Berkshire Hathaway Inc (BRK.B)

[JLS]

Re XLSV,

I was wondering why XLSV strongly outperformed $SPX starting in early November, 2016. My thought was that if I knew what moves a market then I should be able to trade (AKA invest in) it more intelligently.

Knowing that the S&P SmallCap 600 Low Volatility Index would likely consist of very large companies which tend to have low volatility most of the time, and knowing (in hindsight) that the index took off in early November, I wondered which major sector would have that same characteristic. Easy: financials. It was in the news everywhere and often that the financial sector took off as it seemed (and happened) that Trump would (and did) win the election. Financial stocks are usually of low volatility, but their volatility spiked higher as those stocks reacted to the election.

So I looked up the symbol for that Index I mentioned in the previous paragraph, and it is SP6LVI. Then I looked at its holdings. The top 10 constituents by index weight are listed at the first link below. Seven of those 10 are financial stocks. One of those seven is actually described as Real Estate, but I consider real estate as being a form of money, a type of money that changes hands (or converts to other forms of money) slowly.

To test the theory, I added XLF to the Stockcharts' Perf chart I posted in an earlier post, and which compared $SPX to XSLV. Bingo! The link to the new Perf chart is the last link below.

https://us.spindices.com/indices/strategy/sp-smallcap-600-low-volatility-index

http://tinyurl.com/hoq3sdw