Tuesday, March 27, 2007

Keeping Track

Perhaps some readers don't like it, but I love to track things. I probably tend to see patterns where patterns don't exist, but it is who I am. I thought I'd devote today to some of my crazy tracking portfolios. First a couple quick words about today. I did buy one more stock, TGB. This is a mining company. I haven't had a non-coal mining company since selling PCU last fall. I have had buyer's remorse in not buying FCX when it dropped to $53 a few weeks ago. I consider my portfolio to be 32 stocks right now. I actually have 33, but I will sell PGI next week and not replace it.

I had a good day, thrashing the indices. It was all due to AVCI, which shot up for no discernable reason went up over 15%. I took a look and decided it must have been a short squeeze. Over 18% of AVCI is held short. I'll tell you, many MFI stocks are favorite targets of bears... not for the faint of heart (glad I didn't know when I bought them).

Then I actually had some positive stock news this evening. ANF is joining the S&P 500 (Abercrombie & Fitch to Join S&P 500)! That should boost them about 5%! Woo-hoo! Of course those gains rarely stick.

On to the tracking portfolios. First I'll introduce a new one. Lot of discussion on the optimal time to sell MFI stocks. Logically, if we believe that stocks on MFI lists are superior in total to stocks not on MFI lists, then it seems that when a stock goes off the list due to poor earnings or appreciation in price that would be a sell signal.

So my tracking portfolio is comprised of 50 stocks greater than $500m in market cap. Then once a week I will look at the 100 stocks greater than $400m. If a stock falls off that list and stays off the list for 6 straight weeks, I will sell it. At that time, the stock will be replaced with the first alphabetical stock on the 50/500 list that I don't own. After a year, we'll see how the "active" MFI portfolio (which I will call the "Hit the Road" Portfolio) will do versus a strict buy and hold portfolio. If it isn't too much work to upkeep, I'll start a new one once a quarter.

Now here are the two Blue Light Special Portfolios I have been tracking:



As you can see (I think) it is up a snappy 6.5% while the Russell 3000 is up a mere 0.5%. Then here is the March 14th Blue Light Portfolio after 2 weeks:



Not as big a gap here, up 4.6% compared to 3.4% for broader market. The MOT meltdown did hamstring this portfolio slightly.

Enough! Tomorrow I will try and close out my March 29th 2006 tracking portfolio whicxh has a comfortable lead over the indices (again). Wish I invested as well as the tracking portfolios. Not sure if I am just biased or unlucky. But I can't complain, I do have about a 3K lead.

3 comments:

Tony said...
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Tony said...

Marshall, an entry point of $53 on FCX would have been very good, but I'm not convinced you've missed the boat entirely. Two directors just bought nearly $16 million worth of stock at prices in the $63+ range. That seems like a pretty significant indicator they think it can go much higher.

justadrone said...

Cramer agrees. He said to "back up the truck", that it was going to $82.

MG