Monthly Tracking Portfolio
My December 28th 2006 portfolio came of age over the weekend. That means that we now have 13 portfolios "in the books". This represents almost 650 stock years. How has the magic formula fared? Nothing great. +13.9% on average versus +12.9% for the benchmark Russell 3000.
Of my 11 portfolios that are open (versus the 13 that have closed) they are trailing the benchmark on average by 8 points. Still some time remains to close that gap.
The December 2006 portfolio was the worst to-date. Down 6.9% while the the benchmark was up 3.4%. So MFI was routed by more than 10%. Here are the 50 stocks and how they fared:
| bbsi $23.14 $17.78 -23.2% |
| brl $50.58 $53.31 5.4% |
| bvf $19.76 $13.30 -32.7% |
| caw $11.31 $9.50 -16.0% |
| CRYP $22.77 $17.51 -23.1% |
| cvco $35.73 $30.44 -14.8% |
| debs $26.93 $27.26 1.2% |
| dlx $24.45 $33.10 35.4% |
| eglt $14.68 $12.75 -13.1% |
| EGY $6.78 $4.71 -30.5% |
| elnk $7.13 $7.06 -1.0% |
| epiq $11.26 $17.67 56.9% |
| fdg $19.81 $38.49 94.3% |
| fto $28.94 $40.76 40.8% |
| hnr $10.71 $12.46 16.3% |
| hoc $52.0 $50.82 -2.3% |
| kfy $23.33 $18.61 -20.2% |
| kg $16.10 $10.21 -36.6% |
| ksws $31.81 $18.26 -42.6% |
| lms $24.71 $27.30 10.5% |
| lrcx $51.22 $43.79 -14.5% |
| lrw $18.64 $15.37 -17.5% |
| mot $20.38 $16.11 -21.0% |
| mtex $14.60 $6.29 -56.9% |
| nath $14.35 $17.48 21.8% |
| noof $8.71 $5.55 -36.3% |
| nue $53.64 $59.97 11.8% |
| opmr $9.23 $3.87 -58.1% |
| ovti $13.67 $15.67 14.6% |
| pacr $29.67 $14.52 -51.1% |
| palm $7.51 $6.23 -17.0% |
| PNCL $16.96 $14.99 -11.6% |
| ppd $40.21 $54.89 36.5% |
| pwei $35.01 $33.50 -4.3% |
| rail $56.61 $35.66 -37.0% |
| trlg $15.76 $21.48 36.3% |
| uic $50.93 $80.96 59.0% |
| untd $12.75 $11.75 -7.8% |
| valu $44.53 $40.40 -9.3% |
| vci $14.51 $11.59 -20.1% |
| VPHM $14.67 $8.20 -44.1% |
| wnr $25.81 $24.10 -6.6% |
| xjt $8.18 $2.50 -69.4% |
Here is how all the portfolios have done in total. Note this list includes open portfolios as well:
| Average of Percent Change | ||
| Date | Total | IWV |
| 1/6/2006 | 16.0% | 10.9% |
| 2/17/2006 | 21.2% | 14.6% |
| 3/29/2006 | 13.0% | 9.6% |
| 4/7/2006 | 10.3% | 12.1% |
| 5/12/2006 | 20.4% | 17.3% |
| 5/31/2006 | 29.2% | 22.0% |
| 6/30/2006 | 22.4% | 18.7% |
| 7/31/2006 | 19.7% | 15.9% |
| 8/31/2006 | 13.0% | 12.0% |
| 9/28/2006 | 12.7% | 14.6% |
| 10/27/2006 | 10.3% | 12.0% |
| 11/29/2006 | -0.3% | 4.8% |
| 12/28/2006 | -6.9% | 3.4% |
| 1/26/2007 | -0.8% | 3.3% |
| 2/27/2007 | -2.1% | 4.6% |
| 3/26/2007 | -8.1% | 2.2% |
| 4/27/2007 | -8.9% | -1.8% |
| 5/29/2007 | -12.1% | -3.4% |
| 7/3/2007 | -20.3% | -3.6% |
| 7/30/2007 | -12.9% | 0.1% |
| 8/30/2007 | -7.9% | 1.2% |
| 9/27/2007 | -8.2% | -4.0% |
| 11/2/2007 | -8.3% | -2.9% |
| 11/28/2007 | -0.4% | -0.1% |
| Grand Total | 3.3% | 7.1% |
| Open | -8.2% | -0.4% |
| Closed | 13.9% | 12.9% |
Want some more statistics? The table below shows how the stocks have done by market cap (at time of purchase) decile:
| Size Decile | Gain | Max MC |
| 1 | 18% | 207 |
| 2 | 4% | 327 |
| 3 | 1% | 415 |
| 4 | 0% | 573 |
| 5 | 11% | 846 |
| 6 | 9% | 1,038 |
| 7 | 22% | 1,701 |
| 8 | 30% | 3,191 |
| 9 | 14% | 5,350 |
| 10 | 30% | 117,016 |
| Overall | 14% |
What does this show? The 65 closed stock years 207m and smaller are up 18%. But then stocks between 207m and 573m (over 180) have barely moved. Then the larger cap stocks are generally up double digits. As I have said before, thus far in MFI it has been all about market cap. I would wager that anyone doing well has been buying larger market cap stocks.
My Portfolio
My portfolio is trailing the benchmark by about 9 points. As I am doing worse than the average tracking portfolios shown above (trailing by about 4 points) I have wondered if I have been a poor stock picker. To test this, I grouped my stock purchases by month/year and then weighted them with the monthly tracking portfolios... guess what? That would be trailing the benchmark by 9 points. So that tells me I am picking stocks "average" rather my problem has been I have tended to invest in months that have performed poorly. Now is that because I am unlucky or do I tend to buy stocks when stocks are on the rise? Not sure. But it should balance out as I am not putting new $ into MFI.
Year-End
Well, while it was an up-and-down year (I am 16% below my peak worth in 2007) at least things finished on an upswing. My low point was in late November when I trailed the benchmark by about 86K and was about 40K underwater. I end the year at almost exactly break-even and trail the benchmark by 53K. So I have shaved 33K off my low point in a bit more than a month. You only have to look at my graphs to see that things can move quickly.
Stock Contest
I don't have the exact numbers in front of me, but we're also struggling in the stock contest which began on July 1st. Almost exactly in lock step with my numbers. The 44 players are down on average by about 14.5% (similar to my 16% drop from my high of 2007 and the 20% drop from the tracking portfolio of 7/3/07). The benchmark is about flat.
I guess that is about all I have to say. Off to watch my Hoosiers in the Insight bowl... first bowl in 11 years. I have low expectations. Have a Happy & Safe New Year.
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2 comments:
Thanks for your work on this Marsh. Here's to a good New Year, in life and the market.
Holy brutal 2008 thus far ... I'll be down 100% by the end of January at this rate ...
Marsh, Thank you so much for all your posts and hard work!
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