12/31/2012 Monthly Tracking Portfolio

December 31st 2012 Monthly Tracking Portfolio

Another month has zipped by. As my faithful readers know, I have been tracking the Magic Formula Stocks as described by Joel Greenblatt 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 Russell 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.

 Fearless readers will recall we had a 29 month "losing streak"..  This month-end extended the winning streak to 7! It went up an excellent 52.3 %,stomping the R3K, which was up a less excellent 33.3%! Here are the 50 stocks in descending performance order (just a stunning list of successes this month):

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
NUS	36.38	138.22	279.9%	36.85	2,179
GTAT	3.03	8.72	187.6%	2.61	360
SAVE	17.73	45.41	156.1%	17.40	1,286
HLF	32.17	78.70	144.6%	30.84	3,554
CPLA	28.08	66.44	136.6%	26.96	361
PBI	10.03	23.30	132.3%	10.71	2,136
USNA	32.93	75.58	129.5%	32.03	477
QCOR	26.23	54.45	107.6%	24.75	1,562
GME	24.34	49.26	102.4%	22.30	3,033
POZN	5.01	9.79	95.4%	4.26	152
UIS	17.30	33.57	94.0%	15.68	759
ESI	17.31	33.58	94.0%	11.69	404
WCRX	11.89	22.93	92.9%	10.85	3,016
STX	29.59	56.16	89.8%	30.26	11,741
RPXC	9.04	16.90	86.9%	9.10	475
JCOM	29.91	50.01	67.2%	30.49	1,379
DLX	31.47	52.19	65.8%	32.32	1,641
RTN	56.15	90.70	61.5%	52.24	18,995
SAI	10.28	16.35	59.0%	N/A	3,871
AGX	17.37	27.56	58.7%	13.90	251
CA	21.22	33.65	58.6%	22.25	9,977
PETS	10.61	16.63	56.7%	11.01	222
LPS	24.30	37.38	53.8%	21.23	2,085
BAH	12.88	19.15	48.7%	12.51	1,888
MSFT	25.93	37.41	44.3%	26.28	224,949
VG	2.37	3.33	40.5%	2.30	528
DELL	9.97	13.86	39.0%	8.69	17,583
VCI	24.69	34.25	38.7%	23.69	1,009
NATR	13.02	17.32	33.0%	13.30	228
DLB	29.33	38.56	31.5%	29.29	3,024
APOL	20.92	27.32	30.6%	15.98	2,348
PDLI	6.54	8.44	29.1%	6.50	1,335
USMO	11.26	14.28	26.8%	11.10	254
MANT	25.14	29.93	19.1%	23.20	960
CSCO	19.22	22.43	16.7%	19.98	104,358
GNI	58.55	68.10	16.3%	61.50	101
CF	201.02	233.04	15.9%	169.33	12,772
HFC	43.60	49.69	14.0%	38.98	9,475
TZOO	18.99	21.32	12.3%	18.60	300
KLIC	11.99	13.30	10.9%	10.08	889
NTI	22.27	24.60	10.5%	17.83	468
DMRC	20.30	19.26	-5.1%	17.85	148
INTX	8.72	7.79	-10.7%	7.15	171
TNAV	7.99	6.59	-17.5%	4.91	329
NSU	4.08	3.32	-18.6%	2.65	851
EGY	8.65	6.89	-20.3%	5.03	500
IDCC	40.78	29.49	-27.7%	28.53	1,682
SVLC	2.52	1.68	-33.3%	1.13	226
STRA	56.17	34.47	-38.6%	33.64	667
POOSF	1.42	-	-100.0%	-	114

This is the first tracking portfolio in decades (ok maybe not that long) where the For profit Education Stocks were NOT a drag.  The 4 of them were up on average by a whopping 71%. And there were six stocks up 100% or more (including GTAT).  I do think things are continuing to change.  You can see that in the next table!

Here is a listing of every portfolio I have tracked:

Average of Percent Change
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	23.5%	29.6%
10/28/2011	0.4%	11.5%
11/25/2011	13.9%	24.0%
12/29/2011	9.9%	15.9%
1/27/2012	7.4%	16.6%
2/24/2012	7.8%	13.3%
3/23/2012	9.1%	15.2%
4/27/2012	10.5%	15.3%
5/25/2012	26.5%	27.5%
6/22/2012	26.1%	24.6%
7/27/2012	30.4%	25.7%
8/24/2012	26.0%	19.8%
9/28/2012	39.3%	22.1%
10/26/2012	48.3%	28.9%
11/23/2012	45.7%	32.1%
12/31/2012	52.3%	33.0%
1/25/2013	43.8%	26.0%
2/22/2013	41.7%	24.6%
3/28/2013	38.0%	20.0%
4/26/2013	29.9%	19.3%
5/24/2013	22.6%	14.3%
6/28/2013	22.8%	16.3%
7/29/2013	15.0%	11.0%
8/30/2013	13.5%	14.1%
9/27/2013	9.9%	9.5%
10/25/2013	4.3%	5.1%
11/29/2013	1.3%	2.8%

As noted, this is the seventh straight portfolio to win after 29 straight losses! (that is hard to do... it ain't random).  However 8 of the 11 open portfolios are leading the Russell 3000 (down from all 11 last month).

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.  The dividend portfolio was most excellent, up about 37.5%.  The new portfolio was solid okay, up 35.9%.  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	170,342
Total New	173,705
Total Dividend	389,604
Total Russell 3K	171,157

I am sure my eagle eyed readers have noted that the "Total" is now losing to the Russell 3000 total.  It has been a real back and forth of late.