Tale of the Tape

Another week is in the books. While my MFI portfolio is still not having a "good" year, it does appear to be making a little headway. This first table measures my annual percentage increases/decreases for my portfolio compared with the benchmark Russell 3000. It also shows the cumulative percentages (ITD).

MFI Annual Performance
Year	ITD	Annual
2006	10.74%	10.74%
2007	-6.57%	-15.63%
2008	-41.60%	-37.50%
2009	0.71%	72.47%
2010	-3.57%	-4.25%
IWV Annual Performance
Year	ITD	Annual
2006	11.23%	11.23%
2007	4.65%	-5.91%
2008	-30.54%	-33.63%
2009	-13.95%	23.87%
2010	-9.92%	4.69%

This next table measures my open positions. For each open position, it compares the stock's gain with the Russell 3000 as if it were bought at the same time. The bottom row of the table re-weights the comparisons (not using a straight average) as all stocks do not have the same initial investment.

Symbol	Initial Price	Current Price	Avg of Gain	Avg of IWV Gain
CCME	$10.02	$10.03	2.1%	5.1%
CEL	$26.61	$30.62	18.3%	5.9%
CHKE	$18.09	$18.10	3.5%	6.6%
CMFO	$4.80	$5.24	9.8%	7.2%
CMTL	$26.66	$27.50	3.2%	0.1%
eesc	$2.60	$2.30	-11.5%	3.9%
FLL	$3.15	$3.19	1.3%	3.4%
INTC	$18.91	$19.32	2.2%	1.6%
KSW	$3.48	$3.04	-9.6%	6.7%
MAIL	$6.13	$5.99	5.1%	2.4%
NEWN	$7.13	$5.99	-14.0%	0.5%
PM	$44.35	$55.55	28.0%	5.2%
RAI	$53.55	$58.85	14.9%	0.7%
TTT	$9.60	$14.35	53.3%	15.5%
UNTD	$5.78	$5.94	4.9%	8.2%
UTA	$5.66	$4.79	-2.7%	6.3%
VALU	$14.70	$14.24	-1.8%	7.3%
Grand Total	$13.14	$14.35	6.1%	5.6%
Actual Totals (adj as all purchase not equal $)			6.6%	4.8%

The interesting thing about this table that my readers should note, is that my open stocks are outperforming the benchmark. It has been a while since this was true and is another signal to me that MFI is starting to work a bit again.

Why is MFI Hot 'n Cold?

I have wondered about the fact that MFI is hot and then cold. In his book, JG explains that people would not follow the system (and thus it would keep working) for the very fact that it often didn't work (that is comforting). He stated that in his studies, it only outperformed 7 of 12 months. What he didn't say is that it would not work for 10 straight months and then it would work for 14 straight (although we haven't even had that good a ratio... yet). I did read a Ken Fisher book (I think it was "The Only Three Questions That Count"). In this book (I should have read more closely, he discusses how certain types of stocks perform better in various potions of the economic cycle. So there are times small cap value stocks do better and there are times mid cap growth stocks do better etc. That may be a component of the hot and cold streakiness... I guess I need to re-read that chapter and lay it out better here.