’s Journal over to Emmet Savage of MyWallSt. This week, Emmet and his team at MyWallSt are rebalancing the holdings inside Prophet – the rules-based investing system designed to identify companies with both improving business momentum and improving share-price momentum.
This is an important moment… particularly for readers who have been following Emmet since Porter traveled to Ireland this spring to learn more about his system. You see, Prophet is not built around forecasts, opinions, hunches, or market commentary…
It is built around discipline.
Here’s Emmet with the details…
One of the hardest lessons I’ve learned in nearly 30 years of investing is that good investing often feels wrong in the moment.
Buying when the market is ugly feels wrong.
Holding through a 40% drawdown feels wrong.
Selling a company you like because the evidence has weakened feels wrong.
And buying a company you don’t yet feel emotionally attached to – simply because the data has improved – can feel wrong too.
But that is exactly why having a system matters.
This week, we are carrying out a new rebalance inside our service, Prophet. That means the system has done what it is designed to do: review the portfolio, reassess the evidence, and decide whether the 10 companies currently held still deserve their place.
Not because I woke up with a feeling.
Not because of a headline.
Not because of a prediction about interest rates, elections, inflation, oil, or the Federal Reserve.
Because the rules say it is time to look again.
That may sound simple. But in my experience, simple is rarely easy.
Most investors do not lose because they lack intelligence… They lose because they lack a process.
-
They buy because something feels exciting
-
They sell because something feels frightening
-
They hold because they are attached
-
They avoid buying because they feel they have “missed it”
A system removes as much of that emotional interference as possible.
And that is the entire point of what we are doing with Prophet.
Why Rebalancing Matters
Every stock in a portfolio is competing for capital.
A company does not deserve a place in a portfolio forever because we once liked it. It deserves a place because the evidence still supports owning it today.
In Prophet, we are looking for a specific combination: improving business momentum and improving share-price momentum.
We want companies where the business is getting stronger and the market is beginning to recognize it.
That overlap matters.
A wonderful company with weakening numbers may still be wonderful, but it may no longer be the best place for fresh capital. A stock moving sharply higher without business strength underneath it may be momentum, but not the kind we want to own.
The rebalance asks one clear question:
Do we still own the 10 strongest candidates according to the system?
If the answer is yes, we hold.
If the answer is no, we make a change.
There is no drama in that. It is simply the process working.
The Portfolio Is Not A Museum
One of the most common mistakes investors make is treating a portfolio like a museum.
They collect stocks. They remember why they bought them. They become attached to the original story. And over time, the portfolio becomes a record of past decisions rather than a reflection of current opportunity.
A portfolio should not be a museum. It should be a competitive team where every company has to keep earning its place.
You can see this clearly in how Prophet has behaved. Howmet Aerospace (HWM) has held its place in the portfolio since December 2024 – surviving roughly 18 months of regular reviews – and in that time has compounded into one of the portfolio’s strongest performers. It stayed not because we grew fond of it, but because month after month the evidence kept supporting it. That is patience in action: giving genuine strength the time it needs to reveal itself.
But the same discipline that lets winners run is what removes the names that no longer belong. This March, the system parted with several holdings after only a matter of weeks – not because anything dramatic happened, but because the evidence behind them had faded. Some left at a loss. None left because of a headline. They left because they were no longer the strongest candidates for our capital, and holding them out of loyalty would have been exactly the museum mistake.
That does not mean trading constantly. Quite the opposite. The biggest money is made by giving great companies the time to compound, and some of my best investments have required years of patience before the market truly understood what was happening.
But patience and passivity are not the same thing.
Patience means allowing a strong thesis time to play out.
Passivity means refusing to change your mind when the facts have changed.
A good system helps separate the two.
Why I Trust The Rules
When people first look at Prophet, they naturally focus on the 10 stocks. Everyone wants the names. But the real value is the process that creates the list, reviews it, and updates it.
Here is a small example that captures why. Medpace (MEDP) was a holding for a long stretch, then the evidence weakened and the system sold it. Some time later, the data improved again – and the system bought it straight back. No grudge. No memory of the earlier exit. No story about being “burned.” Just a fresh look at the evidence and a clean decision. A human investor would often struggle to repurchase a name they had recently sold. The rules had no such difficulty.
