Update of Mechanical Approach - Jan 8 2010

Thought I'd give a quick update of the mechanical portfolios. As a reminder to my faithful readers, every weekend I look at the top 30 and top 50 screens from the MFI website. If a stock is new to the list in the past 52 weeks, I add it to the appropriate mechanical portfolio. I at the same time add the S&P 500 and then I track it over the next year. I am coming up on my second year of this mechanical approach to MFI and it has crushed the benchmark averages and out-performed the average movement of MFI stocks. All-in-all the top 50 average stock is up 22.9% versus 3.1% for the S&P 500. You would be up an average of 14.6% if you bought 50 mfi stocks each month. In addition, as I have mentioned here several times, I am transitioning my portfolio to more of a "mechanical" approach. I am not taking every stock (that would be too many) but I consider each Monday (and even sometimes mid-week) buying a stock that is new to the lists. That is starting to work very well for me.

Finally, I also track the top 50 stocks over 100m each month for a stock year and I have done that since January 2006. I did go back to that database (starting in January 2007) and only used stocks that hadn't been on the list in the past 12 months. It also outperformed there, up an average of 7.0% per stock year vs 2.9& for the broader MFI universe and -2.0% for Russell 3000. I don't know about you, but I think this makes a pretty strong case for the vaunted holy grail of taking the MFI list an doing even better.

Here is a listing of both my Mechanical Portfolios that I use to monitor performance. We are actually at a zenith, the stocks that were added between January and March of 2009 are up an average of 93%. It is intriguing how the two portfolios are almost perfectly in sync. That suggests that it doesn't make much difference if you select from top 30 or top 50.

