August 15th 2013 MFI Portfolio

My first of my re-booted MFI Portfolios made it to the one year date Thursday.  As proscribed I sold NSU (it was my one loser) a day early to harvest the tax loss (short term). I sold the other 4 positions Friday.  I then bought 5 new stocks Thursday.

8/15/12 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
DLB	$34.43	$33.04	$4.00	7.6%	22.1%
KFY	$13.98	$18.95	$0.00	35.6%	22.1%
MSFT	$30.19	$31.92	$0.92	8.8%	22.1%
NSU	$3.62	$3.33	$0.12	-4.6%	22.1%
UIS	$19.96	$24.52	$0.00	22.8%	22.1%
Totals				14.1%	22.1%

Looking at the 5 positions, you can see NSU really hurt me. It was a funny stock.  It was actually pushing $5 in 2012 and was my initial best performer. But in 2013, anything associated with precious metals got hit pretty hard. I was really tempted to keep NSU in the new tranche.  But I decided not to in the end. I do still have 10,000 shares (with my multiplier) in dividend portfolio.

DLB struggled the entire year.  I should have sold them a day early as well, but they were so flat it doesn't really matter.  They did pay a special $4 dividend that at least made them respectable.  I had no interest in retaining.

KFY was my best pick.  I did think that employment was going to start rebounding and KFY was a decent way to play that. They were off the list, so no longer an option.

MSFT was a bit disappointing. They were around $34 just a month or so ago, but gave back 10% post earnings.  I thought about renewing them as well.

UIS was the roller coaster ride. They were down over 20% in November and April and they ended up over 20%.  The graph is pretty exciting.  They just have a lot of volatility around earnings.  I was glad to get to sell and make a nice return (though in reality it was just average). I did not want to renew, but if I see them on another downswing into the teens for another tranche, I may re-buy.


8/15/13 Portfolio

Here are my 5 new stocks.  I will say a brief word about each stock:

8/15/2013	Start	Current	Dividend	Pct Gain	R3K Gain
CF	$187.26	$187.84	-	0.3%	-0.3%
FLR	$66.06	$66.19	-	0.2%	-0.3%
AGX	$15.60	$15.39	-	-1.3%	-0.3%
KLIC	$11.29	$11.39	-	0.9%	-0.3%
RPXC	$15.92	$15.70	-	-1.4%	-0.3%
Totals				-0.3%	-0.3%

CF is also in my May tranche. I do think the fertilizer space is cheap and CF, with its good access to cheap natural gas has a competitive advantage.  I am not sure how the crash in potash prices will impact CF.  I was encouraged than Dan Loeb has bought a large position in CF.

FLR is the first of my construction plays.  I do believe that the US economy will start accelerating in next 12 months and one beneficiary will be construction.  With the natural gas revolution, I do think new power plants will be built and new infrastructure to liquefy it.

AGX is a much smaller play on the same theme.  They were my last choice (sorry guys).  I will say I really really had trouble picking five stocks this tranche.

KLIC is becoming one of my largest holdings with this addition.  I view them as safe given their huge cash position.  they are profitable and in a bit of a downturn, but in a year things should pick up. There is also potential catalyst of dividend or share repurchases given all their cash.

RPXC is basically a toll company with a patent portfolio. They seem very good at it.

I Could Have Been A Contender

While it is hard to be displeased with a 14% gain, I did trail the index. I also missed on some humongous opportunities. UBNT was up 180%, GME was up 165%, NUS was up 110%, it would have been sweet to have had a huge winner.  But that is what MFI is, it has greater variance amongst stocks that is normal in the stock market as many of the stocks have a few warts.  That is why you buy stocks in 4 tranches and try to own numerous securities.

Overall, my MFI re-boot has been a spectacular success thus far.  I am up over 25% and beating the index by about a ten point spread.  That is fabulous:

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	-0.3%	36.2%	47.8%	6.2%	21.7%
Percent Gain	13.5%	36.2%	47.8%	6.2%	25.9%
Current Balance	28,375	34,043	36,948	26,551	125,918
R3K Gain	21.3%	25.5%	11.1%	3.6%	15.6%
R3K Balance	30,537	31,363	27,767	25,907	115,575
Annualized IRR					43.4%

You can see I have amended my table slightly to reflect the new August tranche.   So while it started at $25,000 and is now $28,375, you will be able to see how much of gain/loss is from current tranche and how much is from prior portfolios.

Here are all my open MFI positions (February was a great month of picks!):

11/15/12 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
AAPL	$537.62	$502.33	$8.75	-4.9%	25.5%
ABC	$40.21	$56.53	$0.63	42.2%	25.5%
LPS	$23.89	$32.25	$0.30	36.2%	25.5%
VIAB	$49.12	$78.51	$0.83	61.5%	25.5%
WU	$12.77	$18.25	$0.38	45.8%	25.5%
Totals				36.2%	25.5%
2/1/13 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
AAPL	$450.60	$502.33	$8.75	13.4%	11.1%
GA	$6.10	$8.09	$0.42	39.5%	11.1%
STRZA	$16.06	$24.57	$0.00	53.0%	11.1%
CA	$25.07	$30.55	$0.50	23.8%	11.1%
NUS	$41.94	$87.13	$0.60	109.2%	11.1%
Totals				47.8%	11.1%
5/6/2013	Start	Current	Dividend	Pct Gain	R3K Gain
KLIC	$11.40	$11.39	$0.00	-0.1%	3.6%
CYOU	$29.24	$29.76	$0.00	1.8%	3.6%
RDA	$9.74	$11.35	$0.00	16.6%	3.6%
NVDA	$13.85	$15.19	$0.08	10.2%	3.6%
CF	$183.97	$187.84	$0.80	2.5%	3.6%
Totals				6.2%	3.6%
8/15/2013	Start	Current	Dividend	Pct Gain	R3K Gain
CF	$187.26	$187.84	-	0.3%	-0.3%
FLR	$66.06	$66.19	-	0.2%	-0.3%
AGX	$15.60	$15.39	-	-1.3%	-0.3%
KLIC	$11.29	$11.39	-	0.9%	-0.3%
RPXC	$15.92	$15.70	-	-1.4%	-0.3%
Totals				-0.3%	-0.3%

I will write more later this weekend on my portfolio in total.  It has really done well the past month.