That is the point. A list can go stale. A system can adapt.
Markets are not fixed. Business momentum changes. Competitive advantages widen and narrow. New winners emerge. Old winners fade.
The danger for investors is that they often react to price but ignore evidence. They sell too quickly when the price moves against them. Then they hold too long when the original evidence has disappeared.
A system is designed to reverse that. It gives us a defined moment to review, a defined set of evidence to examine, and a defined reason to act – or not act.
No investing system is right every time. But a good one gives us a better way to behave. And in investing, behavior is everything.
What This Week Means
This week’s rebalance is not a prediction about what the market will do tomorrow.
It is not a claim that every new addition will rise immediately.
It is not a guarantee that every company leaving the portfolio will fall.
It is a disciplined update. Based on the evidence available today, the system is telling us where it believes our capital is best placed.
Some months, that will confirm what we already own – the way it has kept faith with Howmet through a long, patient climb. Other months, it will force uncomfortable changes – the way it cut loose names this spring that simply weren’t carrying their weight. But comfort is not the goal. The goal is to keep capital moving toward strength.
It does not ask us to predict every headline, every decision by the Federal Reserve, every election, or every market scare. It asks us to follow the evidence, month after month, with discipline.
There is no shouting. No panic. No grand forecast.
But in my experience, this is how serious wealth is built.
Not by reacting more.
By deciding better.
Emmet Savage MyWallSt
To learn about Porter’s trip to Ireland and conversation with Emmet about his MyWallSt service Prophet, click here now.
Keep in mind, we at Porter & Co. only publish guest essays from publishers we know to offer well-researched ideas vetted by a legal team, excellent customer service, and reasonable refund policies. MyWallSt is one such partner. We do not, however, under any circumstances, make any representations about their investment ideas or strategies, nor will we warrant them as equal to our own. We do recognize that the markets are tempestuous and, at times, ideas that we may not endorse prove valuable.
Tell us what you think of today’s Journal: porterstansberrydirect@gmail.com
3 Things To Know Before We Go…
1. ChatGPT’s near-monopoly is over. OpenAI’s share of the global AI-assistant audience fell to 46.4% in May – down from 65.3% two years earlier, per Sensor Tower’s State of AI 2026 report. Alphabet’s (GOOG) – a Complete Investor recommendation – Google Gemini continues increasing share and has now locked in the clear No. 2 spot at 27.7%, while Anthropic’s Claude quadrupled to 245 million users in five months to reach 10.3%.
2. New Fed chair Kevin Warsh used his debut meeting to start unwinding the forward-guidance era. This afternoon, the Federal Open Market Committee (“FOMC”) held rates steady in a range of 3.50%-3.75% as expected. The real news was institutional: Warsh’s policy statement was markedly shorter and removed “forward guidance” – the Fed’s modern practice of publicly forecasting its expectations for interest rates. Warsh – a longtime critic of the practice – noted that it is “not well-suited to the current policy conjuncture.” He also said he is launching five task forces to review Fed communications, its balance sheet, data sources, productivity and jobs, and inflation, to create a central bank “fit for purpose and focused on the future.”
3. Debt-to-GDP yield plummets. Every new $1.00 of federal debt has generated only $0.52 of GDP since 2008 – a massive efficiency drop, leading to diminished economic returns. If government spending fails to fund productive investments, debt keeps outpacing growth and the fiscal burden on future generations intensifies.
Chart Of The Day… SpaceX Draws The Retail Investor
Retail investors poured $370 million into SpaceX (SPCX) in just three days – roughly 4x the amount they put into Invesco’s Nasdaq-100 ETF (QQQ) and Nvidia (NVDA) over the same period.
