Weekend Update - October 4th

Weekend Update

Not feeling too hot today.  I woke up Friday morning in New York with cold/flu symptoms and it has just gotten worse.  Having some fresh Apple Cider to try to help this morning.

It probably doesn't help that last week was my fifth straight week of decline.  It may not be a "correction" or "bear market" for the broader market, but it certainly is for me.  I saw a very similar stretch in 2007, where my stocks went down in advance of the big crash in 2008. I do believe smaller cap stocks can be a leading indicator.

I was busy on the transaction front during the week.  I did start off my new MFI strategy, dubbed "MFI Big".  I also did buy VEC (which was a good move) and I bought and sold VSLR (which was a bad move.

For the month of September, I was down 10.4% (ouch). For the 3rd quarter, I was down 9.5%.  For the year, I am up 4.3%.

Week By Week Graph

Certainly not for the faint of heart or those with "week" stomachs.  Here is my week by week chart compared with Russell 3000 in 2014.  Pretty steep sell off.  It could have been much much worse. I did get some relief by deciding to sell a bunch of stocks and transition my strategy about 3 weeks ago.  The stocks I sold are down 8.4% since my sale!  RIOM is down 20% and TLM is down 16%.  I don't need to tell my readers that anything associated with basic materials has been crushed.

MFI Big

So let us lead off with my five stinky stocks using my formula-driven approach.  Recall that these were from the official MFI list and then picked using a random number generator.  I do not think I would have actually picked all five of these stocks (I have some concerns).

10/1/2014 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
BAH	$23.52	$24.76	$0.00	5.3%	-0.2%
BKE	$45.55	$46.26	$0.00	1.6%	-0.2%
CA	$27.87	$27.46	$0.00	-1.5%	-0.2%
GME	$41.70	$40.46	$0.00	-3.0%	-0.2%
NUS	$44.56	$44.99	$0.00	1.0%	-0.2%
Totals				0.7%	-0.2%

So you  can see in the first week that they are doing ok.  51 weeks to go.

MFI

Now let us look at my traditional MFI and the four open tranches.  First, let us see the month by month changes:

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
10/1/2014	29.38%	168,321
Current	29.36%	168,021

You can see that on par with my overall portfolio struggling in September and the 3rd quarter, this portfolio was not excluded. Down about 5.5% for both time frames.

11/15/13 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$17.22	$16.75	$0.00	-2.7%	10.1%
ATVI	$17.71	$20.71	$0.20	18.1%	10.1%
GA	$9.04	$11.90	$0.23	34.2%	10.1%
RPXC	$17.04	$14.33	$0.00	-15.9%	10.1%
SYNA	$48.01	$76.87	$0.00	60.1%	10.1%
Totals				18.8%	10.1%
2/1/14 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
ATVI	$17.13	$20.71	$0.20	22.1%	10.1%
KLAC	$61.47	$76.25	$1.40	26.3%	10.1%
RPXC	$16.22	$14.33	$0.00	-11.7%	10.1%
SNDK	$69.55	$95.63	$0.53	38.3%	10.1%
WNR	$39.11	$40.65	$0.78	5.9%	10.1%
Totals				16.2%	10.1%
5/6/2014	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$19.57	$16.75	$0.00	-14.4%	4.8%
CA	$29.54	$27.46	$0.50	-5.4%	4.8%
CSCO	$22.79	$25.31	$0.38	12.7%	4.8%
NSR	$25.82	$24.86	$0.00	-3.7%	4.8%
RCII	$28.78	$30.55	$0.46	7.8%	4.8%
Totals				-0.6%	4.8%
8/15/2014	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$24.40	$25.31	$0.19	4.5%	0.3%
AGX	$36.71	$33.05	$0.00	-10.0%	0.3%
ITRN	$21.32	$21.18	$0.19	0.2%	0.3%
BRCD	$9.34	$10.61	$0.04	14.0%	0.3%
CBI	$58.25	$54.41	$0.07	-6.5%	0.3%
Totals				0.5%	0.3%
Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	0.5%	18.8%	16.2%	-0.6%	8.7%
Previous Tranche	41.4%	43.7%	78.3%	33.0%	49.4%
Tranche -2	14.1%	-	-	-	3.5%
MFI Overall Gain	62.1%	70.7%	107.1%	32.2%	68.0%
Current Balance	40,514	42,676	51,775	33,056	168,021
R3K Current Tranche	19.4%	10.1%	10.1%	4.8%	11.1%
R3K Overall Gain	46.3%	50.5%	33.4%	24.5%	38.7%
R3K Balance	36,569	37,614	33,344	31,135	138,662
Annualized IRR	25.3%	32.8%	54.6%	21.8%	34.3%

The May and August tranches are struggling to get much traction. But this is symptomatic of MFI in total.  It is a streaky system. My 10 rejects for August are down over 4% but my ten rejects for May are up 4.5%. The end of April and end of July MFI tracking portfolios of 50 stocks are each down about 3.5%.

Dividend Portfolio

 I did add CCUR to this portfolio this week.  It is a promising micro cap that yields about 6.4%.

Stock	Shares	Avg Cost	Current Price	Dividends Received	Pct Change	R3K Change	Diff
AOD	14,281	8.04	8.42	12,519.36	15.7%	20.3%	-4.6%
CCUR	7,000	7.25	7.49	-	3.3%	1.2%	2.2%
CSQ	7,050	8.74	11.66	14,847.48	57.5%	53.7%	3.9%
EXETF	6,000	7.82	7.31	240.00	-6.0%	-2.8%	-3.2%
NADL	9,572	9.11	6.06	2,727.85	-30.4%	0.6%	-31.0%
NTC	6,847	12.02	12.43	3,060.02	7.1%	5.1%	2.0%
O	603	21.12	41.10	9,680.62	170.7%	112.9%	57.7%
OIBAX	4,167	5.01	6.00	8,381.18	60.0%	123.2%	-63.3%
TCMCF	4,903	13.89	12.46	-	-10.3%	-1.7%	-8.6%
TGONF	7,000	10.27	10.96	3,452.50	11.5%	18.7%	-7.2%
TIME	2,000	22.89	22.74	-	-0.7%	-0.3%	-0.3%
TNH	700	146.54	140.70	1,555.00	-2.5%	0.7%	-3.1%
Total Open				56,464	8.4%	14.8%	-6.4%
Closed					11.9%	10.5%	1.4%
Combined					11.5%	11.1%	0.3%
Annualized IRR Since 12/31/10					15.4%
2014 Gain					-0.7%

Now down for the year.  NADL has been in free fall. TIME has also been down a lot of late.  TCMCF, which seemed like such a steal, is also down.

Discretionary Portfolio

Stock	Shares	Avg Cost	Current Price	Pct Change	R3K Change	Diff
AGX	190	36.71	33.05	-10.0%	-0.1%	-9.8%
BAC-WTA	12,000	6.05	7.50	23.9%	11.2%	12.7%
GNW	13,880	10.08	13.37	32.7%	21.4%	11.3%
GTAT	14,000	9.15	12.13	32.5%	9.3%	23.3%
HIG-WT	1,650	21.24	28.97	36.4%	18.8%	17.6%
VEC	4,000	19.79	21.75	9.9%	1.0%	8.9%
Total Open				27.0%	12.4%	14.6%
Closed				2.5%	1.3%	1.2%
Combined				4.4%	2.2%	2.2%