Whoops - In a Good Way

I was doing some year-end clean-up on my Excel Spreadsheet I use to track my MFI portfolio performance and I found an error I made back in June of 2009. The error snowballed a bit but in the end was worth about 2 points. So I ended the year about 2 points higher than I had thought I was at... which is essentially break-even. I was up another 2 points today, so I am actually in the black... so "Whoops - In a Good Way".

Huge day for me, the mechanical part of my portfolio was up 2.5%... overall up 1.6%, it has been a steady trend that the mechanical part of my portfolio has been doing better. Obviously I have no right to be picking stocks.

That being said, I must comment that I did make some fast money today, though not directly MFI. I do have a master portfolio in Yahoo of a bunch of MFI stocks (past and present) and I often skim the headlines to see if anything interesting is happening in the MFI-universe. This release caught my eye before the opening bell (China Direct Industries Provides Financial Outlook for Fiscal 2010 Ending September 30, 2010). As you may recall, I sold CDII several months ago at $1.62. They had fallen last week to about $1.20. Then they had this announcemnet that essentially said they expected to make between $8-10m in 2010. Their enterprise value is only about $20m, so that is a huge implied earning yield. So I jumped in and bought a bunch of shares at $1.32 right after the opening bell. Well, that turned out to be a very smart move. CDII closed up 49% at $1.76. Clearly, if I wasn't familiar with the stock and their story I'd have never bought at the opening bell.

I did also buy SHE (the newest mechanical stock) at $5.31. It closed at $5.38. Finally, I sold AIRV as they are being taken over and it was now a pure arbitrage play.

So it was a busy day to start 2010. I'll show the revised graph this weekend, hope it is still above the line!