Mailbag
“Buying Gold And Bitcoin”
Mike M. writes:Porter,
I certainly was not and am not as wise as you. I never bought gold or Bitcoin even though you have recommended it over the years. I have subscribed to your publications since you started out in Mount Vernon. I asked my friend Doug Casey what he thought of your work. He was enthusiastically positive. Now I am asking myself if I should buy some at these prices which are so much higher than two years ago. The rule of thumb that I picked up somewhere was that an ounce of gold was what it cost to have a good suit made throughout the centuries. I am not sure that rule applies any more. I did notice about four or five years back that central banks were big buyers. What more did I need to know? Twenty years ago, at a conference about banking and inflation, I asked the president of one of the Federal Reserve banks if bankers should buy gold. He looked at me like I was crazy and literally recoiled with what appeared to be disgust.
My latest thought: Since I can’t predict the price of gold, I should buy a one ounce coin each month and apply dollar cost averaging to my acquisition strategy. If you had no physical gold, would you just buy the royalty companies or would you try to accumulate bullion also?
“Fed Meeting This Week”
Tony C. writes:
Porter,
Going to be an interesting Fed meeting. Warsh fully understands that expanding the Fed’s balance sheet to buy more time solves nothing. It will be interesting to listen to his comments. Will he be politicized and say a lot of nothing or will he talk about his plan? If so, could be negative for the market. Has he met with Bessent? Who promised to get the deficit down to 3% during his term. Interestingly it went down nominally in 2025 to 5.75%, however it is expected to be 6.75% this year. In Argentina Milei eliminated Argentina’s 5% deficit in one year.
I get your point that more than half the voters would not vote for reducing entitlements because they depend on them. Don’t you think if they understood the long-term repercussions they would?
“The Perfect War”
Nathan A. writes:
Sorry to hear about your personal portfolio. Based on your warning earlier this year, I dumped the insurance companies and gold and moved that money to AI infrastructure… it has worked out well, for now.
Truflation shows the rate at less than 2%. With oil dropping further, even the government statistic will decline.
Porter & Co. Market Snapshot
| Price | Yesterday’s Return | Year-to-Date Return | |
|---|---|---|---|
| S&P 500 Index | $7,511.35 | -0.57% | 10.3% |
| Gold per ounce | $4,330.90 | 0.39% | 0.4% |
| Bitcoin | $65,600.64 | -1.07% | -25.7% |
| Oil (West Texas Intermediate) per barrel | $76.05 | -6.23% | 34.4% |
| Berkshire Hathaway (BRK) | $742,386.00 | 0.05% | -1.6% |
| Porter’s Permanent Portfolio | – | 0.38% | -1.0% |
| The Better Than Berkshire Index | – | 0.41% | 3.6% |
| Total Return | Annual Return | ||
| Porter & Co’s Top Ranked* | 32% | 12.9% | |
| Yield | Yesterday’s Change | Change Year-to-Date | |
| U.S Treasury 30-Year Yield | 4.97% | -4 bps | 10 bps |
*A Complete Investor risk rating of 1 is defined as a “low risk, high allocation” security, while positions rated closer to a 5 are higher risk. Porter & Co.’s top-ranked positions include those rated either 1 or 2 in Complete Investor portfolio.
Porter & Co. Top Positions
| Publication | Ticker | Description | Total Return |
|---|---|---|---|
| Complete Investor | BWXT | BWX Technologies | 245% |
| Tech Frontiers | QURE | uniQure | 237% |
| Complete Investor | ARM | ARM Holdings | 186% |
| Tech Frontiers | TGTX | TG Therapeutics | 143% |
| Complete Investor | BTC/USD | Bitcoin | 143% |
| Tech Frontiers | ROIV | Roivant Sciences | 135% |
| Tech Frontiers | QURE | uniQure | 131% |
| Complete Investor | PM | Philip Morris | 128% |
| Tech Frontiers | SGMT | Sagimet Biosciences | 116% |
| Complete Investor | WINA | Winmark | 106% |
Prices as of 4:00 pm ET June 16, 2026
Please note: The investments in our “Porter & Co. Top Positions” should not be considered current recommendations. These positions are the best performers across our publications – and the securities listed may (or may not) be above the current buy-up-to price. To learn more, visit the current recommendations page of the relevant service, here. To gain access or to learn more about our current recommendations, call our Customer Care team at 888-610-8895 or internationally at +1 443-815-4447.