I am sipping some fine Italian coffee I got for Christmas while watching Squawk Box on CNBC. Does anyone else feel Joe gets too mean with his guests and co-hosts? I think he is a smart guy, but this isn't supposed to be Crossfire.I took a look this morning and even with all my problems with RTOs and MFI in general, I am up 1.28%. Woo-woo! My dividends stocks continue to pay dividends. My churning has dropped amazingly. The last stock I bought was December 15th, and the last sale was CHKE on the 12th... well I did "buy" some shares of WBK and JQC through reinvestments.
I do have RTN going x-dividend today. It has been a solid investment thus far. I was thinking about why MFI has flopped the past 18 months. I think they were in the crosshairs of some extremely negative trends/sectors.
- Chinese Reverse Mergers - clearly the CSKIs, UTAs, SCEIs and CEUs were money down the toilet.
- Nursing Home Fiasco - when the Govt investigates the practices of an industry, sometimes there is a smoking gun. Stocks like AFAM, AMED and PRSC all have taken hard hits.
- Education Stocks - similar to Nursing Homes, many of these stocks rely on Govt subsidies to do well. And recruitment practices along with poor job placement rates came under scrutiny. APOL, CECO, COCO, ESI, STRA and LINC all took serious dives.
Another area that really struggled was anything to do with solar, such as GTAT, ASYS and PWER, which also requires some govt subsidies to get on par with traditional energy.
What does it mean, when MFI is over-weight in sectors that blow up? Is this a flaw in MFI? Or does this mean you need to stick with it as these sectors will turn back around? Or does it mean you should think about not over-weighting in sectors when using MFI?
These are certainly not the first sectors to blow up. I recall a few years ago, refineries were numerous on the lists (Frontier, WNR and HOC). Most of them crashed and burned.
Interested as always in people's thoughts.
Happy New Year!
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