Saturday, December 30, 2006

Year End Positions

Current Portfolio
Stock Cost Current Gain
PNCL $6.68 $16.85 152.2%
UST $39.36 $58.20 53.6%
TGIS $10.34 $15.04 46.9%
ASEI $45.85 $59.51 29.8%
VPHM $11.80 $14.64 24.1%
PGI $7.71 $9.44 22.4%
MSTR $94.36 $114.01 20.8%
BBSI $19.56 $23.42 20.1%
CHKE $37.55 $42.91 19.5%
ANF $61.13 $69.63 14.8%
MTEX $13.11 $14.73 14.2%
MGLN $38.34 $43.22 12.7%
BLDR $15.91 $17.83 12.1%
ELX $17.85 $19.51 9.3%
ISNS $13.17 $14.32 8.7%
FTO $28.76 $28.74 0.4%
DLX $26.36 $25.20 -1.0%
RAIL $58.18 $55.45 -4.5%
PONR $30.48 $28.66 -6.0%
PACR $32.53 $29.77 -7.1%
KG $17.31 $15.92 -8.0%
TBL $34.50 $31.58 -8.5%
TRLG $17.02 $15.31 -10.0%
PTEN $26.72 $23.23 -12.4%
ORCT $11.83 $9.69 -18.1%
HW $33.04 $23.96 -27.5%
EZEN $2.84 $2.03 -28.4%
FDG $34.03 $20.75 -31.9%
OVTI $27.79 $13.65 -50.9%




Current Gain/Loss ($) $24,497
Current Gain/Loss (%) 7.5%
Sold Gain/Loss ($) $9,442
Sold Gain/Loss (%) 23.5%
Total Gain/Loss ($) $33,939
Benchmark Gain/Loss ($) $34,067
Annual IRR 16.5%
Total Gain/Loss (%) 10.7%

Friday, December 29, 2006

Year End Ramble

Not a great day for my MFI portfolio. I'll post official numbers in a bit, but I think I ended 2006 ever so slightly behind the benchmark Russell 3000. I thought I'd get on my soapbox and say a few words today, as we head into 2007.
  • I think the best think about MFI is that it is a disciplined approach to investing. Morningstar just began posting "dollar weighted returns" along with their more typical 3 and 5 year returns (Morningstar - MarketWatch). The DWR reflects how people invest, rather than hold for 3 or 5 years, people are always chasing the hot mutual fund or sector and thus tend to under-perform the averages. Before MFI, I think that was my biggest fault as an investor - I got emotional. I would sell a stock based upon an article or some bad news. In the bubble I did my share of chasing hot sectors. Now I have a plan. Thank you MFI.
  • I think an important element for anyone considering MFI in 2007 is to have realistic expectations. When you read TLBBTBTSM you can start seeing dollar signs around your eyes as he talks about 2% and even 30% backtested returns. That is well and good, but even if we can beat market indices by 3 points anually, we are doing better than 95% of investors out there... and may I mention getting rich slowly!
  • I think George Banks, from Mary Poppns, is probably like many of us. We need to learn his lessons and slow our lives down - spend time with our children, go fly a kite and feed the birds while helping those less fortunate.
  • I think we should strive to be an optomist, per James Stewart's Common Sense column (Common Sense). It helps you get through tough stretches of the market.
I see where the NYSE will be closed an unusual 4 straight days. Not sure why they're closed on Tuesday... I'll have to go to work! I guess they've had a good year.

Having healthy debates on the Yahoo board. Just like everywhere in life, you have traditionalists and those who want to spread their wings. I suppose I try to follow the spirit of JG's MFI approach, though I have broken a few rules along the way. I figure its my money, so I get to call the dance.

My first hypothetical portfolio will be "fini" in a week. I will post the results then, with every stock included. It does have a slight lead on the Russell Value index and a bigger lead on Russell 3000 (about 3%).

Below I show my weekly graph. Remember, the Magenta line represents my gains while the blue line is the Russell 3000. Not sure if I'll "blog" tomorrow. If not, I wish all a happy and healthy New Year!

Thursday, December 28, 2006

Shall We Orct?

