Strong gains since the strategy's launch
Data reveals that the Dow Jones Control Now strategy has maintained an exceptionally strong track record since its launch on January 1, 2013, achieving a cumulative return of 838.3%, compared to just 291.5% for the benchmark index, with an average annual return of 18.2% and a Sharpe ratio of 0.90—indicators that clearly demonstrate a combination of growth and discipline. Furthermore, its focus on only 10 stocks within the Dow Jones Industrial Average gives it a highly selective approach rather than a diffuse strategy with a large number of stocks.
The June update confirms that ProPicks AI doesn't treat the portfolio as a static list, but rather as a dynamic structure that changes monthly based on market conditions and the most attractive opportunities. At the heart of this update is the decision to remove IBM stock after it gained 34.4% since being added to the strategy. This clearly demonstrates that the algorithm doesn't hold a stock simply because it's profitable, but only as long as it maintains a relative advantage over available alternatives.
IBM's delisting decision: A gain achieved, a role ended
What's striking about IBM's case is that its delisting wasn't due to a stock failure or a sudden decline in performance, but rather followed a remarkable 34.4% rise since its inclusion in the Dow Jones Industrial Average. This is precisely the essence of ProPicks AI's philosophy: it doesn't just identify promising stocks early on, but tracks their performance and re-evaluates them monthly to determine whether they still deserve a place in the portfolio or if there are stronger alternatives.
The rationale section explains that the model found slightly stronger alternatives to IBM in terms of price performance, valuation, and growth. The observations also indicate that the stock was now trading at a value very close to, or slightly above, the fair value estimated by the model, meaning that the potential upside is narrowing compared to other names within the index.
The same analysis adds that the price-to-book ratio reached 8.5 times, a relatively high figure compared to other companies with faster organic growth or greater revaluation potential. While IBM offered positive signals, such as exceeding first-quarter earnings estimates and a nearly 13% increase in free cash flow, along with a $1 billion government grant from the CHIPS Act to support its quantum computing efforts, these positives were not enough to keep it in the portfolio compared to available alternatives.
