Saturday, September 20, 2014

Weekend Update 9/20/14

Weekend Update

As I mentioned yesterday, my portfolio is in a serious tailspin.  Three straight bad weeks have taken me from beating the benchmark to trailing it.  Not the end of the world, I am still up decently in this year. But I'd rather do better than worse.

I did sell a lot in the week, so if the markets drop and if I drop proportional to the markets, I will actually gain ground due to large cash component.  Of course if the markets go up, I am handicapped by being heavy in cash.

New Strategy

I will start implementing my new strategy of four new MFI tranches, corresponding with the start of the four quarters (So Oct 1st will be #1).  The picks will be formula-driven:


  • take MFI screen $100m and above
  • Only use stocks $700m and greater market cap
  • Identify those stocks with 2.5% yield or higher
  • I can throw away one stock as "untouchable"
  • Then pick random 5 stocks from that list.
  • If the list has fewer than five stocks, take the next highest yielding stock.
Example

Current stocks on screen > $700 million:


Ticker Mkt Cap Price Yield
CSCO 127,487.10         25.16 2.9%
VIAB 34,139.18         79.52 1.6%
RTN 31,842.48      100.77 2.3%
NOC 27,696.91      129.99 2.0%
CA 12,670.11         28.50 3.5%
GIB 11,089.20         36.59 0.0%
COH 10,116.43         36.96 3.6%
HRB 8,871.59         32.45 2.5%
GME 4,989.14         43.61 2.9%
BRCD 4,560.28         10.26 0.7%
KING 4,367.46         13.19 0.0%
BAH 3,720.94         22.58 14.2%
MYGN 3,080.29         36.53 0.0%
APOL 3,000.12         27.27 0.0%
DLX 2,891.99         58.04 1.9%
NUS 2,614.54         41.50 3.0%
TTWO 2,387.26         23.53 0.0%
BKE 2,322.06         47.92 4.3%
NSR 1,591.01         26.75 0.0%
WTW 1,385.61         23.09 0.7%
PDLI 1,368.96           9.57 7.6%
IILG 1,193.75         20.49 2.1%
UIS 1,164.61         23.51 0.0%
USNA 979.70         71.20 0.0%
RGR 950.41         51.24 4.2%
PENN 917.58         11.55 0.0%
DEPO 874.20         14.57 0.0%
EXLS 850.43         26.13 0.0%
RPXC 829.45         14.74 0.0%

Now only select those with 2.5% yield or better:

Ticker Mkt Cap Price Yield
BAH 3,720.94         22.58 14.2%
PDLI 1,368.96           9.57 7.6%
BKE 2,322.06         47.92 4.3%
RGR 950.41         51.24 4.2%
COH 10,116.43         36.96 3.6%
CA 12,670.11         28.50 3.5%
NUS 2,614.54         41.50 3.0%
GME 4,989.14         43.61 2.9%
CSCO 127,487.10         25.16 2.9%
HRB 8,871.59         32.45 2.5%

Note these yields are per Yahoo Finance, not always most reliable source. BAH has a regular yield around 2%, but has often also paid special dividends. I would include them.  BKE is very similar, 1.9% yield but with common special dividends. So I would include this whole list. I would throw out PDLI in this case.  Then pick 5 randomly from remaining 9.

Weekly Graph

Warning the image you are about to see contains graphic images.



MFI Portfolio

This portfolio has held up the best through my recent blood bath.  probably another good reason to allocate more resources this direction:

11/15/13 Stocks Start Current Dividend Pct Gain R3K Gain
AVG $17.22 $17.23 $0.00 0.1% 12.7%
ATVI $17.71 $21.82 $0.20 24.3% 12.7%
GA $9.04 $11.90 $0.23 34.2% 12.7%
RPXC $17.04 $14.52 $0.00 -14.8% 12.7%
SYNA $48.01 $78.66 $0.00 63.8% 12.7%
Totals 21.5% 12.7%
2/1/14 Stocks Start Current Dividend Pct Gain R3K Gain
ATVI $17.13 $21.82 $0.20 28.5% 12.7%
KLAC $61.47 $80.77 $1.40 33.7% 12.7%
RPXC $16.22 $14.52 $0.00 -10.5% 12.7%
SNDK $69.55 $101.12 $0.53 46.1% 12.7%
WNR $39.11 $43.79 $0.78 14.0% 12.7%
Totals 22.4% 12.7%
5/6/2014 Start Current Dividend Pct Gain R3K Gain
AVG $19.57 $17.23 $0.00 -12.0% 7.3%
CA $29.54 $28.48 $0.50 -1.9% 7.3%
CSCO $22.79 $25.20 $0.19 11.4% 7.3%
NSR $25.82 $25.59 $0.00 -0.9% 7.3%
RCII $28.78 $29.23 $0.23 2.4% 7.3%
Totals -0.2% 7.3%
8/15/2014 Start Current Dividend Pct Gain R3K Gain
CSCO $24.40 $25.20 $0.00 3.3% 2.7%
AGX $36.71 $35.57 $0.00 -3.1% 2.7%
ITRN $21.32 $21.20 $0.19 0.3% 2.7%
BRCD $9.34 $10.30 $0.00 10.3% 2.7%
CBI $58.25 $61.23 $0.00 5.1% 2.7%
Totals 3.2% 2.7%
Category/Tranche August November February May Total
Initial Investment      25,000       25,000     25,000      25,000    100,000
Current Tranche 3.2% 21.5% 22.4% -0.2% 11.9%
Previous Tranche 41.4% 43.7% 78.3% 33.0% 49.4%
Tranche -2 14.1%              -              -               -   3.5%
MFI Overall Gain 66.4% 74.7% 118.1% 32.8% 73.0%
Current Balance      41,612       43,675     54,532      33,191    173,010
R3K Current Tranche 19.4% 12.7% 12.7% 7.3% 13.0%
R3K Overall Gain 49.8% 54.0% 36.6% 27.5% 42.0%
R3K Balance      37,447       38,505     34,138      31,879    141,970
Annualized IRR 27.5% 35.3% 61.3% 22.9% 37.7%

