One of the great analogies in The Little Book That Beats the Market
is Greenblatt comparing investors (like you and me) picking individual stocks with a man running through a dynamite factory with a lit match. Of course none of us believe we are doing that, but it is easy to get a little carried away. I clearly did that with PXLW a month ago (it is down another 20% since I bailed - recall I took a 20% haircut).
The point I am trying to make is that there is a fine line between investing and speculating. And when you are speculating (as I did with PXLW), there is a decent probability of getting your eyebrows singed. I think it is fair to say that is what has happened with LMNS for me currently. I had had great success fishing in the post IPO market with 5 or 6 stocks and decided to fish again with LMNS. But I also took the largest stake I have made in a post IPO stock. So far it has worked out poorly. Down 15%. I will continue to hold, but I am more "hoping" right now than a man with a plan. I think the issue underlying the drop is that analysts typically by now have come out with positive reports on the IPO company that serve as a catalyst. That has not happened here, yet. As LMNS is an Israeli company, that process can take longer. So I wait (and hope).
MFI Portfolio
Ok, enough self-flagellation. While it was a bad week (I was down 2.8%); I am still doing very well on the year overall. My stocks are up 6.3% so far this year while the R3K is up 1%. One reason for the smiley face on the year thus far is my MFI portfolio. It is up about 3%, not a blow-out, but solid nonetheless. For the week, RDA, CF and AVG were the big winners, up 1.5% to 2.2%. WNR was a big loser, down 5.5%.
All my tranches continue to lead the benchmark. And in total, I am beating the benchmark by a very solid 30 percentage points. Many fund managers would kill for that!
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| $11.40 | $12.31 | $0.00 | 8.0% | 17.9% | |
| CYOU | $29.24 | $28.98 | $0.00 | -0.9% | 17.9% |
| $9.74 | $18.19 | $0.10 | 87.9% | 17.9% | |
| $13.85 | $17.90 | $0.32 | 31.6% | 17.9% | |
| CF | $183.97 | $257.79 | $2.80 | 41.6% | 17.9% |
| Totals | 33.6% | 17.9% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| CF | $187.26 | $257.79 | $2.00 | 38.7% | 13.5% |
| $66.06 | $76.41 | $0.53 | 16.5% | 13.5% | |
| AGX | $15.60 | $29.22 | $0.75 | 92.1% | 13.5% |
| $11.29 | $12.31 | $0.00 | 9.0% | 13.5% | |
| RPXC | $15.92 | $16.16 | $0.00 | 1.5% | 13.5% |
| Totals | 31.6% | 13.5% | |||
| 11/15/13 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| AVG | $17.22 | $20.79 | $0.00 | 20.7% | 4.3% |
| $17.71 | $20.45 | $0.00 | 15.5% | 4.3% | |
| GA | $9.04 | $11.58 | $0.23 | 30.7% | 4.3% |
| RPXC | $17.04 | $16.16 | $0.00 | -5.2% | 4.3% |
| $48.01 | $58.20 | $0.00 | 21.2% | 4.3% | |
| Totals | 16.6% | 4.3% | |||
| 2/1/14 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| $17.13 | $20.45 | $0.00 | 19.4% | 4.3% | |
| $61.47 | $68.75 | $0.45 | 12.6% | 4.3% | |
| RPXC | $16.22 | $16.16 | $0.00 | -0.4% | 4.3% |
| $69.55 | $80.61 | $0.00 | 15.9% | 4.3% | |
| WNR | $39.11 | $38.65 | $0.26 | -0.5% | 4.3% |
| Totals | 9.4% | 4.3% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 31.6% | 16.6% | 9.4% | 33.6% | 23.1% |
| Previous Tranche | 14.1% | 43.7% | 78.3% | 0.0% | 31.3% |
| MFI Overall Gain | 50.1% | 67.6% | 95.0% | 33.6% | 61.6% |
| Current Balance | 37,517 | 41,898 | 48,750 | 33,409 | 161,573 |
| R3K Current Tranche | 13.5% | 42.6% | 4.3% | 17.9% | 19.6% |
| R3K Overall Gain | 38.6% | 42.6% | 26.4% | 17.9% | 31.4% |
| R3K Balance | 34,657 | 35,642 | 31,588 | 29,467 | 131,354 |
| Annualized IRR | 28.5% | 45.9% | 78.4% | 38.2% | 51.2% |
Discretionary Portfolio
While this has been my best portfolio, it has also been my most volatile. This was all-in-all a bad week as GTAT, GNW, LMNS, C and CALL all tumbled. I decided to use the week as a chance to harvest some capital losses for tax purposes and adjust my positions to stocks where I felt the drops were unjustified.
