David Hay — Portfolio Update: Post-Labor Day Edition

The admission — "among the less than stellar suggestions this newsletter offered up this year"

• The section opens by naming the loser before defending anything: Accenture, "one of the planet's largest and most profitable IT consulting firms," "did a face-plant almost right out of the gate."
• The dates and prices are given precisely enough to be checked: endorsed "on May 8th when it was trading at $178 and change," and "about six weeks later, it had crashed to $125."
• The tone is set as accountability rather than explanation: "we are, understandably, embarrassed when they occur to our showcase names."

Error one — mistaking a prior fall for a floor

• "We thought plenty of adverse news was priced in at $178. At that point, it had already plunged from $385."
• The reasoning is quoted back with its own joke attached: "as the old Wall Street saying goes, we were highly confident it would not implode by another $200 points. (Stocks, unlike futures contracts, can't trade below zero.)"
• What followed: "that prior shellacking didn't prevent another 30% value evaporation" — with the market conditions offered as context, not excuse ("in a hair-trigger market such as the one we've been in… that's not a total shock").

Error two — ignoring the support break (the house rule restated)

• "Making this situation worse, we ignored the bad omen from the clear support break [ACN] produced when it decisively broke below $250."
• The rule it violated is the symmetric one Haymaker returns to constantly: "as we have often pointed out, violations of support levels are as meaningful as breaking above multi-year resistance."
• The mitigation is thin and admitted to be thin: "our only defense in this regard is that it had already melted by nearly 30% after that support was taken out."

Error three — not averaging in at nine times earnings

• "Piling poor judgment on poor judgment, we didn't recommend averaging in as we often do when this type of cliff dive happens."
• The missed opportunity is quantified: ACN "was trading at truly garage-sale prices when it hit nine times earnings."
• Note the structure of the three errors — an entry error, a discipline error and a follow-through error — each attached to a rule the newsletter already had.

What actually closes the position — pricing power, not the chart

• The valuation still argues for holding, and is said so explicitly: "notwithstanding the hefty revival, it remains a very cheap stock… we don't like exiting these deep-value situations — especially for what has long been an outstanding company."
• The thesis-breaker is qualitative: "our confidence level in it retaining that hallowed status is eroding," "amplified by a recent Financial Times article which asserted, with factual back-up, that its customer base is growing more and more restless."
• The specific fact matters more than the headline: "defections seem manageable at this point, but what concerns us is that a large number apparently are demanding price concessions to stick with ACN" — margin erosion, not revenue loss.
• And it is cross-checked before acting: "ironically, searching on the issue with Google's AI app, Gemini, verifies this risk."

The sell, and why the flat exit is treated as a gift

• "Net/net, we've decided to put out one of our rare full sells on this name."
• "It's now at least a push. That's a big relief after its disastrous start, so we're inclined to raise some cash on a pain-free basis" — i.e. the round trip back to breakeven is what makes the exit cheap, and cheapness of exit is itself a reason to take it.
• The macro reasons for wanting the cash are calendar-shaped: "we continue to worry the market overall is facing intensifying head-winds"; "we're entering hurricane season. Market history is rife with examples that this is not just a meteorological phenomenon"; and "an upcoming mid-term election that has the very real potential to be messy in the extreme is another reason to raise some cash… while the raising's good."

MPLX — the counter-example, and what an "inflation-hedged income name" means

• "A much happier outcome involves one of our former inflation-hedged income names."
• The category is defined in a parenthesis: "with yield-oriented income securities like MPLX, that historically have raised their payouts at a rate at least equal to inflation, their return isn't reduced by CPI increases, unlike with bonds."
• The origin is disarmingly told: "frankly, we'd forgotten that, two and half years ago, we had lumped this yield play, with growth attributes, together with a bullish take on the NASDAQ and several of its shooting stars."