Top 50

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
HPY	1/24/09	8.54	15.00	-	83.11	2.18	75.6%	40.5%	35.2%
HLIT	1/31/09	5.15	6.51	-	82.83	2.18	26.4%	40.9%	-14.5%
HGT	1/31/09	13.06	17.54	0.65	82.83	2.18	39.3%	40.9%	-1.7%
CNU	2/8/09	1.96	4.37	-	86.98	2.18	123.0%	34.2%	88.7%
SJT	2/8/09	19.05	18.87	0.55	86.98	2.18	1.9%	34.2%	-32.3%
SGU	2/8/09	2.55	4.14	0.20	86.98	2.18	70.4%	34.2%	36.1%
TC	2/8/09	4.33	14.31	-	86.98	2.18	230.5%	34.2%	196.3%
bioc	2/14/09	3.72	4.37	-	82.76	2.18	17.5%	41.1%	-23.6%
FORR	2/14/09	17.56	25.95	-	82.76	2.18	47.8%	41.1%	6.7%
ZYXI.OB	2/14/09	1.20	1.18	-	82.76	2.18	-1.7%	41.1%	-42.7%
FRD	2/21/09	4.95	6.09	-	77.42	2.18	23.0%	50.8%	-27.8%
SOLR	2/21/09	4.22	5.95	-	77.42	2.18	41.0%	50.8%	-9.8%
MTXX	2/21/09	17.90	4.67	-	77.42	2.18	-73.9%	50.8%	-124.7%
TYPE	2/21/09	3.02	9.58	-	77.42	2.18	217.2%	50.8%	166.4%
PTIE	2/21/09	5.41	5.16	-	77.42	2.18	-4.6%	50.8%	-55.4%
PDO	2/21/09	3.19	5.21	-	77.42	2.18	63.3%	50.8%	12.5%
SAPE	2/21/09	3.38	8.31	-	77.42	2.18	145.9%	50.8%	95.1%
VDSI	2/21/09	5.25	6.50	-	77.42	2.18	23.8%	50.8%	-27.0%
IGTE	2/21/09	2.99	10.19	-	77.42	2.18	240.8%	50.8%	190.0%
DECK	2/28/09	41.27	111.99	-	73.93	2.18	171.4%	57.9%	113.4%
KTII	2/28/09	55.48	113.52	-	73.93	2.18	104.6%	57.9%	46.7%
INT	2/28/09	29.01	53.96	-	73.93	2.18	86.0%	57.9%	28.1%
ICAD	2/28/09	0.90	1.64	-	77.42	2.18	82.2%	50.8%	31.4%
EXBD	3/6/09	12.96	23.88	-	68.92	2.18	84.3%	69.4%	14.9%
DISH	3/6/09	9.27	21.16	-	68.92	2.18	128.3%	69.4%	58.9%
QLTI	3/6/09	1.41	4.76	-	68.92	2.18	237.6%	69.4%	168.2%
SRDX	3/6/09	16.87	21.11	-	68.92	2.18	25.1%	69.4%	-44.3%
INFI	4/16/09	5.83	6.55	-	87.08	1.62	12.3%	33.4%	-21.1%
CRAY	5/1/09	3.98	6.46	-	87.89	1.62	62.3%	32.2%	30.1%
TWX	5/1/09	22.84	28.76	-	87.89	1.62	25.9%	32.2%	-6.3%
RST	5/1/09	29.83	18.62	-	87.89	1.62	-37.6%	32.2%	-69.8%
ulcm	5/1/09	8.72	9.91	-	87.89	1.62	13.6%	32.2%	-18.5%
AAV	5/15/09	3.41	7.29	-	88.71	1.62	113.8%	31.0%	82.8%
AMED	5/29/09	30.43	50.12	-	92.53	1.62	64.7%	25.6%	39.1%
UTA	5/29/09	7.90	10.63	-	92.53	1.62	34.6%	25.6%	9.0%
PFE	6/5/09	14.51	18.68	-	94.55	1.62	28.7%	22.9%	5.9%
VM	6/5/09	4.55	5.50	-	94.55	1.62	20.9%	22.9%	-2.0%