I was so excitied when ORCT climbed above $11 a few eeks ago and I was actually in the black for a nano-second or two. It went up for no reason that I could fathom... and since then it has gone back down.

Here is the chart... it is real time, so in a month in won't be as meaningful, but I like the direct copy graphics more:

ORCKIT COMM LTD (NasdaqGM) Edit
Range:1d 5d 3m 6m 1y 2y 5y max Type:Bar | Line | CdlScale:Linear | LogSize:M | L
Compare:ORCT vs S&P Nasdaq Dow
Chart
Chart

At least it isn't down as far as it was. Seems like a semi-random walk. Where do you think it'll go next?

I have managed to avoid the temptation to sell some of my big losers (like OVTI & FDG) for tax purposes. We'll see how that plays out in 2007.

I did read SmartMoney Magazine today on my return flight from NYC. Almost a year ago was when I read in SMM about TLBBTBTM. Ironically, in the mag today they did a hindsight look on their various magazines through 2006. They said that the 7 stocks they profiled in the Feb 2006 magazine from selecting the MFI stocks were their best picks of the entire year. They said the picks didn't just beat the market, they "shellacked" the market. By a margin of 28%!

Are you a believer yet? I am! Cue the Monkees (re-made famous by a green ogre):

I thought love was only true in fairy tales

Meant for someone else but not for me.

Love was out to get me

That's the way it seemed.

Disappointment haunted all my dreams.


Then I saw her face, now I'm a believer

Not a trace of doubt in my mind.

I'm in love, I'm a believer

I couldn't leave her if I tried.


I thought love was more or less a given thing,

Seems the more I gave the less I got.

What's the use in tryin'?

All you get is pain.

When I needed sunshine I got rain.


Then I saw her face, now I'm a believer

Not a trace of doubt in my mind.

I'm in love, I'm a believer

I couldn't leave her if I tried

Wednesday, December 27, 2006

Back to Work!

Had a great Christmas vacation in NYC. Highlighted today by seeing Mary Poppins. Great show if you get a chance.

My MFI portfolio is maintiaining its lead of a bit more than $2,000 over the benchmark Russell portfolio. It feels great to be ahead. Amazing, I looked and saw that PNCL is still in the top 25 MFI stocks over 100m in market cap, despite being up 150% for moi. That seems remarkable. It must have REALLY been cheap.

Not much news about my stocks, been a slow news week in the financial world. Here is how everything stands right now:

Current Portfolio
Stock Cost Current Gain
PNCL $6.68 $16.97 154.0%
UST $39.36 $58.39 54.1%
TGIS $10.34 $15.25 48.9%
ASEI $45.85 $61.25 33.6%
MSTR $94.36 $116.91 23.9%
VPHM $11.80 $14.48 22.7%
PGI $7.71 $9.41 22.0%
CHKE $37.55 $43.70 21.6%
BBSI $19.56 $23.70 21.5%
MTEX $13.11 $15.40 19.3%
ANF $61.13 $70.04 15.4%
MGLN $38.34 $43.60 13.7%
BLDR $15.91 $17.92 12.7%
ELX $17.85 $19.51 9.3%
ISNS $13.17 $14.17 7.6%
FTO $28.76 $29.30 2.3%
DLX $26.36 $24.71 -2.8%
PONR $30.48 $29.96 -1.7%
RAIL $58.18 $55.97 -3.6%
TRLG $17.02 $15.96 -6.2%
PACR $32.53 $30.00 -6.4%
TBL $34.50 $32.06 -7.1%
KG $17.31 $16.06 -7.2%
PTEN $26.72 $23.77 -10.4%
ORCT $11.83 $9.96 -15.8%
HW $33.04 $24.36 -26.3%
EZEN $2.84 $2.01 -29.1%
FDG $34.03 $21.70 -31.5%
OVTI $27.79 $13.99 -49.7%




Current Gain/Loss ($) $28,837
Current Gain/Loss (%) 8.8%
Sold Gain/Loss ($) $9,442
Sold Gain/Loss (%) 23.5%
Total Gain/Loss ($) $38,279
Benchmark Gain/Loss ($) $36,158
Annual IRR 18.9%
Total Gain/Loss (%) 12.1%