The one drop that was clearly justified was C. They have just been a mess. They first had the fiasco in Mexico (Banamex Fraud Exposes Challenges for Citi in Mexico) and now this week their capital plan was dis-allowed by the fed (Fed Rejects Citigroup's Capital Plan in Stress Test). Those items are both so embarrassing. You should not fail a capital plan. Just like when you ask a woman to marry you, you should know the answer, when you submit a capital plan, you should know the answer. So I have sold my C. I took about an 8% hit. I may buy back in, when it appears they have their sh!t together, but I expect I will have plenty of time. I then added to my GTAT position (at $17.22) and CALL (at $20.20).
| Stock | Shares | Avg Cost | Current Price | A | Pct Change | R3K Change | Diff |
| BAC-WTA | 6,000 | 5.35 | 8.15 | - | 52.3% | 18.0% | 34.3% |
| CALL | 4,000 | 22.20 | 20.29 | - | -8.6% | -0.7% | -7.9% |
| CS | 2,800 | 29.47 | 31.73 | - | 7.7% | 2.7% | 4.9% |
| GNW | 9,000 | 7.10 | 17.22 | - | 142.4% | 38.7% | 103.7% |
| GTAT | 14,000 | 3.39 | 17.17 | - | 406.5% | 19.1% | 387.4% |
| HIG-WT | 1,650 | 21.24 | 26.10 | - | 22.9% | 13.4% | 9.5% |
| IWM | 126 | 119.28 | 114.29 | - | -4.2% | -1.8% | -2.4% |
| 7,000 | 11.48 | 12.31 | - | 7.3% | 9.1% | -1.8% | |
| LMNS | 20,000 | 12.57 | 10.68 | - | -15.1% | -1.2% | -13.8% |
| RIOM | 25,000 | 2.25 | 2.04 | - | -9.4% | -0.2% | -9.2% |
| Total Open | - | 35.8% | 6.6% | 29.2% | |||
| Closed | 3.8% | 2.1% | 1.7% | ||||
| Combined | 12.3% | 3.3% | 9.0% | ||||
In the table, you can see the LMNS flameout. C is now gone and CALL position is doubled. I have not yet put the GTAT in, it was a 3,000 share add with my multiplier. I may use those shares to support a Covered Call strategy that people on Ed's Talking Stock are performing extremely successfully.
Dividend Portfolio
This portfolio was actually up a bit on the week. Hooray!
| Stock | Shares | Avg Cost | Current Price | Dividends Received | Pct Change | R3K Change | Diff |
| AOD | 13,818 | 8.02 | 8.34 | 6,965.50 | 10.3% | 15.5% | -5.2% |
| BBEP | 5,713 | 16.74 | 20.03 | 5,900.95 | 25.8% | 8.9% | 16.9% |
| CSQ | 6,804 | 8.63 | 11.05 | 11,467.60 | 47.5% | 49.2% | -1.7% |
| CTCM | 10,000 | 8.98 | 8.87 | - | -1.3% | -1.1% | -0.1% |
| FGL | 3,000 | 20.06 | 22.34 | 195.00 | 11.7% | 0.7% | 11.0% |
| FSC | 6,646 | 9.65 | 9.49 | 553.61 | -0.8% | 0.2% | -1.0% |
| NTC | 6,629 | 12.00 | 12.20 | 755.71 | 2.6% | 0.5% | 2.0% |
| O | 590 | 20.64 | 40.75 | 8,917.32 | 170.6% | 108.1% | 62.5% |
| 4,116 | 4.99 | 6.09 | 7,944.17 | 60.6% | 115.0% | -54.4% | |
| PM | 1,000 | 78.60 | 81.02 | 940.00 | 4.3% | -0.1% | 4.4% |
| TGONF | 7,000 | 10.27 | 10.27 | 2,367.50 | 3.3% | 13.3% | -10.1% |
| TPVG | 5,000 | 15.55 | 16.09 | - | 3.5% | -1.9% | 5.4% |
| Total Open | 46,007 | 13.8% | 12.1% | 1.7% | |||
| Closed | 12.6% | 11.5% | 1.2% | ||||
| Combined | 12.8% | 11.6% | 1.3% | ||||
| Annualized IRR Since 12/31/10 | 16.8% | ||||||
| 2014 Gain | -0.4% | ||||||
I think that is the end (for now). Come back later, we do have a tracking portfolio hitting a year this weekend. With that, I will end it with a song appropriate for Citigroup's problems:
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