Saturday, August 19, 2017

Weekend Update 8/19/17

Weekend Update

Market volatility popped up a bit this week.  People perhaps worried about Washington politics.  But perhaps just a bit edgy about future earnings and valuation.

Not a very good week for me, although I am revising the way I am grading myself.  I had been noticing that my miscellaneous portfolio was looking worse than I expected and that my dividend portfolio was looking better.  It is really because I have added a fair amount of cash to both portfolios over the past month (post retirement) and the way I did it in my spreadsheet was treating them both as leveraged.  So my dividend portfolio, which was positive, became more positive due to leverage and misc, which was negative was exacerbated.

I have fixed that.  All of this noise did not impact my MFI numbers - I had plans at the start of the year on how I was going to add $ to those portfolios and I have not deviated.

You have found your way to the MFI Diary, a blog where I let readers know my thoughts and performance on real life, real dollar Magic Formula Portfolios (based of course on "The Little Book The Beats The Market" by Joel Greenblatt.  I also spend some effort tracking hypothetical portfolios based on downloads from the official website going back to January 2006.

Of course, I have to have a disclaimer - I am just a guy with a spreadsheet and not a stock advisor.  You should do your own due diligence before acting on anything you read here.

The Past Week

Like I said, it was a tough week.

 Component   YTD 
 Overall  +6.70%
 Select  +12.61%
 Formula  +2.37%
 Miscellaneous  -1.09%
 Dividend  +10.37%
 R3K  +8.60%
 MFI Index  -4.33%


Wow,  look at the MFI Index.  Now down 4.3% on the year.  Greenblatt told it is would not work often - he may have been more right than he expected.  Here are my MFI STocks for the week.


 SYNT              18.26         18.01                       -   -1.4%
 CSCO              31.47         30.37                       -   -3.5%
 HPQ              18.90         18.51                       -   -2.1%
 GILD              72.40         72.11                       -   -0.4%
 GME              21.76         21.22                       -   -2.5%
 CA              31.99         32.37                       -   1.2%
 TGNA              21.26         20.61                       -   -3.0%
 OMC              77.75         76.76                       -   -1.3%
 CPLA              66.95         67.00                       -   0.1%
 BKE              15.60         14.05                       -   -9.9%
 RGR              50.00         49.25                       -   -1.5%
 LDOS              56.68         55.34                       -   -2.4%
 PBI              12.68         12.74                       -   0.5%

BKE really reflected retail selloff.  Not unexpected, I wrote about the likelihood of that back in February... but it seems oversold to me.  CSCO also had a tough week. Really, not much good in this table.  Here are my Select picks:


 Stock   Last Week   Current   Dividend   Change 
 ATHM              61.52         64.41                       -   4.7%
 RHI              43.41         43.33                       -   -0.2%
 YY              78.92         73.69                       -   -6.6%
 AKRX              33.31         31.98                       -   -4.0%
 AMGN            169.43       167.29                       -   -1.3%
 CA              31.99         32.37                       -   1.2%
 ICHR              19.80         20.36                       -   2.8%
 WNC              20.59         20.51                       -   -0.4%
 SIMO              43.05         42.72                       -   -0.8%
 MPAA              26.92         24.74                       -   -8.1%
 MD              43.00         42.27                       -   -1.7%
 GHC            591.10       574.70                       -   -2.8%
 WSTC              23.34         23.34                       -   0.0%
 QCOM              52.72         51.92                       -   -1.5%
 KLAC              90.34         90.26                       -   -0.1%
 MSGN              20.70         20.55                       -   -0.7%
 TGNA              21.26         20.61                       -   -3.0%
 RGR              50.00         49.25 -1.5%
 TIME              13.55         12.35 -8.9%

Hmmm, equally crummy.

MFI Select

Going to go fast today.


