Monday, November 19, 2007

The Beat Goes On

Wow anoth tough day/week/month year in the market. I think it is safe to say that my MFI portfolio is at an all-time low. It isn't pretty. Also, well below the Russell 3000 benchmark... over 11% at this time. Brutal.

It isn't just me. The entire universe of MFI has the Beat Going On. In the stock market contest I started on July 1st, the average portfolio is down 16%. The Viper Benchmark is down 3%. My monthly tracking portfolios I started in January 2006 (so about 10 are closed and not bleeding any more) are trailing the benchmark about 4% in aggregate.

I hope no one has been trying the Leaps strategy, it would have been quite painful thus far. I started two hypothetical Leap portfolios, one in May and one in October. The May one is down 41% and the October one is down 27%. Ouch.

What does all this mean? Some people hypothosize that a down stretch for MFI will make it more likely to work in the future as less people will use it. Perhaps that is possible, though I am struggling to find much joy. If that is true and my portfolio begins to rocket upwards, I suppose I'll have to stop this blog so the good news doesn't leak out.

IVAC will be gone from my portfolio this week. It is down a dismal 37%. I want a cagey stock to replace IVAC. I want something that should be "recession proof". A good defensive play. Do people know what I plan to buy?

Wednesday, November 14, 2007

Good News for hhg?

HGG is a stock I bought during the bloodbath that was this summer. They went public this summer and no one seemed to notice as it was sub prime this CDO that. My take on them is that they were home entertainment for well-heeled people, a step or two above Best Buy. They compete on service and help you customize and install your system. I felt this was a decent "moat" and besides they were cheap and on the list.

Of course they promptly dropped after I bought them from $13.48 to as low as $10.50. They have rallied of late and are at $14.80 right now (would have been sweet to have bought at $10.50!) and announced their earnings (hhgregg's Second-Quarter Comparable Store Sales Increase 8.9%) this morning. Note their headline was positive while AP was negative (Hhgregg Swings to 2Q Loss).

Ah, the headline games! They had a "loss" because they paid down their debt early. I don't view that as "bad" though not sure what that'll do to their MFI ratios. The numbers were strong and they increased guidance by about 6% for 2008.

We'll see how the market reacts. I'll have more earnings excitement today and tomorrow and laggards USHS and CHCG announce. Cross your fingers. BTW, with yesterday's rally, I have moved ever so slightly "above the green line".

Tuesday, November 13, 2007

MSTR Comes Out Swinging

One of my best (not a high bar) stocks has been Microstrategy, up about 50%. Recently two of their big competitors (BOBJ and Cognos) have been bought (I think by IBM & SAP). Will MSTR be next? I don't know. But they are trying to lure customers from their competitors, by playing up their independence (MicroStrategy Now the Leading Independent Provider of Open Systems Business Intelligence Software). They didn't mince words, here's their opening statement:

"Business intelligence consumers require financially strong, independent BI software providers. The acquisition of independent BI vendors by conglomerate software vendors will have the effect of creating "closed stacks" of proprietary software that work best only when used together. In contrast, independent vendors work with one another to create an "open systems stack" of software that has several important advantages for BI consumers."

We'll see what happens. I like them being aggressive.

Not much else to add, the bloodbath continued yesterday... though my portfolio dropped on par with the averages. Commodities got pummeled. Today looks better, retail looks to finally be getting a bit of a bounce. Companies like AEO & ARO have been slashed down. Oh well, at least I didn't own e-trade.

Friday, November 09, 2007

Below the Green Line

Another week in the books. I am now below the green line for the first time since about Oct 2006. That is not a good thing. Take a long glance at my chart. It is amazing how steep the declines can be. Not to give up hope though, I was below water last October and below the benchmark and went soaring past it in July 2007. It can happen again. And don't worry about us being in the red, we'll still have stocking on the mantle and presents under the tree... I just won't be retiring any time soon!

The earnings have been coming in daily. Since the MSTR good news, it has been a steady diet of bad news (thus the decline).

UG - they seemed ok to me today (United-Guardian Reports Nine Month Results), but this stock is stuck between $10 and $11.