Saturday, December 23, 2006

All You Need is Love

There's nothing you can do that can't be done.
Nothing you can sing that can't be sung.
Nothing you can say but you can learn how to play the game
It's easy.
There's nothing you can make that can't be made.
No one you can save that can't be saved.
Nothing you can do but you can learn how to be in time
It's easy.
All you need is love, all you need is love,
All you need is love, love, love is all you need.
I am at Times Square. Saw Beatlesmania at BB King's Blues Club today. Still in a fine mood from the PNCL move on Friday.

Large vs Small

Amazing but true: my small stocks are doing much better than big brethern. So far my small stocks (under $1b MC when bought) are up 16%. Large caps are up just 0.6%, without dividends they're underwater. Should I buy small stocks more often? They are more likely to be bought, that is certainly juicing the short-term returns. The large cap return is pretty dismal. Hmmm?

Ramble

Not much else going on as we countdown to Christmas and then New Years Eve. It was a fantastic year for my portfolio. I am up over 28% while the markets are up about 12 to 13%.

Most of the pundits seem pretty bullish about 2007. Hard to get excited about that. Fact is they really don't know.

Investing Resolutions

Here are my plans for 2007:
  • Trade less often - Fidelity won't be happy
  • Maintain 3 legged approach of MFI, International Stocks and Finance/Insurance.
  • Try to increase overall yield of portfolio (currently about 1.5%)
  • Pare back MFI stocks to about 25 (more $ in each)
  • Find enough dollars from everyday CF to buy at least one more MFI stock.
  • Keep about 10% of entire investments in cash.
  • Max out IRAs and 401K.
  • Consider buying some land.
I hope these resolutions last longer than my typical New Year resolutions!

Friday, December 22, 2006

Unbelievable

I have been investing for more years than I care to admit. But I am sure that I have never had a stock go up over 50% in a single day. That is what PNCL did today. I knew the news was good last night, but never thought it was THIS good. Unbelievable.

I am super-dee-duper glad I didn't follow my instincts last week and well to lock up a 60% gain since purchase. I now have over a 150% gain. Caused a firey debate on the Yahoo Groups MFI board. Should people encourage other investors to "break" the rules? Should we be following the MFI rules to the letter or in spirit? And if in spirit, where do we draw the line?

Here is my list of stocks and my gains per stock:

Current Portfolio
Stock Cost Current Gain
PNCL $6.68 $16.75 150.7%
TGIS $10.34 $15.80 54.7%
UST $39.36 $57.43 51.7%
ASEI $45.85 $60.89 32.8%
VPHM $11.80 $14.39 21.9%
MSTR $94.36 $114.80 21.7%
CHKE $37.55 $43.67 21.5%
BBSI $19.56 $23.48 20.4%
ANF $61.13 $71.16 17.3%
PGI $7.71 $9.04 17.2%
MTEX $13.11 $15.06 16.7%
MGLN $38.34 $43.18 12.6%
ELX $17.85 $19.69 10.3%
ISNS $13.17 $14.10 7.1%
BLDR $15.91 $17.01 6.9%
FTO $28.76 $29.73 3.7%
DLX $26.36 $23.84 -6.1%
RAIL $58.18 $54.09 -6.9%
TBL $34.50 $31.82 -7.8%
TRLG $17.02 $15.68 -7.9%
KG $17.31 $15.90 -8.1%
PACR $32.53 $29.11 -9.1%
PONR $30.98 $28.15 -9.1%
PTEN $26.72 $23.53 -11.3%
ORCT $11.83 $10.23 -13.5%
FDG $34.03 $22.93 -27.9%
HW $33.04 $23.69 -28.3%
EZEN $2.84 $2.01 -29.1%
OVTI $27.79 $13.66 -50.8%




Current Gain/Loss ($) $24,529
Current Gain/Loss (%) 7.5%
Sold Gain/Loss ($) $10,050
Sold Gain/Loss (%) 25.0%
Total Gain/Loss ($) $34,579
Benchmark Gain/Loss ($) $31,336
Annual IRR 17.5%
Total Gain/Loss (%) 10.9%



So with the massive gain on PNCL, my MFI portfolio has offiically passed the IWV portfolio... yes, it feels great.

