.What this graph clearly shows (if you focus on the magenta line... me) is that I under-performed through November 2008. Since then I have been en fuego. And while it is the total that matters, and it does show I am still about 4% below break-even, I would suggest that the past twelve months give me a lot of hope regarding the direction of my portfolio.
To illustrate this point, I have essentially taken the chart above and re-normalized it as if I started a year ago. Ready? Fasten your seat belts!
Wow, I am amazed again. Absolutely stunning. What does it mean? I think the charts really illustrate that my space in MFI, which I would consider small/micro cap value stocks, tanked early... back in July 2007. This was because they had been bid up as potential buyout targets. That premium quickly melted away in July-Sept 2007. Then we drifted down with entire market for the next year as people panicked and simply sold everything.
But at that point, since my type of stocks had led the leg down, they were the first to recover. And that has now been accelerated in 2009 as we got past March and M&A re-started... and the easy targets, which were accretive immediately were these small bite-sized value stocks.
Is it over? I don't think so. When I see M&A slow down, then I think it is over. I will also say that the other impetus for my improvement has been moving towards the pure mechanical approach. It is a bit hard to quantify, but the mechanical approach, both in my tracking and for me, is absolutely humming. My current invested amount in the mechanical is up about 40%. When you consider that my average open position is 82 days, that is an eye-popping gain.
Ok, enough for the day. Go Twins!
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1 comment:
I've been tracking an MFI-portfolio since 8/2007, holding thirty stocks for one year, and I've found similar results. Portfolio is up 8.4% overall since inception, outperforming S&P500 (down 18%). Open positions are up 46%.
I rather unimpressed at times when the portfolio tanked further than the market, but now I am hopeful and excited that MFI is actually working its "magic". 2007 was quite tumultuous time for starting with MFI.
Please keep up the strong work with your blog, as I read it almost daily.
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