11/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 MPAA  $26.55 $24.74 $0.00 -6.8% 12.6%
 ATHM  $22.61 $64.41 $0.00 184.9% 12.6%
 AMGN  $145.14 $167.29 $3.15 17.4% 12.6%
 RHI  $43.23 $43.33 $0.70 1.9% 12.6%
 CA  $31.11 $32.37 $0.51 5.7% 12.6%
 Totals  40.6% 12.6%
2/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 AKRX  $19.10 $31.98 $0.00 67.4% 6.7%
 YY  $41.08 $73.69 $0.00 79.4% 6.7%
 KLAC  $85.11 $90.26 $0.00 6.1% 6.7%
 WNC  $17.65 $20.51 $0.06 16.5% 6.7%
 RGR  $52.75 $49.25 $1.15 -4.5% 6.7%
 Totals  33.0% 6.7%
5/6/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 WSTC  $24.15 $23.34 $0.00 -3.4% 1.2%
 TGNA  $25.75 $20.61 $0.07 -19.7% 1.2%
 TIME  $15.05 $12.35 $0.04 -17.7% 1.2%
 MSGN  $23.55 $20.55 $0.00 -12.7% 1.2%
 QCOM  $54.93 $51.92 $0.57 -4.4% 1.2%
 Totals  -11.6% 1.2%
8/15/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 GHC  $591.10 $574.70 $0.00 -2.8% -1.6%
 ICHR  $19.80 $20.36 $0.00 2.8% -1.6%
 MD  $43.00 $42.27 $0.00 -1.7% -1.6%
 SIMO  $43.05 $42.72 $0.00 -0.8% -1.6%
 RHI  $44.15 $43.33 $0.00 -1.9% -1.6%
 Totals  -0.9% -1.6%


Bad week for YY as they had a secondary offering to raise more cash.  Newest tranche started in a tough week, but at least is ahead.  AKRX, a stock I do not talk about much as it is being bought sank 4% this week.  That was very strange.


 Category/Tranche   August   November   February   May   Total 
 Initial Investment         25,000          25,000       25,000        25,000         100,000
 Current Tranche  -0.9% 40.6% 33.0% -11.6% 15.3%
 Previous Tranche  -0.1% 8.0% 10.7% 19.1% 15.8%
 Tranche -2  2.8% 69.4% -14.3% -25.2% 8.2%
 Tranche -3  11.2% 14.2% 8.5% 18.3% 13.0%
 Tranche -4  41.4% 43.7% 78.3% 33.0% 49.1%
 Tranche -5  14.1% 0.0% 0.0% 0.0% 3.5%
 MFI Overall Gain  82.7% 322.5% 144.0% 23.9% 143.3%
 Current Balance         45,686        105,636       61,010        30,969         243,301
 R3K Current Tranche  -1.6% 12.6% 6.7% 1.2% 4.7%
 R3K Overall Gain  88.5% 91.9% 72.6% 61.4% 78.6%
 R3K Balance         47,131          47,966       43,142        40,352         178,591
 Annualized IRR  12.8% 35.3% 21.7% 5.1% 18.7%


Back beneath 19% annualized IRR. It all candor, that it a very difficult hurdle to continuously clear.