Thursday, December 21, 2006

Good News?

On vacation, so extreme quickie here. I did see where two stocks had some seemingly good news:

ISNS - Announced they have a new CEO (Image Sensing Systems Announces New CEO). For some reason that caused a sharp spike in the stock.

PNCL - announced they have a new LT deal with Northwest (Pinnacle Airlines Corp. Announces Amended Airline Services Agreement With Northwest). It was AH, but I expect that this will spike the stock up tomorrow. Glad I didn't sell!

Here is my stock ranking for the upcoming quarter:

Rank Stock 12/18 Price
1 ANF 68.26
1 BBSI 23.49
1 BLDR 17.78
1 HW 23.68
1 OVTI 14.31
1 PACR 29.66
1 RAIL 54.11
1 TRLG 15.42
2 ASEI 63.64
2 CHKE 43.13
2 DLX 23.99
2 ELX 20.24
2 EZEN.OB 2.01
2 FDG 23.17
2 FTO 30.34
2 ISNS 13.1
2 MGLN 42.56
2 MSTR 112.31
2 MTEX 15.62
2 ORCT 10.35
2 PGI 9.09
2 PONR 29.02
2 PTEN 24.37
2 TBL 31.99
2 UST 56.89
3 KG 16.11
3 PNCL 10.97
3 TGIS 15.86
3 VPHM 15.06


Have fun! We are!

Tuesday, December 19, 2006

Christmas Break


Well, I am off on a mini-Christmas Break to Times Square tomorrow afternoon. This blog will likely be placed on hold. I did rank my stocks 1/2/3 this morning. I don't have the comprehensive list in front of me. I know I scored OVTI, HW & TRLG as "1"s while PNCL and VPHM were "3"s. I did mark down the prices at the time of my ranking. I'll probably post it all here when I get back from NY.

Very flat day for me today. Did get some good news from UST. They raised guidance for 2007 and increased their annual dividend (UST Presents Plans for 'Building Momentum,' Projects 10+ Percent Total Shareholder Return In 2007 Based On Record EPS and 5.3 Percent Dividend Increase). I really like UST. Just the steady decent yield that appears to a geriatic like myself!

Monday, December 18, 2006

10.23%!?

Wow, MTEX went up over 10% today. I thought being added to an index would be worth 5 to 6% tops. But you know why it went higher?? I think it was the staggering 20% short ratio on MTEX. I didn't realize the short ratio was so high. Makes me wonder if other of my MFI stocks have a high short ratio.

Hmmm.
HW is 17%
TRLG is 46.5%!!!!
ASEI is 25%

Those appear to be my "leaders". It stuns me that 46% of TRLG would be held short. That is a lot of negative sentiment. If TRLG has good news any time soon, the stock will explode up. Do the shorts know something I don't know? The ratios are a bit dated (about a month old). It doesn't make me nervous to see the ratios, by definition MFI stocks are out of favor often.

My overall portfolio was down 0.39%. It was anything to do with energy (PTEN, FDG & FTO) that led the way down.

I did sell my EZEN position in my sidecar today at $2.05. I actually did this for tax purposes. I had my EZEN in my brokerage account, which I had tagged as part of my MFI portfolio. I had bought that at $2.84. Then I had EZEN in my IRA that I was counting as my sidecar which I bought at about $1.50. To close my "sidecar" I actually sold the EZEN in my brokerage account. That way I get the capital loss for 2006 while the gains in my sidecar will be in my IRA. In tracking for my MFI portfolio, it will not show that I have sold it, rather I transferred my holdings simply from my brokerage account to my IRA. (I also have PONR, PNCL, PGI, PACR, PTEN and TBL in my IRA as well... it was a "run" on the "P"s.)

