Thursday, January 06, 2011

Gathering Momentum?

Going Up?

I have commented many times how MFI is streaky. Well, right now it is on a hot streak! What is the word they use in craps? A "heater"! Check out this graph:

It really brings home the point on how since mid-November the MFI Index has been blazing. It also shows how my portfolio has been lagging. But I can not be too glum. Since I started with MFI, I am in a dead heat with the strict index. I am not sure "why" the formula is working better now. Perhaps things are getting back to "normal".


I did make my first substantial transaction in about a month today. I bailed out early on STRA. I know, I know, it was part of my "dividend" strategy. But I was up 17% and I have been reading "The Big Short: Inside the Doomsday Machine" and I started to get nervous. The book profiles three hedge funds that figured out the subprime bust well in advance, making hundreds of millions for their investors. One of the "smart" guys was Steven Eisman. Guess what stock he is currently shorting? (Steve Eisman's Next Big Short: For-Profit Colleges). Thus the sale of STRA. I did replace STRA with a safer stock, AZN. This is AstraZeneca, which rates in the top 50 or so in my list (View) and has a yield in excess of 4%. I also added to my Microsoft position and then kept the remainder in cash (8% currently).

1 comment:

AndrewsDad said...

I found the "heater" comment funny after coming back from Vegas a few weeks ago and getting into multiple "discussions" on if a table can get hot or not. I contend that since dice have no memory, it is nothing more than a random combination of rolls that have gone the players way and the next roll has the same probability as any other roll, slightly in the houses favor.