So beating the benchmark by 31%. But you can see that lead has recently been shrinking:


Date Differential Value
12/1/2012 -2.20%       99,765
1/1/2013 -1.78%      102,798
2/1/2013 -2.26%      102,594
3/1/2013 -2.23%      102,881
4/1/2013 -0.43%      106,804
5/1/2013 2.00%      110,423
6/1/2013 4.75%      115,831
7/1/2013 4.29%      114,888
8/1/2013 6.91%      124,799
9/1/2013 10.46%      124,536
10/1/2013 19.67%      138,655
11/1/2013 19.75%      143,514
12/1/2013 23.70%      150,105
1/1/2014 26.63%      157,138
2/1/2014 24.70%      150,619
3/1/2014 25.66%      158,116
4/1/2014 30.38%      162,991
5/1/2014 29.65%      162,428
6/1/2014 31.44%      167,001
7/1/2014 39.23%      177,971
8/1/2014 31.13%      167,054
9/1/2014 35.90%      177,792
Current 31.04%      173,010

I was up 39% on July 1st.

Dividend Portfolio

A lot of turnover here.

Stock Shares Avg Cost Current Price Dividends Received Pct Change R3K Change Diff
AOD        14,186         8.03          8.80               12,519.36 20.5% 23.8% -3.2%
CSQ          7,050         8.74        12.07               14,847.48 62.2% 58.0% 4.3%
EXETF          6,000         7.82          7.69                              -   -1.7% -0.1% -1.6%
NADL          8,366         9.34          6.93                 2,727.85 -22.3% 3.8% -26.2%
NTC          6,784       12.02        12.38                 3,058.21 6.8% 8.1% -1.4%
O              603       21.12        42.12                 9,570.23 174.6% 118.9% 55.8%
OIBAX          4,147         5.00          6.06                 8,261.12 61.0% 130.3% -69.3%
TCMCF          4,903       13.89        14.05                              -   1.2% 1.0% 0.1%
TGONF          7,000       10.27        11.35                 3,452.50 15.3% 22.0% -6.7%
TIME          2,000       22.89        23.77                              -   3.8% 2.5% 1.4%
TNH              700    146.54      141.64                 1,555.00 -1.8% 3.5% -5.3%
           
           
           
           
           
           
           
           
           
Total Open                     55,992 13.6% 19.3% -5.7%
Closed 12.0% 10.7% 1.2%
Combined 12.2% 11.8% 0.3%
Annualized IRR Since 12/31/10 17.1%
2014 Gain 5.5%


As I sold off a couple nice winners (like BBEP) and NADL taking an absolute swan dive this past week, the open component of this portfolio does not look so hot.  Overall, it has frankly been a push.

Discretionary Portfolio

Stock Shares Avg Cost Current Price Pct Change R3K Change Diff
AGX             190       36.71               35.57 -3.1% 2.6% -5.8%
BAC-WTA       12,000         6.05                 7.61 25.7% 14.3% 11.4%
GNW       13,880       10.08               13.19 30.9% 24.8% 6.2%
GTAT       14,000         9.15               12.24 33.7% 12.3% 21.4%
HIG-WT         1,650       21.24               29.34 38.2% 22.1% 16.1%
        
        
        
        
        
        
        
        
        
        
Total Open 30.9% 18.0% 13.0%
Closed 3.0% 1.4% 1.5%
Combined 4.8% 2.5% 2.3%

Kind of like 10 little Indians. "And Then There Were None".  I have been selling these off.  I would suggest I am now down to my core positions.

Charlie Brown Philosophy

Charlie Brown used to say, "if you learn more from losing than you do from winning, I must be the smartest guy on the planet".  I have been losing lately, though again I am still in the green for the year, I still have a strong capital posiion and a lot of cash on the sidelines.  So the war is certainly not lost. But I do need to learn from my losses.

And thus, the change in direction that I have put into play this week.  Have a great weekend everyone.



6 comments:

msmith1862 said...

Hi Marsh- Are you going to hold GNW and BAC? Both got little write up in Barrons this week
http://online.barrons.com/home-page

Marsh_Gerda said...

Thanks for pointing out the GNW article. I had not seen it, though it is exactly the same argument I made on August 16th. It is a LT hold for me and I have also bought January 2016 options with a $17 strike price (a steal under 90 cents). I also plan to hold my BAC warrants until 2019. I expect BAC to be well north of $32 by then.

Robert said...

Marshall, I know you sold out of FSC, but in reading your posts on the BW&P Investing Club, I understand you still like FSC. I have shares of FSC and really like the yield and the monthly income and am even thinking of adding more. Do you have any concerns with this company? Thanks Robert

Marsh_Gerda said...

Robert - I do not have concerns on FSC.

Karl Nelson said...

I noticed on the new strategy example that you would "throw out" PDLI from the tranche. Reasoning? It seems to me that it might be one of the best for a year long hold since it has declined so much, so quickly. Would appreciate your thoughts.
Karl

Marsh_Gerda said...

Karl - PDLI depends on royalty income. I am not sure how sustainable that it.