Finally I looked at my scoring of stocks at the end of Sep as "1s, 2s and 3s". I did great. My 1s are up 15%, the 2s are up 11% and the 3s are down 5%. I will consider that the end of that round of the expirement and will place new rankings on my stocks tomorrow (if I have time) for the upcoming quarter. Enoough tests and we'll find out whether I am clueless or not. Any opinions?

Sunday, December 17, 2006

If I had a Million Dollars....

If I had a million dollars, would I give it to a hedge fund manager? I was watching TV on Friday and they were talking about Christmas bonuses on Wall Street. As JG himself would say, "sheesh"! (Jaw-Dropping Bonuses on Wall Street). The average bonus at GS is $622,000. Now those guys work hard, have very stressful jobs and are undeniably smart. The ones who get my goat are the hedge fund guys. I don't quite see how they are creating value in today's society, yet they make the people in "Bonfire of the Vanities" look like Mother Theresa.

Think about it this way, I paid Vivian Lewis $129 for her most excellent newsletter on international stocks. I am up 30%. Suppose I had invested $1m with her recommendations (in my dreams). I'd be up 300,000 less my $129. If I had been with a hedge fund and I was up 30% (I'll bet many are not up that much), I would pay 1% of my investment ($10,000) plus 20% of gains exceeding say 20% (about another $20,000). So the hedge fund would be $30,000 more. plus, they are really incented to take risks with my money as (1) they get bigger payments and (2) they risk losing me if they are just average... so I'd bet you dollars to do-nuts their results will be much more volatile. Sheesh!

Just a couple quick lists for the time capsule. The first is my current MFI portfolio sorted by performance. The 2nd list is the most recent top 50 over 100m. It is strange, when I make my lists in OpenOffice, they come into Blogger perfectly. But if I save them in Excel they aren't formatted properly. Weird.

Current Portfolio
Stock Cost Current Gain
PNCL $6.68 $10.98 64.4%
TGIS $10.34 $15.33 50.1%
UST $39.36 $56.41 49.1%
ASEI $45.85 $65.81 43.5%
VPHM $11.80 $15.01 27.2%
BBSI $19.56 $23.56 20.8%
MSTR $94.36 $113.09 19.8%
PGI $7.71 $9.19 19.2%
CHKE $37.55 $42.06 17.2%
ANF $61.13 $69.39 14.4%
ELX $17.85 $20.08 12.5%
BLDR $15.91 $17.82 12.0%
FTO $28.76 $31.94 11.4%
MGLN $38.34 $42.60 11.1%
MTEX $13.11 $14.17 9.9%
ISNS $13.17 $13.11 -0.5%
PTEN $26.72 $25.51 -3.9%
RAIL $58.18 $55.01 -5.3%
PONR $30.98 $29.29 -5.5%
KG $17.31 $16.28 -6.0%
DLX $26.36 $23.88 -6.0%
PACR $32.53 $30.07 -6.2%
TBL $34.50 $32.00 -7.2%
TRLG $17.02 $15.50 -8.9%
ORCT $11.83 $10.64 -10.1%
FDG $34.03 $23.98 -24.8%
HW $33.04 $24.08 -27.1%
EZEN $2.84 $2.00 -29.5%
OVTI $27.79 $14.49 -47.9%




Current Gain/Loss ($) $20,533
Current Gain/Loss (%) 6.3%
Sold Gain/Loss ($) $10,050
Sold Gain/Loss (%) 25.0%
Total Gain/Loss ($) $30,582
Benchmark Gain/Loss ($) $37,139
Annual IRR 15.9%
Total Gain/Loss (%) 9.7%