 Date   Differential   MFI Value   R3K Value 
12/1/2012 -2.20%          99,765            101,965
1/1/2013 -1.78%        102,798            104,575
2/1/2013 -2.26%        102,594            104,856
3/1/2013 -2.23%        102,881            105,114
4/1/2013 -0.43%        106,804            107,234
5/1/2013 2.00%        110,423            108,423
6/1/2013 4.75%        115,831            111,085
7/1/2013 4.29%        114,888            110,597
8/1/2013 6.91%        124,799            117,889
9/1/2013 10.46%        124,536            114,079
10/1/2013 19.67%        138,655            118,990
11/1/2013 19.75%        143,514            123,764
12/1/2013 23.70%        150,105            126,405
1/1/2014 26.63%        157,138            130,503
2/1/2014 24.70%        150,619            125,918
3/1/2014 25.66%        158,116            132,458
4/1/2014 30.38%        162,991            132,616
5/1/2014 29.65%        162,428            132,779
6/1/2014 31.44%        167,001            135,559
7/1/2014 39.23%        177,971            138,740
8/1/2014 31.13%        167,054            135,922
9/1/2014 35.90%        177,792            141,892
10/1/2014 29.38%        168,321            138,944
11/1/2014 26.14%        168,810            142,666
12/1/2014 30.22%        176,420            146,198
1/1/2015 28.17%        174,306            146,140
2/1/2015 20.63%        162,833            142,201
3/1/2015 25.15%        175,476            150,324
4/1/2015 29.95%        178,565            148,612
5/1/2015 37.31%        186,655            149,348
6/1/2015 51.53%        202,897            151,371
7/1/2015 62.69%        211,437            148,743
8/1/2015 40.75%        192,117            151,369
9/1/2015 36.41%        178,603            142,195
10/1/2015 43.12%        181,175            138,052
11/1/2015 69.02%        217,959            148,936
12/1/2015 73.49%        223,435            149,946
1/1/2016 63.33%        209,514            146,186
2/1/2016 49.49%        187,428            137,934
3/1/2016 56.48%        194,415            137,934
4/1/2016 47.34%        195,770            148,430
5/1/2016 46.38%        194,301            147,923
6/1/2016 51.44%        201,999            150,558
7/1/2016 50.41%        201,092            150,680
8/1/2016 52.72%        207,223            154,501
9/1/2016 67.04%        222,481            155,446
10/1/2016 42.98%        198,563            155,582
11/1/2016 41.86%        195,726            153,863
12/1/2016 45.92%        202,775            156,859
1/1/2017 45.60%        209,503            163,936
2/1/2017 45.20%        212,330            167,146
3/1/2017 48.80%        222,583            173,829
4/1/2017 55.70%        229,473            173,735
5/1/2017 55.80%        231,497            175,712
6/1/2017 53.40%        230,599            177,203
7/1/2017 60.28%        239,060            178,782
8/1/2017 57.76%        239,924            182,163
Current 64.71%        243,301            178,591

August has still been good, although it does not feel good.


MFI Formula

As regular readers know, these are stocks I pick via a formula - I guess a formula applied to magic formula is formula squared.


10/3/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 CPLA  $58.15 $67.00 $1.23 17.3% 13.5%
 LDOS  $43.01 $55.34 $0.96 30.9% 13.5%
 GME  $27.70 $21.22 $1.13 -19.3% 13.5%
 PBI  $18.15 $12.74 $0.56 -26.7% 13.5%
 CSCO  $31.72 $30.37 $1.10 -0.8% 13.5%
 Totals  0.3% 13.5%
12/30/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 GILD  $71.69 $72.11 $1.04 2.0% 8.5%
 HPQ  $15.00 $18.51 $0.40 26.1% 8.5%
 TGNA  $21.33 $20.61 $0.21 -2.4% 8.5%
 CA  $31.99 $32.37 $0.51 2.8% 8.5%
 SYNT  $19.79 $18.01 $0.00 -9.0% 8.5%
 Totals  3.9% 8.5%
4/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 BKE  $18.45 $14.05 $0.50 -21.1% 2.8%
 CSCO  $33.76 $30.37 $0.58 -8.3% 2.8%
 GILD  $67.50 $72.11 $0.52 7.6% 2.8%
 OMC  $85.53 $76.76 $0.55 -9.6% 2.8%
 SYNT  $16.76 $18.01 $0.00 7.5% 2.8%
 Totals  -4.8% 2.8%
7/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 CSCO  $30.98 $30.37 $0.00 -2.0% -0.2%
 GME  $20.95 $21.22 $0.00 1.3% -0.2%
 HPQ  $17.60 $18.51 $0.00 5.2% -0.2%
 RGR  $60.70 $49.25 $0.23 -18.5% -0.2%
 SYNT  $16.21 $18.01 $0.00 11.1% -0.2%
 Totals  -0.6% -0.2%
 Category/Tranche   October   January   April   July   Total 
 Initial Investment      249,820        249,939     250,180      249,728         999,667
 Current Tranche  0.3% 3.9% -4.8% -0.6% -0.4%
 Previous Tranche  5.5% 9.3% 25.2% 26.7% 16.2%
 Tranche -2  0.5% 11.0% -0.2% -12.5% -0.3%
 MFI Overall Gain  6.3% 26.0% 18.9% 10.3% 15.4%
 Current Balance      265,534        314,994     297,360      275,355      1,153,243
 R3K Current Tranche  13.5% 8.5% 2.8% -0.2% 6.2%
 R3K Overall Gain  28.2% 21.2% 20.0% 16.2% 21.4%
 R3K Balance      320,300        303,049     300,168      290,176      1,213,692
 Annualized IRR  2.1% 9.2% 7.5% 4.7% 5.9%

Just a struggle as you can see.  In aggregate my current tranches are now negative,  My formula approach is mirroring much more closely (than my select approach) the MFI tracking and MFI Index.  My 12 open tracking portfolios are down an average of 3%. Guess I should feel good about -0.4%!