NOOF - continued to be down a lot Y o Y, but they did say that they will be returning to growth in the 2nd half of this year (Revenue, profits down for New Frontier Media).

EGY - had decent earnings, but their entire issue (VAALCO Energy, Inc. Announces 3rd Quarter 2007 Results) is whether they'll find more oil as what they have is getting depleted.

PACR - their president quit this week and stock dropped a bunch (Pacer's president quits).

WNR - missed targets as they closed down some for maintenance (Western Refining 3Q Profit Drops). I think this was perfect timing as margins were low anyway. That is best time to re-tool.

KSWS - had a sucky quarter. Barron's picked these guys in June, they were sure wrong... or "early as they'd put it (K-Swiss Hits Low on 3Q Results, Outlook).

KSW - they were "okay" which is great relative to my other stocks (KSW, Inc.'s Third Quarter Profits Rise).

AEO had sub-par October sales and that dropped them to pretty much a 52 week low (American Eagle Oct. Same-Store Sales Dip).

At least I sold ASEI a couple weeks ago at about $65 a share. I see they're under $50!

I'll get more "excitement" next week as CHCG announces. Surely they can't go down further??

Current Portfolio
Stock Purchase Date Cost Current Gain
TGB 3/27/2007 $2.64 $5.73 117.0%
MSTR 9/14/2007 $69.55 $100.90 45.1%
TCK 8/16/2007 $36.50 $47.34 29.7%
JTX 4/9/2007 $28.70 $32.02 12.8%
UNTD 5/1/2007 $14.51 $15.68 11.8%
DGX 3/17/2007 $52.11 $53.87 4.0%
KSW 5/10/2007 $6.54 $6.79 3.9%
THO 4/2/2007 $40.30 $39.76 3.8%
HGG 8/3/2007 $13.48 $13.98 3.7%
KFY 9/28/2007 $16.74 $17.28 3.2%
TGIS 11/30/2006 $9.18 $9.02 0.4%
LRCX 7/3/2007 $47.51 $47.19 -0.7%
VALU 5/29/2007 $44.01 $42.97 -1.0%
LCAV 11/9/2007 $17.59 $17.15 -2.5%
VSNT 7/27/2007 $19.54 $18.93 -3.1%
AXCA 9/21/2007 $19.53 $18.80 -3.7%
HSII 10/5/2007 $39.92 $38.19 -4.0%
CHKE 7/17/2007 $36.70 $32.97 -8.1%
UG 6/13/2007 $12.09 $10.10 -16.4%
RAIL 2/16/2007 $45.54 $37.75 -16.8%
PNCL 2/9/2007 $17.07 $14.16 -17.0%
WSTG 5/15/2007 $14.98 $11.50 -20.5%
KSWS 7/27/2007 $23.94 $18.64 -21.9%
AEO 7/10/2007 $28.42 $21.60 -23.3%
CHCG.OB 6/5/2007 $5.93 $4.06 -31.5%
NOOF 4/27/2007 $8.59 $5.54 -32.6%
WNR 7/27/2007 $46.22 $30.57 -33.8%
BBSI 9/7/2007 $24.13 $15.85 -34.3%
IVAC 11/23/2006 $23.52 $14.68 -37.6%
PACR 1/3/2007 $25.46 $14.65 -41.2%
USHS 6/25/2007 $11.22 $6.40 -42.9%
GVHR 10/12/2007 $15.91 $6.49 -58.0%

Gain/Loss Open Positions ($): ($55,043)
Gain/Loss Open Positions (%): -8.9%
Gain/Loss Closed Positions ($): $51,064
Gain/Loss Closed Positions (%): 8.6%
Total Gain/Loss ($): ($3,979)
Benchmark Gain/Loss ($): $47,837
Annual IRR: -0.7%
Total Gain/Loss (%): -0.7%

Wednesday, November 07, 2007

New Stock

I did buy my 1st new stock in a while.

LCAV - this is a company that runs Laser Vision Centers. They recently showed up on the top 25 list. They were a recent high flying growth company and traded as high as $50 this year. I bought them for $17.59. They also pay a nice 4% dividend. MF had a positive article on them that clinched my buying decision (More Than Meets the Eye at LCA-Vision). I had an open slot from back in September, so I now have a full load. TGIS is up for sale later this month, can't say I'll be sorry to see them go.

