in The Little Book That Beats the Stock Market since January 2006. Every month I take the top 50 stocks over $100m market cap from his website and track how that portfolio of stocks fares versus the Ruseell 3000 for the next 12 months. It has been an uphill struggle as the tracking portfolios have under-performed, driven in part by Chinese reverse merger fiascos, for-profit education stocks and home health care stocks all being proverbial albatrosses.
This month-end was sadly no different, going up a respectable 12.6%, but getting trounced by the R3K, which was up a more respectable 21%! Here are the 50 stocks in descending performance order:
| Stock | Initial Price | End Price | Percent Change | 52 week low | Mkt Cap |
| CRAY | 5.40 | 11.62 | 115% | 4.96 | 196 |
| LPS | 15.86 | 27.70 | 75% | 12.91 | 1,320 |
| PRX | 28.73 | 49.88 | 74% | 24.85 | 1,034 |
| AGX | 10.00 | 16.63 | 66% | 9.01 | 136 |
| KLAC | 34.45 | 53.36 | 55% | 33.20 | 5,762 |
| NSR | 24.30 | 37.46 | 54% | 22.98 | 1,753 |
| GTIV | 7.29 | 10.65 | 46% | 2.81 | 224 |
| VPHM | 18.66 | 26.85 | 44% | 17.20 | 1,379 |
| MDP | 22.86 | 32.71 | 43% | 21.10 | 1,068 |
| DLX | 19.86 | 28.29 | 42% | 17.65 | 1,024 |
| PDLI | 5.22 | 7.30 | 40% | 5.15 | 797 |
| OSK | 18.28 | 24.72 | 35% | 14.07 | 1,598 |
| NOC | 50.36 | 67.40 | 34% | 49.97 | 14,244 |
| TER | 11.84 | 15.74 | 33% | 10.37 | 2,109 |
| KLIC | 8.65 | 11.43 | 32% | 6.71 | 600 |
| ASTX | 2.10 | 2.67 | 27% | 1.51 | 124 |
| UIS | 16.75 | 21.16 | 26% | 13.77 | 708 |
| MSFT | 24.57 | 30.56 | 24% | 24.26 | 205,798 |
| SNDK | 34.80 | 43.04 | 24% | 30.99 | 8,107 |
| MIPS | 5.13 | 6.32 | 23% | 3.91 | 257 |
| HRB | 13.28 | 16.35 | 23% | 12.73 | 4,138 |
| EGY | 6.01 | 7.37 | 23% | 4.57 | 337 |
| AFAM | 19.34 | 21.93 | 13% | 12.50 | 176 |
| PRSC | 10.46 | 11.67 | 12% | 8.35 | 131 |
| NVMI | 6.56 | 7.26 | 11% | 5.11 | 162 |
| AMAT | 10.66 | 11.77 | 10% | 9.70 | 14,250 |
| cmtl | 26.23 | 28.37 | 8% | 25.60 | 693 |
| TSRA | 13.58 | 14.48 | 7% | 11.13 | 690 |
| UNTD | 4.72 | 4.98 | 6% | 3.63 | 445 |
| FRX | 33.31 | 34.68 | 4% | 28.47 | 9,098 |
| PETS | 9.48 | 9.80 | 3% | 8.51 | 211 |
| DLB | 33.50 | 33.97 | 1% | 25.70 | 3,583 |
| CPLA | 31.65 | 31.94 | 1% | 25.81 | 471 |
| CHKE | 13.45 | 13.32 | -1% | 10.15 | 122 |
| LTXC | 6.17 | 5.92 | -4% | 4.81 | 297 |
| KFY | 15.36 | 14.49 | -6% | 11.25 | 696 |
| VECO | 35.46 | 33.02 | -7% | 20.35 | 1,419 |
| LRCX | 37.30 | 34.62 | -7% | 33.24 | 4,496 |
| amed | 16.08 | 14.09 | -12% | 9.12 | 467 |
| MNTA | 16.35 | 13.93 | -15% | 10.15 | 832 |
| PWER | 7.71 | 6.10 | -21% | 3.51 | 751 |
| USMO | 14.06 | 11.00 | -22% | 10.71 | 332 |
| DELL | 14.69 | 11.26 | -23% | 11.16 | 26,061 |
| STRA | 88.52 | 66.46 | -25% | 66.10 | 1,089 |
| TNAV | 9.25 | 6.02 | -35% | 5.05 | 353 |
| MANT | 35.10 | 21.81 | -38% | 19.74 | 1,304 |
| APOL | 44.86 | 27.09 | -40% | 25.77 | 6,121 |
| GTAT | 11.39 | 6.34 | -44% | 3.92 | 1,382 |
| ESI | 70.91 | 31.41 | -56% | 31.25 | 1,894 |
| CECO | 16.48 | 3.47 | -79% | 3.05 | 1,197 |
If you took out the education stocks, it would be a more respectable show of +18%, but still a "loser". Here is a listing of every monthly portfolio I have tracked.