ONTY	6/11/09	2.60	5.85	-	95.08	1.62	125.0%	22.2%	102.8%
BPI	6/19/09	16.74	15.42	-	92.04	1.10	-7.9%	25.7%	-33.6%
GME	6/19/09	22.95	20.29	-	92.04	1.10	-11.6%	25.7%	-37.3%
SHAW	7/10/09	23.69	32.96	-	87.96	1.10	39.1%	31.5%	7.6%
RTN	7/24/09	45.39	52.45	0.62	98.06	1.10	16.9%	18.0%	-1.0%
CBZ	7/31/09	6.54	7.52	-	98.81	1.10	15.0%	17.1%	-2.1%
CBI	7/31/09	13.95	22.59	-	98.81	1.10	61.9%	17.1%	44.9%
DRC	7/31/09	29.11	33.58	-	98.81	1.10	15.4%	17.1%	-1.7%
JEC	7/31/09	40.98	41.74	-	98.81	1.10	1.9%	17.1%	-15.2%
NPSP	7/31/09	3.89	3.37	-	98.81	1.10	-13.4%	17.1%	-30.4%
ASGN	7/31/09	4.23	7.41	-	98.81	1.10	75.2%	17.1%	58.1%
AGX	8/7/09	12.35	14.70	-	98.81	1.10	19.0%	17.1%	2.0%
BBND	8/7/09	4.00	3.58	-	98.81	1.10	-10.5%	17.1%	-27.6%
LHCG	8/7/09	24.55	32.44	-	98.81	1.10	32.1%	17.1%	15.1%
RGR	8/7/09	11.45	10.41	-	98.81	1.10	-9.1%	17.1%	-26.1%
PRIM	8/7/09	6.95	7.70	0.05	100.79	1.10	11.5%	14.8%	-3.2%
SEPR	8/7/09	18.12	23.00	-	100.79	1.10	26.9%	14.8%	12.2%
CEU	8/21/09	5.10	7.09	-	102.96	1.10	39.0%	12.3%	26.7%
CYTK	8/21/09	3.04	3.33	-	102.96	1.10	9.5%	12.3%	-2.8%
CMFO	8/28/09	4.55	8.00	-	102.96	1.10	75.8%	12.3%	63.5%
NAVR	9/4/09	1.79	2.14	-	102.60	1.10	19.6%	12.7%	6.8%
WTW	9/11/09	26.00	29.37	0.35	104.77	1.10	14.3%	10.4%	3.9%
MIPS	9/18/09	3.72	4.65	-	106.72	1.10	25.0%	8.4%	16.6%
ESI	10/30/09	90.35	100.07	-	103.56	0.59	10.8%	11.2%	-0.4%
VRSK	10/30/09	27.43	30.00	-	103.56	0.59	9.4%	11.2%	-1.8%
APOL	11/6/09	55.99	60.50	-	107.13	0.59	8.1%	7.5%	0.6%
CBST	11/6/09	17.60	18.78	-	107.13	0.59	6.7%	7.5%	-0.8%
SNTA	11/6/09	3.20	4.52	-	107.13	0.59	41.3%	7.5%	33.8%
IMMU	11/6/09	3.61	4.05	-	107.13	0.59	12.2%	7.5%	4.7%
PBH	11/13/09	6.95	7.74	-	109.62	0.59	11.4%	5.1%	6.3%
IDCC	11/20/09	23.56	26.53	-	109.43	0.59	12.6%	5.2%	7.4%
PDLI	11/27/09	6.63	6.75	-	109.57	0.59	1.8%	5.1%	-3.3%
CBPO	12/4/09	9.06	12.92	-	111.01	0.59	42.6%	3.7%	38.9%
XOMA	12/4/09	0.72	0.70	-	111.01	0.59	-3.0%	3.7%	-6.7%
SHE	12/31/09	5.15	7.38	-	111.44	-	43.3%	2.8%	40.5%
						Top 50 Portfolio
						Totals	22.9%	3.1%	19.9%
53.4% of stocks beat the S&P 500 Benchmark						Closed	12.1%	-9.1%	21.2%
S&P C			114.57			Open	46.3%	29.2%	17.1%