Rough day all around today. My MFI portfolio now ITD is just barely in the black. Basically 20 months and zippo. But I still have hope. The book does make a strong case that the system works... over time.

Monday, November 05, 2007

Bad to Worse

GVHR got crushed today (UPDATE - Gevity Q3 profit drops, outlook weak; shares tank). Sadly, the verb "tank" doesn't do it justice... it was down over 30%. I am not sure, but I believe that is my largest single day percentage drop for me. Not a record I care to eclipse. But that bad news was shared,

THO dropped over 6% as the street didn't like their earnings either (Thor Announces Quarter Sales Up 5% to $763 Million; Backlog at Record $476 Million; Cash at $263 Million). Hmm, that headline sounds darn good.

KSWS went down 6% on no news that I saw. Wait ML downgraded them.

So my portfolio now trails the benchmark by a whopping 9%. It isn't just me. My 12 open tracking portfolios are trailing the benchmark by an average of 4.8%. Frankly, the approach isn't working right now. I know JG said there would be stretches like this and you could even have back-to-back under-performing years. I hope he is right.

Saturday, November 03, 2007

Weekly Update - November 3rd 2007

Another week has flown by. MSTR did break "par" as Cramer calls it. But generally I am losing ground on the benchmark. Here are my charts:

Here are my current holdings:

Current Portfolio
Stock Purchase Date Cost Current Gain
TGB 3/27/2007 $2.64 $5.82 120.5%
MSTR 9/14/2007 $69.55 $100.46 44.4%
TCK 8/16/2007 $36.50 $48.54 33.0%
THO 4/2/2007 $40.30 $46.75 21.1%
HGG 8/3/2007 $13.48 $16.00 18.7%
UNTD 5/1/2007 $14.51 $16.87 18.6%
KFY 9/28/2007 $16.74 $18.02 7.6%
JTX 4/9/2007 $28.70 $30.52 7.6%
KSW 5/10/2007 $6.54 $7.00 7.1%
TGIS 11/30/2006 $9.18 $9.47 5.3%
VSNT 7/27/2007 $19.54 $20.41 4.5%
HSII 10/5/2007 $39.92 $41.47 4.2%
DGX 3/17/2007 $52.11 $53.28 2.8%
LRCX 7/3/2007 $47.51 $48.65 2.4%
CHKE 7/17/2007 $36.70 $36.33 1.0%
VALU 5/29/2007 $44.01 $42.20 -2.7%
AXCA 9/21/2007 $19.53 $18.85 -3.5%
KSWS 7/27/2007 $23.94 $21.92 -8.2%
RAIL 2/16/2007 $45.54 $41.66 -8.2%
UG 6/13/2007 $12.09 $10.79 -10.7%
PNCL 2/9/2007 $17.07 $14.83 -13.1%
WSTG 5/15/2007 $14.98 $12.16 -17.1%
AEO 7/10/2007 $28.42 $22.55 -20.0%
WNR 7/27/2007 $46.22 $35.00 -24.2%
EGY 12/13/2006 $6.42 $4.82 -24.9%
CHCG.OB 6/5/2007 $5.93 $4.39 -25.9%
IVAC 11/23/2006 $23.52 $17.20 -26.9%
NOOF 4/27/2007 $8.59 $5.95 -27.8%
BBSI 9/7/2007 $24.13 $16.70 -30.8%
GVHR 10/12/2007 $15.91 $9.42 -39.5%
PACR 1/3/2007 $25.46 $14.95 -40.0%
USHS 6/25/2007 $11.22 $6.32 -43.6%

Gain/Loss Open Positions ($): ($25,222)
Gain/Loss Open Positions (%): -4.1%
Gain/Loss Closed Positions ($): $55,260
Gain/Loss Closed Positions (%): 9.5%
Total Gain/Loss ($): $30,038
Benchmark Gain/Loss ($): $71,269
Annual IRR: 5.4%
Total Gain/Loss (%): 5.2%