Sold LNC

I sold my Lincoln National from my dividend portfolio yesterday.  The rationale was that I was bothered by the likelihood of further qe by the Fed. Life insurance companies really get screwed by the artificial depression of interest rates.  LNC had gone up 24% since the end of July and I decided it was time to walk away with what was essentially a flat stock. They were also my lowest yielding stock in my dividend portfolio.  I still like the company and the space, but I suspect Lincoln will see  the teens before they see the 30s. So stay tuned.

On the MFI front, after an initial surge, my portfolio of five stocks is up 4.1%, better than the 0.7% benchmark. The broader mfi picture has fallen back a bit. I wrote last week in shift winds that perhaps mfi had turned a corner as the three most recent tracking portfolios were beating the Russell 3000.  Now just the July portfolio is winning and June and may have fallen back. It does appear to be an uphill battle.

Clearly certain sectors that are targeted within mfi have taken a beating, such as for profit education stocks, which seem to drop lower by the day. I have to believe at some point there is a bottom, but I do not know where it is.

Hewlett Packard reported their earnings. They were poor, this is another area of mfi that has really struggled as dell has been on the list forever.  I was fortunate and sold my hp at 27 this spring, before the sell off (they are around eighteen now). They are in the middle of two titans, I saw whe Jim Chanos is shorting them and Seth Klarman has them long. I have great respect for the Baupost group, but I will never ever again pick a stock where I know that Chanos is short. He may be the smartest guy out there.