First the good news. It is a beautiful spring morning here in Connecticut. I am sitting out on my back deck, in the early morning as the sun rises with a cup of coffee. My deck is very secluded and looks out over woods. I can hear the birds chirping and a woodpecker in the distance.
Now the not so good news, the markets are essentially giving back all the gains of 2012 in what is looking like an instant replay of 2011. And MFI is taking it on the chin more than the indices. First, here is a table of my MFI Index (the 50 stocks over $100m selected on January 1st each year back to 2006).
|MFI Index Performance|
Sadly, the index has gone into the red for 2012. The chart shows that after 7 years, you'd be up a total of 6.23%. Note that is not annualized, that is cumulative. Here is a table of the 50 stocks in 2012:
|Stock||Start||Last Week||Current||YTD Change||Weekly Change|
As you can see, some stocks had a "bad week", including GTAT which I had bought. In total, the index was down almost 6%.
Finally, here is a chart of how MFI has done day by day (sounds like a song).
You know, I hate to beat the drum, but it does make you wonder when we can declare that MFI doesn't work? When I read Seth Klarman's "Margin of Safety", he said that there could be no formula to selecting stocks, one had to do the homework. I am not saying that Greenblatt's book and list are not a great starting point, but there have been a large share of duds in his lists that have muted the performance.
Not sue if people saw it about 10 days ago, but JG was on CNBC talking about his "formula" and individual stocks that he likes (Famed Value Investor Says 5 Stocks Too Cheap - Fast Money - CNBC
). I always say ignore his stock picks at your peril, so here is what he liked: AAPL, MSFT,HPQ, BBY and KSS. I did buy Kohls post his interview and I am thinking about HPQ, which has gotten very cheap.
I did make a couple changes to my dividend portfolio. I sold USB (which had been great) and I bought JPM as I felt it was oversold. I also bought KSS as discussed. Some great dividends came in, KSW went x a 20 cent dividend (that is 10%), STO went x a $1.12 dividend and WBK went x a $4.20 dividend. Overall on the year, the dividend portfolio is up 3%.
An interesting aside, on stock I own (TROX) had its earning yesterday an announced they were going to recommend a special one time $25 dividend (the stock sells close to $160) and they were going to implement a dividend policy (Tronox Incorporated Reports Record First Quarter Results).
Well, back to my java!