I have been tracking and investing in MFI since January 2006. I know JG said to give it 3 to 5 years, but I am here to say officially that almost 4.5 years into it that it ain't working. This is not based on my actual investing, which it has been pointed out has not followed the rules to the letter, though it has in spirit. This is rather based upon doing exactly what JG backtested, taking the top 25 to 30 stocks every month and holding them for a year. That is exactly what my tracking portfolios do and if you had invested $100,000 evenly in 12 months of 2006, you'd be sitting on $96k. Granted that is better than the $90k you'd have if you'd have gone for the Russell 3000 in the same fashion, but it is pretty lame and works out -1% annual return vs -2% for the IWV.
At that rate, we are not going to have to worry about JG's final chapter when he asks what we should do with all the money.
I am not sure I understand why it has been so poor. These have been unprecedented times, to be sure. But I have been stunned how the approach has underperformed in bear markets. I do wonder if the backtesting wasn't over a long enough period of time as the years JG used were pretty good investing years, except for the bear market post the internet bubble. And that was not your everyday bear market, there were many "old economy" value stocks that did quite well while Yahoo, Pets.com and others crashed.
What does everyone else think? Need to wait longer to judge MFI (MIA?) or was it over-hyped (DOA?).