Sunday, April 03, 2011

Quickie Update

As I mentioned, I am traveling. So I do not have many of my normal tracking data or graphs etc with me. My foray into sticking with the RTO stocks has really hurt my performance since November. It was a mistake. There, I said it. I will begin unwinding my positions over the next few months. Due to their poor performance, my overall results since I started in 2006 are now almost exactly equal to the Russell index. Here is a table below that shows my annual results and inception to date. You can see I am only one point above the Russell 3000 (while my MFI index is 8 points ahead):

MFI Performance

ITD Annual
2006 10.74% 10.74%
2007 -6.57% -15.63%
2008 -41.60% -37.50%
2009 0.71% 72.47%
2010 10.90% 10.12%
2011 9.03% -1.69%

IWV Performance

ITD Annual
2006 11.23% 11.23%
2007 4.65% -5.91%
2008 -30.54% -33.63%
2009 -13.95% 23.87%
2010 1.65% 18.14%
2011 8.09% 6.34%

MFI Index Performance

ITD Annual
2006 8.30% 8.30%
2007 -6.88% -14.02%
2008 -35.98% -31.26%
2009 -11.07% 38.92%
2010 9.19% 22.77%
2011 16.27% 6.49%

SCEI was my latest flop (and NEWN before it). Both of them had what appeared to be "good" earnings. But it is clear that no one believes them any more.

SCEI was down 13% on Friday as I think the big negative was a delay of their 10k (Sino Clean's 131% Revenue Growth Viewed Skeptically by Some).

NEWN was down from $5.77 to $4.81 on the week, despite this very nice headline (New Energy Systems Group Reports 2010 Results; Revenues rise 259% to $94.7 Million, Adjusted EPS of $1.46 Beats Estimates).

Again, the only reason for a stock earning $1.46 per share, growing revenues by over 200%, giving strong guidance and trading at under $5 is that no one believes the numbers.

It has been an expensive lesson (so far) and I know there are many of you on the board saying "i told you so", and I admit you were right. Don't cry for me and the family. MFI is about 10% of our total investments and these RTOs are certainly less than 1/2 of my MFI. So we'll still be able to buy our dream house.

1 comment:

drew said...

I have been burned by these as well. I have had 6 or so, including the ones you mention. I'm riding them out, even though they could go to 0. Like you, they are a small part of my portfolio. I am excited by my performance of non RTOs in my MFI portfolio. Once they are out, I am hoping to crush the markets long-term. Over the 15 months I've been doing it, I am easily 5-10% ahead of markets annually without the RTOs. MFI1 on is where I am tracking actual portfolio. 12/09 and 3/10 portfolios were not added, but did very well.