Wednesday, May 30, 2007


Sorry I have been absent. Took a little 4 day weekend and just now getting back into the swing.

  • My portfolio has gained serious ground. I did drop 4% behind the benchmark 2 weeks ago. Now I trail by less than 1/2%. Never dull.
  • I sold KG today as it hit the 1 year anniversary. It was up a nice 24%
  • TRLG was on fire today, up about 15%. I suspect it was a classic short squeeze as 45% of the stock is shorted.
  • I do have an update on my study.
  • People are saying bullish things (FreightCar America Still on Track?) about RAIL. I hope that is good (Should You Buy It: Freightcar America).
  • I think to replace KG, I am going to try a new strategy.

Well, the tracking portfolio I set up a year ago is now closed. It stomped the Russell benchmarks. Including dividends the Tracking Portfolio was up 29.2%, my best result yet. The benchmark Russell 3000 was up 21.1% and Russell 2000 was up 18.7%.

Of the composite 6 portfolios that have now closed, the MFI annual result is 18.3% vs 14.8% for the average of the two Russells. Of the 50 stock portfolio, 4 finished up over 100%: DECK, PCU, PNCL and DLX. 5 were bought out, so you could have gotten further gains if $ had been reinvested.

AEO $21.60 $27.09 25.4%
AHCI $3.82 $3.02 -20.9%
ALDA $31.43 $15.37 -51.1%
ANIK $10.52 $13.50 28.3%
BVF $23.43 $24.21 3.3%
CECO $32.59 $35.01 7.4% $5.75 $5.84 1.6%
CHKE $36.05 $47.15 30.8%
CHKP $19.30 $23.51 21.8%
DEBS $28.72 $27.46 -4.4%
DECK $35.46 $86.87 145.0%
DLX $20.69 $43.54 110.4%
ELNK $8.33 $8.29 -.5%
FTD $13.0 $17.68 36.0%
FTO $27.88 $40.06 43.7%
HAS $18.28 $32.50 77.8%
HOC $41.46 $70.12 69.1%
HSII $35.32 $48.97 38.6%
IVII $10.21 $13.0 27.3%
JH $38.69 $52.45 35.6%
KFY $20.50 $25.33 23.6%
KG $17.78 $21.44 20.6%
KSWS $26.20 $28.82 10.0%
MEDQ.PK $14.01 $8.30 -40.8%
MTEX $13.67 $14.02 2.6%
MVL $19.10 $27.48 43.9%
NSS $49.92 $65.0 30.2%
ORCT $12.63 $10.39 -17.7%
PCU $38.91 $86.88 123.3%
PLAY $10.05 $13.47 34.0%
PNCL $6.84 $18.01 163.3%
ptsc.ob $.94 $.47 -49.9%
VALU $40.86 $43.11 5.5%
VPHM $9.73 $14.74 51.5%
WINS $5.82 $7.15 22.9%
WON $7.86 $8.16 3.8%

My new technique I am going to try is an offshoot of my "Just Listed" analysis. It does appear to me that buying a stock that just got listed on the list is a potential means of getting a little better results. I still think the Blue Light Special approach has some merit as well (buying MFI stocks down 15% or more), but those are few and far between right now with the current bull run we've had.

My Perl programming friend has created the code to pull reams of data from Fidelity's compustat financial database. Hopefully this weekend we can pull data for 2000 stocks or so and see if I can come close to matching the top 100 list. Even if I don't match the top 100 list, the 2nd phase will be interesting. I will pull data so I can backtest for the past 5 years. So even if I don't match the MFI list "exactly", if my backtest still shows my formula gives superior results then I think we have something. Stay tuned, it'll be a busy summer as I crank through all the data. Too bad I have a day job!


Trio Jeepy said...

Actually Marsh, I don't think the just listed method is necessarily something you want to do. Consider this scenario: company has decent financials, but for whatever reasons, is being run down and therefore pops onto the list. If that process of being rundown is ongoing, you might be trying to catch a falling knife, never a fun proposition. While its impossible to pick a stock at its low, it might be better to pick one that appears to be recovering in price. That way, you might spare yourself some unnecessary trauma with just listed stocks.

justadrone said...

George, I appreciate your comment. I think it is more common for stocks to get on the list not because they are a falling knife, but rather they just had a very positive earnings report.


Todd said...

I dig your blog. As a MFI investor, I look forward to reading your post and analysis. In this market, I can't get excited about buying anything, so I look forward to seeing what your KG replacement will be. Thanks for the hard work.

Kevin said...

Glad you are back! I always look forward to reading your blogs.