Sh (aapl) led

Sh (aapl) led

Not in the dictionary, but means to lose a bunch of money on AAPL stock, while NFLX goes up 50% in two days.  Time will tell, but I am not one of those running around with his hair on fire.  Maybe I am drinking the Kool-Aid too much, but I still view Apple as one of the great American brands and a cash-generating machine.  To say they are worth $440 dollars when they have over $120 in cash at ST investments per share seems a bit off.  But as we all know, "the market goes nuts from time to time".  There are many who feel the market is efficient at pricing, but do not count me in that camp.  Yes, it is no longer a company that will grow at 30 to 40% a year, but frankly it was never priced that way.  I do not remember a 50x p/e ratio for AAPL, do you? Now, x-cash it is trading more cheaply than many utilities.

Anyway, the purpose of this is not to rant as I am actually not upset.  Maybe a little disappointed, but not upset.  I am a long term investor and Apple is not a broken company.  New products will still come out, cash will still be generating, Apple with buy back shares and increase the dividend and this Great World will continue to spin.  If there is another sell-off, I will buy more shares unless something has changed.  AAPL is 5.6% of my active investing portfolio, so prudent risk management says not to go overboard (I would certainly not double my investment).  I will have some additional cash to put to work, so I might consider increasing my stake 25 to 50% then.

Despite the apple pulping, my portfolio overall continues to truck along.  I have really been helped by GNW, which is my single largest holding and up 26% YTD. 

Dividend Portfolio

This where the bulk of my AAPL sits, so it did get dinged a bit.  I have two charts, first how I have done since starting this approach and a summary of all open positions:

Current Portfolio
Stock	Shares	Avg Cost	Current Price	Dividends Received	Pct Change	R3K Change	Diff
AAPL	150	527.94	439.88	-	-16.7%	6.2%	-22.8%
AOD	10,000	3.90	4.05	-	3.9%	0.7%	3.2%
BHK	2,259	12.78	15.83	2,861	33.8%	11.6%	22.2%
CIM	15,000	2.67	3.01	-	12.7%	2.8%	9.9%
CSCO	4,292	17.22	21.15	2,014	25.6%	13.1%	12.4%
CSQ	5,482	8.28	10.42	5,620	38.3%	28.9%	9.4%
FCX	1,110	32.20	34.87	344	9.3%	6.7%	2.6%
HFC	1,217	35.02	47.27	2,586	41.1%	9.3%	31.8%
INTC	1,974	20.99	20.96	1,998	4.7%	22.4%	-17.7%
JPM	1,684	35.29	47.16	1,494	36.1%	13.0%	23.1%
JQC	4,221	9.12	10.07	4,945	23.3%	12.5%	10.8%
KMF	1,871	22.11	32.14	4,454	56.1%	25.0%	31.1%
MPC	582	43.98	68.67	546	58.3%	10.6%	47.7%
O	558	19.41	43.48	7,463	192.8%	77.1%	115.8%
OIBAX	3,948	4.94	6.62	6,821	68.9%	77.1%	-8.2%
PGR	2,118	20.56	22.63	2,596	16.0%	11.2%	4.9%
PRE	536	67.43	85.49	1,286	30.3%	11.5%	18.9%
PVD	427	65.11	110.89	3,788	83.9%	25.3%	58.6%
SAI	4,727	12.83	12.13	1,938	-2.2%	6.8%	-9.1%
SLCA	2,062	14.34	19.76	1,000	41.2%	4.6%	36.6%
STO	1,040	23.82	26.44	1,121	15.5%	27.8%	-12.3%
VIVHY	2,296	16.70	21.29	3,749	37.3%	10.0%	27.3%
Total Open				56,624	26.1%	13.8%	12.3%
Closed					10.9%	9.5%	1.5%
Combined					15.3%	10.7%	4.6%
Annualized IRR Since 12/31/10					16.7%
2013 Gain					4.6%

So I am under-performing the R3000 by about 100 basis points. Second, here is how I have done since the start of 2013 and the past week (this is where you see the AAPLsauce):