Top 50 companies with a minimum market cap. of $100 million
Companies are listed in alphabetical order
Name (in alphabetical order) Ticker Market Cap
($ Millions)
Pre Tax
Earnings Yield
Pre Tax
Return on Capital
Price
From
Most Recent
Quarter Data
Aspreva Pharmaceuticals Corp ASPV 673.86 28% > 100% 12/14 09/30
Axcan Pharma Inc AXCA 650.37 10% > 100% 12/14 09/30
Barr Pharmaceuticals Inc BRL 5,467.68 11% > 100% 12/14 09/30
Barrett Business Services Inc BBSI 271.79 10% > 100% 12/14 09/30
Biovail Corp BVF 3,353.84 15% > 100% 12/14 09/30
Cavco Industries Inc CVCO 220.59 14% > 100% 12/14 09/30
Cryptologic Inc CRYP 275.59 16% > 100% 12/14 09/30
Deluxe Corp DLX 1,277.81 10% > 100% 12/14 09/30
EPIQ Systems Inc EPIQ 309.26 17% > 100% 12/14 09/30
EarthLink Inc ELNK 834.02 12% > 100% 12/14 09/30
ExpressJet Holdings Inc. XJT 471.75 34% 50 - 75% 12/14 09/30
Fording Canadian Coal Trust FDG 3,485.37 19% > 100% 12/14 09/30
Freeport-McMoran Copper & Gold Inc. FCX 11,762.51 21% 75 - 100% 12/14 09/30
FreightCar America Inc RAIL 686.53 32% > 100% 12/14 09/30
Frontier Oil Corp. FTO 3,546.38 17% > 100% 12/14 09/30
Harland (John H.) Co JH 1,121.44 10% > 100% 12/14 09/30
Harvest Natural Resources Inc. HNR 396.49 16% > 100% 12/14 09/30
Holly Corp HOC 3,033.83 13% 75 - 100% 12/14 09/30
Intersections Inc INTX 174.62 12% 75 - 100% 12/14 09/30
K-Swiss Inc KSWS 1,126.71 12% > 100% 12/14 09/30
King Pharmaceuticals Inc. KG 4,016.24 17% > 100% 12/14 09/30
Korn/Ferry International KFY 939.06 10% > 100% 12/14 10/31
Labor Ready Inc. LRW 996.19 12% 75 - 100% 12/14 09/30
Lam Research Corp LRCX 6,872.10 9% > 100% 12/14 09/30
Lamson & Sessions Co LMS 396.39 19% 50 - 75% 12/14 09/30
Mannatech Inc MTEX 357.18 15% > 100% 12/14 09/30
Motorola Inc. MOT 50,018.07 11% > 100% 12/14 09/30
New Frontier Media Inc NOOF 221.99 10% > 100% 12/14 09/30
Nucor Corp NUE 17,622.43 16% 50 - 75% 12/14 09/30
OmniVision Technologies Inc OVTI 793.44 20% 75 - 100% 12/14 10/31
Optimal Group Inc OPMR 207.76 11% > 100% 12/14 09/30
PW Eagle Inc PWEI 421.32 39% > 100% 12/14 09/30
Pacer International Inc PACR 1,115.23 10% > 100% 12/14 09/30
Palm Inc PALM 1,471.94 14% > 100% 12/14 08/31
Patterson-UTI Energy Inc PTEN 4,170.38 24% 50 - 75% 12/14 09/30
Pinnacle Airlines Corp PNCL 246.20 28% > 100% 12/14 09/30
PortalPlayer Inc PLAY 341.08 18% > 100% 12/14 09/30
Prestige Brands Holdings Inc PBH 628.60 9% > 100% 12/14 09/30
Southern Copper Corp PCU 17,019.79 15% 50 - 75% 12/14 09/30
Teck Cominco Ltd TCK 17,423.18 17% 50 - 75% 12/14 09/30
True Religion Apparel Inc TRLG 354.98 13% > 100% 12/14 09/30
United Industrial Corp UIC 577.10 11% > 100% 12/14 09/30
United Online Inc UNTD 877.13 11% > 100% 12/14 09/30
Vaalco Energy Inc EGY 453.53 19% > 100% 12/14 09/30
Valassis Communications Inc. VCI 757.69 15% > 100% 12/14 09/30
Verigy Ltd VRGY 1,053.39 15% > 100% 12/14 10/31
ViroPharma Inc VPHM 1,060.35 12% > 100% 12/14 09/30
Western Refining Inc WNR 1,924.82 17% 75 - 100% 12/14 09/30
Williams Controls Inc WMCO 108.53 13% 75 - 100% 12/14 09/30
World Air Holdings Inc WLDA 198.45 17% 75 - 100% 12/14 06/30