 Date   Differential   Value   R3K Value 
10/1/2014 0.00%        100,000            100,000
11/1/2014 1.63%        102,288            100,658
12/1/2014 0.30%        101,375            101,075
1/1/2015 -0.33%        100,664            100,995
2/1/2015 1.67%        101,281              99,611
3/1/2015 3.62%        106,073            102,454
4/1/2015 5.09%        106,781            101,695
5/1/2015 5.78%        107,859            102,077
6/1/2015 5.08%        108,213            103,134
7/1/2015 4.82%        106,423            101,604
8/1/2015 3.71%        107,112            103,404
9/1/2015 4.38%        101,523              97,139
10/1/2015 6.39%        100,703              94,312
11/1/2015 2.93%        104,835            101,907
12/1/2015 -3.48%          99,443            102,926
1/1/2016 -3.36%          96,830            100,012
2/1/2016 -0.72%          93,797              94,367
3/1/2016 4.07%          98,588              94,367
4/1/2016 0.34%        102,371            101,548
5/1/2016 -1.91%          99,774            101,200
6/1/2016 -0.42%        103,145            103,568
7/1/2016 -0.19%        103,022            103,216
8/1/2016 2.56%        109,419            106,857
9/1/2016 -0.34%        106,704            107,048
10/1/2016 -0.85%        106,377            107,230
11/1/2016 0.42%        105,421            105,003
12/1/2016 1.62%        110,705            109,088
1/1/2017 1.57%        113,406            111,832
2/1/2017 1.32%        114,809            113,486
3/1/2017 -5.09%        112,930            118,024
4/1/2017 -1.86%        116,227            118,091
5/1/2017 1.11%        120,403            119,296
6/1/2017 -2.65%        117,824            120,472
7/1/2017 -2.40%        119,144            121,545
8/1/2017 -1.96%        121,873            123,828
Current -6.05%        115,324            121,371

Falling further and further behind.

Dividend Portfolio

I continue to shovel $ in this direction aggressively to build up retirement income stream.  That being said, keep in mind that with the selling of my former employers stock I am still north of 60% cash in total.

 Stock   Initial   Current   Div/Sh   Gain/Loss   Yield 
 FDEU          18.40          18.52            0.36 2.6% 7.8%
 LADR          13.01          13.54                 -   4.1% 8.9%
 NS          41.04          38.22                 -   -6.9% 11.5%
 PSXP          47.39          46.53            0.38 -1.0% 5.3%
 JQC             8.20             8.46            0.60 10.5% 7.4%
 TK             5.24             8.92            0.06 71.1% 2.5%
 OIBAX             5.85             5.96            0.38 8.3% 4.0%
 FSFR             8.68             8.60                 -   -0.9% 8.8%
 KCLI          49.32          49.30            0.27 0.5% 2.4%
 DSL          19.47          20.45            1.05 10.4% 8.8%
 ISBC          13.15          12.90            0.08 -1.3% 2.5%
 RILY          15.58          15.35            0.13 -0.6% 1.7%
 VTIBX          10.92          10.93                 -   0.1% 1.1%
 EVG          14.49          14.43                 -   -0.4% 6.4%
 TGONF          10.91          12.55            1.76 31.2% 5.6%
 NRZ          16.22          16.55            0.38 4.4% 12.1%
 SBRA          23.53          20.71            0.29 -10.8% 8.3%
 BCRH          19.93          19.35                 -   -2.9% 6.2%
 GLDI             9.23             9.26                 -   0.3% 5.7%
 DHF             3.34             3.49            0.09 7.2% 8.1%
 BKE          14.15          14.05                 -   -0.7% 7.1%
 O          25.14          56.85         20.39 207.2% 4.5%

I did add BKE as a dividend stock. Smallish position (recall these are in descending order.