Stock	Start	Last Week	Current	QTD Change	Weekly Change
AAPL	532.17	500.00	439.88	-17.3%	-12.0%
AOD	3.90	3.90	4.05	3.9%	3.9%
BHK	14.90	15.64	15.83	6.2%	1.2%
CIM	2.61	2.93	3.01	15.3%	2.7%
CSCO	19.65	21.02	21.15	7.6%	0.6%
CSQ	9.81	10.72	10.73	9.4%	0.1%
FCX	34.20	33.74	34.97	2.2%	3.6%
HFC	46.55	44.26	47.27	1.5%	6.8%
INTC	20.62	21.25	20.96	1.6%	-1.4%
JPM	43.97	46.76	47.46	7.9%	1.5%
JQC	9.65	10.10	10.14	5.0%	0.4%
KMF	28.79	31.41	32.14	11.6%	2.3%
MPC	63.00	65.20	68.67	9.0%	5.3%
O	40.21	44.04	43.48	8.1%	-1.3%
OIBAX	6.58	6.63	6.62	0.6%	-0.2%
PGR	21.10	23.00	22.91	8.6%	-0.4%
PRE	80.49	83.53	85.49	6.2%	2.3%
PVD	104.00	111.19	110.89	6.6%	-0.3%
SAI	11.32	12.09	12.25	8.2%	1.3%
SLCA	16.73	18.92	19.76	18.1%	4.5%
STO	25.04	25.79	26.44	5.6%	2.5%
VIVHY	22.81	23.20	22.29	-2.3%	-3.9%
Totals				4.9%	0.5%
IWV	84.68	88.29	89.41	5.6%	1.3%

The 4.9% doesn't quite foot to the 4.6% above.  I think there is a slight inconsistency in the way I am accounting for changes during the year in holdings (like I bought AOD and CIM during 2013).

MFI Tranches

While my dividend portfolio is slightly underperforming so far this year (though still solid), MFI approach continues to lag (at least for me).  There is actually an active debate on MFI Yahoo board on whether MFI (as first presented by Greenblatt) is dead.  It certainly feels that way.

August 15 Tranche
Stock	Start	Current	Dividend	Pct Gain	R3K Gain
DLB	$34.43	$31.32	$4.00	2.6%	9.0%
KFY	$13.98	$16.31	$0.00	16.7%	9.0%
MSFT	$30.19	$27.88	$0.23	-6.9%	9.0%
NSU	$3.62	$4.00	$0.05	12.0%	9.0%
UIS	$19.96	$18.97	$0.00	-5.0%	9.0%
Totals				3.9%	9.0%
November 15 Tranche
Stock	Start	Current	Dividend	Pct Gain	R3K Gain
AAPL	$537.62	$439.88	$0.00	-18.2%	12.4%
ABC	$40.21	$45.03	$0.00	12.0%	12.4%
LPS	$23.89	$22.87	$0.10	-3.9%	12.4%
VIAB	$49.12	$59.02	$0.28	20.7%	12.4%
WU	$12.77	$13.53	$0.13	6.9%	12.4%
Totals				3.5%	12.4%

I think we can all agree that under-performing by 5 and 8 points for these two tranches is pretty stinky.  I have been planning on adding a third tranche in February, but am honestly having second thoughts.

Discretionary

Finally, I have my discretionary portfolio, which just has a few open positions.  I have traded in and out of SD a couple times in 2013 and done quite well besides what you see here:

Row Labels	Sum of Cost	Sum of Value	Sum of Gain
GNW	87,710	113,400	25,690
glre	62,410	56,975	-5,435
GTAT	42,300	39,240	-3,060
Grand Total	192,420	209,615	17,195

So all-in during 2013 I am up 5.2%.  If Apple had been flat (instead of round, ha-ha) that would have added 120 basis points.

I do not know where the market goes from here, but I do know I am glad I sold my short etf (SDS) on December 30th.

Transactions

I should briefly mention the two transactions I made during the week.  I am pretty sure I mentioned I sold my FSC last week due to concerns about sustainability of dividend.  Ironically, this week I bought AOD because of the lack of sustainability of their dividend.  They had been paying a double digit dividend (around 14%) and they announced it was being slashed to 6.9%.  They had changed fund management in December and they were changing strategies, moving more to securities looking for capital appreciation.

This is a closed end fund and before that news was announced it was selling at about an 8% discount to NAV.  That day, everyone panicked and it sold off another 8%, which gave me a 16% discount. I jumped in with both feet at $3.896 a share, which is an effective yield of about 8.3%.  I am glad they have changed management and approach as the old approach was not so hot.  The stock has already gone up about 4% for, so hopefully it will be another CEF success story.

Finally, I did buy in my "Ed's Talking Stock" portfolio, shares in VECO this week based on great earnings by CREE.  I have another 6 trading days to wait to see what VECO reports, but the two often are in tandem and CREE jumped 20% on their report.  I was early to the dance as that move is down 1.5% thus far.

Tomorrow I will try and publish more on MFI, so stay tuned!