| 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 | -8.5% | 1.4% |
| 1/3/2011 | -11.4% | 0.1% |
| 1/28/2011 | -7.6% | 4.9% |
| 2/25/2011 | -5.5% | 5.0% |
| 3/24/2011 | -4.4% | 7.4% |
| 4/21/2011 | -16.0% | 3.2% |
| 5/27/2011 | -12.0% | -0.4% |
| 6/24/2011 | -9.5% | 5.0% |
| 7/29/2011 | -4.3% | 8.1% |
| 8/26/2011 | 12.0% | 21.6% |
| 9/30/2011 | 20.4% | 26.6% |
| 10/28/2011 | 2.0% | 10.9% |
| 11/25/2011 | 17.3% | 23.1% |
| 12/29/2011 | 8.7% | 12.7% |
| 1/27/2012 | -0.1% | 7.4% |
| 2/24/2012 | -1.5% | 3.2% |
| 3/23/2012 | -3.7% | 1.1% |
| 4/27/2012 | -0.8% | 0.6% |
| 5/25/2012 | 6.0% | 7.1% |
| 6/22/2012 | 6.0% | 6.0% |
| 7/27/2012 | 2.7% | 2.0% |
| Grand Total | 4.8% | 5.3% |
You will note the sad fact that this is the 20th straight portfolio to lose (that is hard to do... it ain't random) and the next ten portfolios are all losing as well.
Subsets
I also keep 2 subsets of the larger portfolios: (1) dividend stocks (those with a yield per Yahoo of at least 2.6%) and (2) new stocks (those new to the tracking portfolios in past 12 months. These two subsets also underperformed this month, both coming in around 17%. Finally, I like to track cash as it is more "honest" than percentages as if you go up by 25% and then down by 25%, that is a different result than up by 5% then down by 5%. So I track what you would have to day if you had spread $100,000 over the first twelve portfolios evenly.
| Category | Value |
| Total | 113,675 |
| Total New | 104,893 |
| Total Dividend | 237,386 |
| Total Russell 3K | 124,415 |
New Portfolio
Here are stocks in new portfolio that meet the dividend criteria. I have added CSCO as I know they just bumped their dividend and now yield about 3%:
| Stock | Initial Price | Yield |
| USMO | 11.00 | 8.0% |
| STRA | 66.46 | 6.0% |
| STX | 34.06 | 2.9% |
| RTN | 55.80 | 3.3% |
| PETS | 9.80 | 5.9% |
| PDLI | 7.30 | 8.2% |
| MSFT | 30.56 | 2.6% |
| MANT | 21.81 | 3.9% |
| JCOM | 28.13 | 3.7% |
| INTX | 11.58 | 6.9% |
| GNI | 74.37 | 20.2% |
| GME | 18.42 | 3.0% |
| DLX | 28.29 | 3.5% |
| HRB | 16.35 | 4.6% |
Then here are "new" stocks:
| Stock | Initial Price | Mkt Cap |
| UBNT | 10.57 | 827 |
| STX | 34.06 | 13,080 |
| NUS | 42.55 | 2,509 |
| MAXY | 6.14 | 166 |
| DMRC | 21.60 | 151 |
| CACI | 52.23 | 1,424 |
| BDSI | 4.82 | 140 |
Posts
2 comments:
Hi Marsh, Could you clarify what you mean with this sentence: "So I track what you would have to day if you had spread $100,000 over the first twelve portfolios evenly.", in other words: why you calculated only the first 12 portfolios? Secondly: do your statistics suggest that investing only on high-dividend MF stocks does beat the market?
Thanks
My comment means that if you started your investing with $100k spread over first 12 monthly tracking portfolios, then as each one hit the one year anniversary, you rolled the year ending amount into the tracking portfolio about to begin.
My stats show that since January 2006, investing in mfi stocks with at least a 2.6% yield have substantially outperformed the market. One could ague a 6 year period is not long enough to say that is an absolute.
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