1/25/2013 Monthly Tracking Portfolio

January 25th 2013 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 8! It went up an excellent 39.5 %,stomping the R3K, which was up a less excellent 22.0%! 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
GTAT	3.27	10.27	214.1%	2.61	391
QCOR	25.34	67.01	164.4%	25.86	1,491
SAVE	19.75	46.90	137.5%	18.51	1,434
CPLA	28.07	62.39	122.3%	27.17	367
PBI	11.46	25.18	119.7%	12.85	2,439
NUS	44.27	85.15	92.3%	37.93	2,614
VG	2.47	4.61	86.6%	2.41	555
ESI	16.16	29.40	81.9%	11.95	393
UIS	18.97	34.27	80.7%	15.68	796
POZN	4.42	7.84	77.4%	4.26	163
RTN	54.51	95.07	74.4%	52.50	18,545
STRZA	16.21	27.98	72.6%	16.02	2,048
WCRX	13.55	22.93	69.2%	10.85	3,369
LPS	22.57	37.30	65.3%	21.23	1,908
USNA	37.33	59.87	60.4%	33.34	548
APOL	20.70	32.29	56.0%	15.98	2,314
RPXC	10.42	16.22	55.7%	10.11	517
AFAM	19.67	30.41	54.6%	17.66	184
GME	23.00	35.07	52.5%	23.36	2,838
AGX	18.65	28.41	52.3%	13.90	270
HLF	42.57	64.37	51.2%	30.84	4,667
SAI	11.12	16.62	49.5%	N/A	4,145
JCOM	30.99	45.35	46.3%	30.49	1,431
PDLI	6.23	9.10	46.1%	6.74	1,275
STX	36.23	52.86	45.9%	30.26	14,230
MSFT	27.06	37.84	39.8%	27.10	231,374
BAH	13.65	18.28	33.9%	12.51	1,980
DLB	31.32	40.99	30.9%	30.78	3,226
USMO	10.97	14.26	30.0%	11.10	250
CACI	57.27	74.02	29.2%	49.98	1,323
VCI	26.97	34.00	26.1%	23.69	1,100
NATR	13.00	16.27	25.2%	13.30	226
AAPL	429.10	500.60	16.7%	385.10	423,007
NTI	21.23	24.70	16.3%	17.83	443
MANT	25.33	29.10	14.9%	23.20	981
GTIV	10.25	11.36	10.8%	8.47	314
DELL	12.93	13.86	7.2%	8.69	22,542
CSCO	20.53	21.91	6.7%	19.98	111,637
HFC	44.27	46.30	4.6%	38.98	9,528
CF	227.85	230.86	1.3%	169.33	14,238
NSU	3.82	3.66	-4.2%	2.65	845
KLIC	12.59	11.64	-7.5%	10.08	928
TNAV	7.82	6.50	-16.9%	4.91	323
INTX	9.53	7.40	-22.4%	7.15	188
SVLC	2.53	1.85	-26.9%	1.13	228
EGY	8.81	6.02	-31.7%	5.03	510
IDCC	44.21	28.75	-35.0%	27.61	1,827
STRA	55.28	34.96	-36.8%	33.64	664
GNI	64.99	21.82	-66.4%	21.38	112
POOSF	1.26	-	-100.0%	-	100

Hey check out who was #1!!!! That was even higher than my initial purchase price ($2.73). For profit Education Stocks were again NOT a drag.  The 4 of them were up on average by a whopping 56%. 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	39.5%	22.0%
2/22/2013	39.5%	20.7%
3/28/2013	34.6%	16.1%
4/26/2013	28.2%	15.5%
5/24/2013	18.8%	10.6%
6/28/2013	19.8%	12.6%
7/29/2013	12.2%	7.5%
8/30/2013	9.8%	10.5%
9/27/2013	6.7%	6.0%
10/25/2013	0.1%	1.8%
11/29/2013	-3.0%	-0.5%
12/31/2013	-3.7%	-3.2%

As noted, this is the eighthstraight portfolio to win after 29 straight losses! (that is hard to do... it ain't random).  However 7 of the 11 open portfolios are leading the Russell 3000 (down from 8 last month and all 11 2 months ago).

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 36.1%.  The new portfolio was solid okay, up 44.6%.  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	165,441
Total New	166,738
Total Dividend	369,989
Total Russell 3K	165,682

You will note that it is an absolute dead heat between all the MFI (165,441) and Russell 3K (165,682).