The 2024 breakout trio — META, MSFT and the chart that wasn't run

• "To justify that upbeat view, we included charts showing breakouts above multi-year ceilings for META (the former Facebook) and MSFT."
• Google was included in words but not in pictures: "we also expressed our fondness for Google (GOOG; forget that stupid 'Alpha' handle), despite, or because of, what we thought was an overreaction to a decent earnings release… we did convey that it, too, had achieved an upside range expansion."
• The irony is the lesson: "because that was the one graphic we didn't run at the time, GOOG's chart was the most bullish of the three. Our hesitance was due to the fact it hadn't clearly broken out yet. As you can see, it did so in the spring of 2024, and after that it was moonshot time" — apart from "a couple of brief altitude losses, primarily around Mr. Trump's infamous Liberation Day."
• The purpose is stated outright, along with the reader objection it anticipates: "the main reason for this tangent was to once again reinforce… the importance of these events… most who follow our work feel we are either misguided or obsessed, or both, with this subject. Our best counter is to let the facts speak for themselves."

The Magnificent Double Nine

• MPLX qualified on both legs of the same test — technical and fundamental: it "was also experiencing a definite upside range expansion in early February of 2024… threatening to make an eight-year new high," and "shortly thereafter, it did indeed break above that resistance."
• "Moreover, its fundamentals were compelling in early 2024. That's almost always a winning combination. …it was trading at a bit over nine times earnings and it was also sporting the munificent distribution yield of 9%. Back then, we referred to that as a Magnificent Double Nine."
• An under-appreciated detail: it "remains well below its 2015 peak of $78, despite that its earnings per share/unit have more than tripled" — a de-rating, not an over-extension.

The scoreboard — 93.7% vs 61% vs 95.7%

• "Few in those days would have guessed the decidedly unsexy MPLX would trounce the S&P over the next two and a half years (plus a month) while nearly matching the stupendous performance of the Magnificent Seven."
• Total returns including dividends: MPLX 93.7% · S&P 500 61% · Magnificent Seven 95.7% (with the footnote that "technically, pass-through entities like MPLX generate distributions").
• The risk-adjusted framing is the real claim: "particularly adjusting for its high cash flow/low risk attributes."

Forward — "the easy answer is: a lot less"

• "Unquestionably, MPLX has been a spectacular performer… the question is what to expect going forward? The easy answer is: a lot less."
• "Does this make it a trim or sell candidate? …That's a much tougher one" — and note the scoping aside: "our official Buy/Hold/Trim/Sell tables are made up of growth, versus income, equities," so MPLX never appears on them.

Why the answer is tax rather than valuation

• In an IRA: "which is often sub-optimal depending on how big the position is, at least a partial sale might make sense," because "owning MLPs, such as MPLX, in an IRA can result in taxable income" — with the caveat to "consult your tax advisor" before disposing.
• In a taxable account: "selling is a much tougher decision than normal. In addition to the considerable price appreciation, there is also the aspect of recapturing previously tax-sheltered payouts. Those are typically 60% to 70% of the total distributions."
• For older holders: "the tremendous benefit of a stepped-up basis at death. This also avoids the gain on the previously sheltered distributions," and "if owned jointly with your husband or wife, the death of either spouse creates a significant tax benefit for the survivor. Remember this the next time your accountant says you owe an extra $100 or $200 for preparing your taxes due to the K1!"

The verdict on MPLX — trim a bit, but the income case is intact

• "With all of the above qualifications, trimming a bit of MPLX might now make sense."
• "On the stick-with-it side, it continues to yield over 7% and it has raised the payout by 9% a year since we brought it to your attention. That's better than the 7% we projected though the growth rate is supposed to ease off a bit."

The published tables — one exit and three date corrections

• Sells: "ACN added" — cost $178.31, price at sale $178.26, −0.03%, sell date 09/08/2026, alongside the standing exits EWY (+166.87%), GS (+133.86%), IBM (+49.37%) and XOM (+34.93%).
• Buys housekeeping: "PALL Second Buy date corrected" (now 10/08/2025 at $23.93, rated SB) and "J original Recommendation date added" (03/25/2024 at $127.16).
• Holds/Trims housekeeping: "BA revised to reflect 03/13/2026 recommendation date" (cost $210.00, marked $211.59).
• Otherwise the tables are unchanged in membership — no new Buy-list additions this week, which is itself consistent with the "raise some cash" stance.