Saturday, October 29, 2011

October 29th 2010 Tracking Portfolio

Another Tracking Portfolio Loses

I closed the October 29th 2010 tracking portfolio today. As a reminder, I create a tracking portfolio of 50 stocks greater than$100m every month and hypothetically hold them for a year. I have been doing this since January 2006.

The portfolio lost to the Russell 3000 going down 2.9% vs the benchmark gain of 10.4%. That makes it the 10th straight portfolio to close behind the benchmark. To make matters worse, all but one of the 11 open portfolios are also trailing. One can seriously question whether the MFI approach is working. Here is the listing of stocks followed by how all portfolios have fared:

Stock Initial Price End Price Percent Change 52 week low Mkt Cap
AGX 8.47 13.84 63% 7.98 112
CNXT 1.50 2.40 60% N/A 140
GXDX 17.02 25.00 47% N/A 300
TNAV 6.29 9.03 44% 5.62 206
GMAN 10.03 14.27 42% 9.70 186
SNDK 37.63 53.38 42% 32.24 8,868
CNU 4.50 6.38 42% N/A 272
LO 80.92 114.61 42% 72.40 13,036
HRB 11.28 15.44 37% 11.15 3,591
JCG 31.99 43.43 36% N/A 2,003
TER 11.24 15.02 34% 10.51 1,984
MRX 29.48 39.32 33% 24.97 1,750
APOL 37.48 48.16 28% 33.75 5,555
PDLI 4.84 6.15 27% 4.66 619
VPHM 16.36 20.60 26% 14.62 1,289
UIS 23.05 27.28 18% 14.18 987
CMTL 29.75 33.41 12% 23.51 867
PPD 60.18 66.50 11% N/A 598
GTAT 8.23 8.95 9% 6.65 1,216
SNTA 3.70 3.90 5% 3.15 147
UNTD 5.80 6.11 5% 4.80 518
MSFT 26.02 26.98 4% 23.65 225,009
SNTS 3.13 3.24 4% 2.40 186
IPXL 18.84 18.93 0% 14.46 1,355
EME 25.79 25.77 0% 18.25 1,711
RTN 44.46 43.54 -2% 38.35 16,613
CECO 17.54 17.15 -2% 12.32 1,414
ZLCS 1.30 1.27 -2% 0.83 114
IMMU 3.93 3.80 -3% 2.85 289
USMO 14.83 13.23 -11% 12.29 376
KIRK 13.45 11.32 -16% 7.69 268
PRSC 16.43 12.62 -23% 8.35 210
TNDM 14.62 11.10 -24% 9.02 478
CHKE 17.49 13.16 -25% 11.39 165
TSRA 19.71 14.68 -26% 11.16 975
OSK 29.51 21.89 -26% 14.42 2,679
ASTX 2.78 2.05 -26% 1.79 169
CRME 5.06 3.57 -29% 3.21 317
PETS 14.89 10.29 -31% 8.56 353
VECO 41.50 28.13 -32% 23.49 1,587
LPS 28.38 17.73 -38% 13.69 2,572
LHCG 26.90 16.00 -41% 15.39 488
ARO 24.40 14.30 -41% 9.16 2,324
FSYS 40.98 23.87 -42% 17.22 714
AFAM 34.53 19.64 -43% 14.71 316
AMED 25.46 13.95 -45% 12.64 744
NEP 6.72 2.70 -60% 1.87 204
COCO 5.23 1.87 -64% 1.40 474
GTIV 23.28 4.50 -81% 3.50 697
SCEI 7.11 1.20 -83% 0.65 119

