That's Incredible!

What’s Incredible?

I’ll tell you. My MFI portfolio actually ended up the day in the green, despite meltdowns by two stocks: MTEX (-12.8%) and PTSC (-18.2%).

The MTEX meltdown was a little bothersome. At about 2:15 it dove from $18.40 to below $17. I could find no reason for the drop. The volume was high at 1.2m shares vs normal 200k.

The PTSC drop wasn't unexpected after I read their long delayed quarterly income statement.

The fact that the portfolio increased does show the power of a thirty stock portfolio. BLDR has been going up like crazy, up 23% in the past week. Thanks Mr. Cramer for bullish posture on home-related stocks.

1st Major Deviation from Rules

I sold PTSCE today. 7 1/2 months before its time. It wasn’t really a MFI stock in my opinion. I could not stomach the volatility any longer. I am going to try not to look backwards and just consider it a lesson learned. Speaking of looking back, PCU shot up $1.42 today! Oh well, I did feel that was a legit sale as I had held for a year.

Breaking (up is hard to do) The Rules?

A recent comment was that my MFI approach was not following the rules specified in TLBTBTSM. That is correct as JG does lay out the steps to replicate his backtest study. In his steps, you are to buy 5-7 stocks at 4 points in the year and then hold for basically a year.

My buying has not been 5 to 7 stocks at a time.

Date Purchase
2/24 - 5 stocks
2/27 - 1 stock
3/2 - 1 stock
3/9 - 1 stock
3/15 and 3/17 - 1 stock
4/3 - 3 stocks
4/7, 5/1, 5/4, 5/9, 5/12, 5/15. 5/16. 5/22, 5/26 - 1 stock
5/31 - 3 stocks
6/2, 6/5, 6/13, 6/19, 7/7, 9/6, 9/11, 9/18 & 10/5 - 1 stock

And now I am trying to watch stocks and buy them on dips. Am I following the rules? While I am not following his procedure exactly, mathematically I do not see how it matters whether the portfolio is 4 equal buys, 12 equal buys or whatever. Over a 3 to 5 year period the difference should move towards 0. The equal buys and then selling around the same date do make it easier to rebalance your portfolio so you have equal $ in all stocks. But as I intend to be supplementing $ invested in MFI contnuously, I don't know that this is a big deal.

How about "timing" a purchase? Watching the stock prices and picking a stock on "sale". JG certainly doesn't infer that this approach should be used. It is something I have begun to do because the MFI stocks seem pretty volatile to me. Perhaps I am biasing my purchases by doing this. I have really only done this 3 times (ASEI, BBSI & VPHM). I will likely continue the approach as it appeals to the way I like to invest.

Benchmark Portfolios

I checked on how my monthly benchmark portfolios have been faring. The answer is "quite nicely thank you".

	MFI	Benchmark
February	9.30%	7.12%
April	0.57%	10.05%
May	5.27%	6.04%
June	5.87%	7.62%
July	9.84%	7.27%
August	9.28%	7.23%
September	6.31%	5.57%
October	6.30%	2.61%
Average	6.59%	6.69%