Great Bonnie Raitt song! Lots to discuss this Blog. Where to start?
What Do These Stocks have in Common?
Riddle me this: what do BBSI, TGIS, MTEX and CHKE have in common? Answer at the bottom.
Hit the Road Study
As readers may recall I have started a hit the road study with the idea of selling stocks in a test portfolio when they fall off the MFI screens. While I will continue with my real time study, I used some data sent to me by Joe W. on the Yahoo board to backtest it. I tried many different permuations, one I did while standing on my head. But the long and short of it was that I could find no predictable sell rule In the hundred and fifty stocks I looked at. JG said as much, I'll keep looking but I am less optimistic.
Mutual Fund Formula?
I was reading Smart Money this weekend. They had backtested an approach of picking mutual funds that had out-performed the market by an average of 7 points. Basically you pick the MF with the highest 52 week return and you buy and hold it for a year. And then you roll your money into the best fund the next year. The Fund has to be a broad market fund rather than a sector. It works for both domestic and international funds. Might worth trying. Here are the two best per my Fidelity Search engine (drum roll please):
Federated Strategic Value CL I (SVAIX) $6.73
Dreyfus Premier Greater China CL R (DPCRX) $43.03
Hmm, wonder if China is a "sector"?
Winners and Losers
A solid day for my portfolio today. I did lose out to the Russell 3000, but I kinda expected that after my great week last week. CHKE announced their earnings today (CHEROKEE Q4 earnings rise on one-time item). They weren't that great in my opinion, actually down from prior year excluding the $33m from MOSS. Since everyone already knew about that it should be excluded. I would not be surprised to see stock drop back tomorrow when people figure that out.
Then ISNS shot up today, almost 8%. Not sure why, though they are presenting in Europe (Image Sensing Systems Launches Autoscope Terra Products at TRAFFEX).
Finally DGX dropped as they announced they were buying another company for $2b (Quest Diagnostics chases AmeriPath ).
Missing IWV Dividend
I have wondered in the blog several times why the IWV ETF wasn't showing any dividends in Yahoo since Spetember. Today I finally went to the source and Barclay's iShares showed 33 cent dividends Dec 20th and March 23rd. Aha! So IWV gained several thousand $ on my MFI with the inclusion of the missing dividends (I treated them as if shares were added on dates of dividends).
Answer to Riddle
CHKE, TGIS, MTEX and BBSI are all small cap stocks in my MFI portfolio. They are all up over 20%. The final item they have in common is that they all pay a decent dividend. Coincidence? Maybe not. It seems that if a small cap is willing to commit to a dicvidend they must have confidence in future cash flows. That is a reason I recently added GVHR. Then today I replaced AVCI with WSTG. WSTG is one of my smallest stocks (market cap of $66m and I moved the market today). They pay almost a 4% dividend. Stay tuned and see if it works! I should note in January I almost bought CPSI and they are up about 15% since I considered them and they pay a 5% dividend.