Top 30

Symbol		Original	Current	Dividend	S&P O	S&P D	Stock Chg	S&P Chg	Diff
COH	2/14/09	13.97	37.27	-	82.76	2.18	166.8%	41.1%	125.7%
DELL	2/21/09	8.41	14.85	-	77.42	2.18	76.6%	50.8%	25.8%
SOLR	2/21/09	4.22	5.95	-	77.42	2.18	41.0%	50.8%	-9.8%
DECK	2/28/09	41.27	111.99	-	73.93	2.18	171.4%	57.9%	113.4%
FWLT	2/28/09	15.04	34.82	-	73.93	2.18	131.5%	57.9%	73.6%
HCKT	2/28/09	2.56	2.63	-	73.93	2.18	2.7%	57.9%	-55.2%
MWW	2/28/09	6.59	18.91	-	73.93	2.18	186.9%	57.9%	129.0%
PTIE	2/28/09	4.53	5.16	-	73.93	2.18	13.9%	57.9%	-44.0%
TRLG	2/28/09	10.22	21.26	-	73.93	2.18	108.0%	57.9%	50.1%
qlti	3/6/09	1.41	4.76	-	68.92	2.18	237.6%	69.4%	168.2%
exbd	3/6/09	12.96	23.88	0.74	68.92	2.18	90.0%	69.4%	20.6%
FIX	3/13/09	9.73	13.16		76.09	2.18	35.3%	53.4%	-18.2%
DBTK	3/13/09	6.65	9.90	-	76.09	2.18	48.9%	53.4%	-4.6%
LOOP	3/13/09	5.77	10.17	-	76.09	2.18	76.3%	53.4%	22.8%
PRO	3/27/09	4.29	9.77	-	81.61	1.62	127.7%	42.4%	85.4%
ACN	4/9/09	27.71	42.57	-	85.81	1.62	53.6%	35.4%	18.2%
INFI	4/16/09	5.83	6.55	-	87.08	1.62	12.3%	33.4%	-21.1%
TSRA	5/1/09	14.52	20.29	-	87.89	1.62	39.7%	32.2%	7.5%
RST	5/1/09	29.83	18.62	-	87.89	1.62	-37.6%	32.2%	-69.8%
ulcm	5/1/09	8.72	9.91	-	87.89	1.62	13.6%	32.2%	-18.5%
TYPE	5/1/09	3.80	9.58	-	87.89	1.62	152.1%	32.2%	119.9%
CRAY	5/1/09	3.98	6.46	-	87.89	1.62	62.3%	32.2%	30.1%
INT	5/8/09	41.90	53.96	-	92.98	1.62	28.8%	25.0%	3.8%
IPHS	5/15/09	15.03	22.52	-	88.71	1.62	49.8%	31.0%	18.9%
GNI	5/29/09	86.75	93.99	3.60	92.53	1.62	12.5%	25.6%	-13.1%
UTA	5/29/09	7.90	10.63	-	92.53	1.62	34.6%	25.6%	9.0%
FRX	6/5/09	23.66	31.04	-	94.55	1.62	31.2%	22.9%	8.3%
ONTY	6/11/09	2.60	5.85	-	95.08	1.62	125.0%	22.2%	102.8%
VM	6/11/09	4.24	5.50	-	95.08	1.62	29.7%	22.2%	7.5%
BPI	6/19/09	16.74	15.42	-	92.04	0.51	-7.9%	25.0%	-32.9%
MTXX	7/2/09	5.77	4.67	-	91.84	0.51	-19.1%	25.3%	-44.4%
JTX	7/2/09	5.74	5.06	-	91.84	0.51	-11.8%	25.3%	-37.1%
GIGM	7/24/09	4.98	3.31	-	98.06	0.51	-33.5%	17.4%	-50.9%
CBI	7/31/09	13.95	22.59	-	98.81	0.51	61.9%	16.5%	45.5%
BR	7/31/09	17.27	22.71	0.28	98.81	0.51	33.1%	16.5%	16.7%
LO	7/31/09	73.72	77.95	-	98.81	0.51	5.7%	16.5%	-10.7%
ITWO	8/7/09	14.36	19.14	-	101.20	0.51	33.3%	13.7%	19.6%
BKE	8/14/09	26.54	31.91	2.00	100.79	0.51	27.8%	14.2%	13.6%
GTLS	8/14/09	20.73	20.67	-	100.79	0.51	-0.3%	14.2%	-14.5%
PRIM	8/14/09	6.95	7.70	0.05	100.79	0.51	11.5%	14.2%	-2.7%
SEPR	8/14/09	18.12	23.00	-	100.79	0.51	26.9%	14.2%	12.8%
PVSW	8/14/09	5.00	5.49	-	100.79	0.51	9.8%	14.2%	-4.4%
CEU	8/21/09	5.10	7.09	-	102.96	0.51	39.0%	11.8%	27.3%
cytk	8/28/09	3.04	3.33	-	103.38	0.51	9.5%	11.3%	-1.8%
jcom	8/28/09	22.14	20.10	-	103.38	0.51	-9.2%	11.3%	-20.5%
AMED	9/4/09	35.00	50.12	-	102.06	0.51	43.2%	12.8%	30.4%
MIPS	9/18/09	3.72	4.65	-	106.72	0.51	25.0%	7.8%	17.2%
MHP	9/25/09	23.67	33.95	0.23	104.45	0.59	44.4%	10.3%	34.1%
AGX	10/16/09	12.50	14.70	-	108.89	0.59	17.6%	5.8%	11.8%
BBND	10/30/09	3.70	3.58	-	103.56	0.59	-3.2%	11.2%	-14.4%
FLR	10/30/09	44.42	49.76	-	103.56	0.59	12.0%	11.2%	0.8%
RGR	10/30/09	10.62	10.41	-	103.56	0.59	-2.0%	11.2%	-13.2%
RTN	10/30/09	45.28	52.45	0.31	103.56	0.59	16.5%	11.2%	5.3%
VRSK	10/30/09	27.43	30.00	-	103.56	0.59	9.4%	11.2%	-1.8%
immu	11/6/09	3.61	4.05	-	107.13	0.59	12.2%	7.5%	4.7%
cbst	11/6/09	17.60	18.78	-	107.13	0.59	6.7%	7.5%	-0.8%
snta	11/6/09	3.20	4.52	-	107.13	0.59	41.3%	7.5%	33.8%
CNU	11/13/09	3.10	4.37	-	109.62	0.59	41.0%	5.1%	35.9%
IDCC	11/20/09	23.56	26.53	-	109.43	0.59	12.6%	5.2%	7.4%
PDLI	11/27/09	6.63	6.75	-	109.57	0.59	1.8%	5.1%	-3.3%
ARO	12/4/09	28.95	33.56	-	111.01	0.59	15.9%	3.7%	12.2%
CBPO	12/4/09	9.06	12.92	-	111.01	0.59	42.6%	3.7%	38.9%
SHE	12/31/09	5.15	7.38	-	111.44	-	43.3%	2.8%	40.5%
						Totals	27.4%	8.4%	19.0%
66.4% of stocks beat the S&P 500 Benchmark						Closed	11.8%	-9.7%	21.5%
S&P C			114.57			Open	42.5%	26.0%	16.5%