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The Asymmetric Quality Index tracks 25 high-quality large-cap companies (minimum $2B market cap), but here's the twist: instead of equal weighting or market cap weighting, each stock’s position is set according to my personal assessment of its asymmetric potential – the balance I see between possible upside and downside.
The index serves two purposes.
First, it tracks the performance of quality businesses.
Second, and perhaps more important, it helps identify where I see the most compelling asymmetry.
Rank the holdings by asymmetry score (far right column) and you’ll spot this month’s biggest movers. Compare their new rankings to their original weightings and patterns emerge.
This is how the index naturally works. Quality companies that fall in price become more asymmetric, earning higher positions in next month’s rebalancing.
This week’s big news: the CEO resignation at CSU.
The market’s reaction has been swift, hitting not just CSU but also its spinoffs TOI and LMN.
The price drops have made the asymmetry considerably more favorable across all three in my opinion.
My view? The market has this wrong. These businesses were built to operate independently. The spinoffs never relied heavily on Leonard’s leadership anyway. Each can stand on its own merits.
I’m reviewing whether to add to any of these positions this week.
This information will be available to paid subscribers only.
What You Get
Free subscribers see:
Monthly AQi performance vs benchmarks
Top-ranked stocks and biggest movers
Which companies entered or left the index
My analysis on why rankings shifted
Premium subscribers get additional context and deeper insights:
My actual portfolio holdings (which often differ significantly from AQI weightings)
Small-cap positions and specialized plays - I analyze lots of companies, and quite a lot of my portfolio holdings are much more asymmetric than this large-cap list, but they’re smaller market caps reserved for paid subscribers only
The ‘off-index’ companies that I personally find most interesting.
Detailed reasoning behind position sizing differences
For those interested in upgrading, annual plans are 34% cheaper - a good deal for those that like value.
We hope you found this post useful.
Have a great week,
Dom
Schwar Capital
Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute financial, investment, or other professional advice. The opinions expressed here are those of the author and do not necessarily reflect the views of Schwar Capital. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The author may or may not hold positions in the stocks or other financial instruments mentioned. Always do your own research or consult with a qualified financial advisor before making any investment decisions. To read our full disclaimer, click here.