Average of Percent Change
Date Total IWV
1/6/2006 16.0% 10.9%
2/17/2006 21.2% 14.6%
3/29/2006 13.0% 9.6%
4/7/2006 10.3% 12.1%
5/12/2006 20.4% 18.6%
5/31/2006 29.2% 23.3%
6/30/2006 22.4% 20.0%
7/31/2006 19.7% 17.3%
8/31/2006 13.0% 13.3%
9/28/2006 12.7% 14.6%
10/27/2006 10.3% 12.0%
11/29/2006 -0.3% 4.8%
12/28/2006 -6.9% 3.4%
1/26/2007 -10.2% -6.6%
2/27/2007 -3.7% -1.0%
3/26/2007 -9.8% -5.5%
4/27/2007 -10.9% -5.0%
5/29/2007 -11.5% -6.3%
7/3/2007 -30.0% -15.6%
7/30/2007 -19.9% -11.5%
8/30/2007 -12.5% -8.7%
9/27/2007 -19.0% -18.2%
11/2/2007 -40.4% -34.3%
11/28/2007 -40.1% -38.3%
12/28/2007 -36.3% -40.0%
1/25/2008 -36.4% -35.9%
2/26/2008 -51.7% -41.5%
3/24/2008 -40.9% -36.8%
4/25/2008 -25.6% -31.0%
5/28/2008 -22.2% -33.6%
7/2/2008 -11.7% -25.3%
7/29/2008 -10.5% -20.9%
8/29/2008 -13.8% -17.9%
9/26/2008 -4.3% -10.0%
10/31/2008 18.7% 13.9%
11/26/2008 50.9% 27.7%
12/26/2008 48.9% 32.3%
1/23/2009 59.3% 36.4%
2/27/2009 92.8% 55.6%
3/27/2009 85.8% 48.1%
4/24/2009 69.7% 45.8%
5/29/2009 31.8% 22.8%
6/29/2009 21.3% 24.0%
7/29/2009 19.5% 15.9%
8/28/2009 7.4% 8.8%
9/25/2009 12.6% 12.4%
10/30/2009 22.7% 18.3%
11/27/2009 24.3% 13.6%
12/31/2009 23.7% 18.1%
1/22/2010 19.0% 20.6%
2/26/2010 18.6% 23.6%
3/25/2010 10.0% 15.4%
4/23/2010 7.1% 11.4%
5/28/2010 19.3% 25.4%
6/29/2010 16.7% 25.7%
7/29/2010 5.4% 20.1%
9/2/2010 7.3% 10.1%
9/24/2010 -4.3% 0.3%
10/29/2010 -2.9% 10.4%
11/26/2010 1.6% 9.3%
1/3/2011 -7.2% 1.8%
1/28/2011 -9.0% 1.6%
2/25/2011 -8.5% -2.2%
3/24/2011 -8.5% -1.7%
4/21/2011 -12.1% -4.1%
5/27/2011 -8.6% -3.9%
6/24/2011 -5.6% 0.8%
7/29/2011 -7.1% -0.6%
8/26/2011 8.6% 9.7%
9/30/2011 19.7% 14.1%
Grand Total 5.1% 4.5%
Closed 6.9% 4.9%
Open -5.6% 1.1%

Special Portfolios

As people may know, I also track two special sub-portfolios. One is called "new" and only has stocks that have not been in a tracking portfolio in the prior 12 months. The second is called "dividend" and only picks stocks with at least a dividend of 2.6% (per Yahoo Finance). The dividend portfolio continues to way out perform (it was up 6.4% and is beating the Russell in 5 of the open 11 portfolios).

Stock Initial Price End Price Percent Change
LO 80.92 114.61 42%
HRB 11.28 15.44 37%
PDLI 4.84 6.15 27%
CMTL 29.75 33.41 12%
UNTD 5.80 6.11 5%
RTN 44.46 43.54 -2%
USMO 14.83 13.23 -11%
CHKE 17.49 13.16 -25%
PETS 14.89 10.29 -31%

The "new" portfolio has been pretty poor. It was down 8% in the past year and the average open positions are down 7%.

In addition, I do like to track performance solely using percentages. This is because a portfolio that goes up50% one year and down 50% the next leaves you at a worse absolute $ amount than one that goes up 5% and then down 5%. The chart below shows how much money you'd have if you spread $100,000 evenly over the first 12 months:

Category Value
Total 111,611
Total New 101,687
Total Dividend 218,287
Total Russell 3K 111,847

So while the first table showed that MFI is "beating" the Russell 3000, this table shows we have been losing do to the greater volatility. The standard deviation (a measure of spread) between all the monthly tracking portfolios is about 33%, versus 25% for the Russell 3000.

For those of you playing along at home, here are the dividend stocks in the 10/28/2011 portfolio:
Stock Initial Price Mkt Cap Yield
UNTD 6.11 532 6.5%
USMO 13.23 300 15.1%
STRA 87.84 1,070 4.6%
RTN 43.54 15,475 3.8%
PETS 10.29 216 4.9%
PDLI 6.15 854 7.3%
NOC 57.92 15,306 14.3%
GNI 105.00 157 12.4%
DLX 23.64 1,247 4.2%
CMTL 33.41 816 3.1%
CHKE 13.16 117 7.4%
HRB 15.44 4,672 3.9%


Then here are the new stocks:

Stock Initial Price
MDF 6.70
HPQ 27.94
CPIX 5.82

Have a great weekend everyone!

Late Addendum: I saw that MSFT wasn't in the dividend list (again). That is because their trailing dividend was 64 cents which is a hair under my 2.6% screen. However, they just increased their dividend to 80 cents, so I have over-ridden and added them to list for October 28th 2011.