November 29th 2013 Monthly Tracking Portfoli

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.

Onward

 Fearless readers will recall we had a 29 month "losing streak"..  Then we had a 13 month winning streak.  I am disheartened to report that that we appear to be starting a new losing streak, as we lost for fifth straight month.. :( It wasn't close, up 12.3% versus 15.6% for R3K. Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
STRA	37.15	75.69	103.7%	33.51	403
BAH	15.49	27.21	75.7%	17.18	2,522
IQNT	11.18	18.42	64.8%	9.80	373
QCOR	57.28	93.60	63.4%	47.71	3,525
GTIV	12.35	19.41	57.2%	7.35	388
AAPL	77.80	118.93	52.9%	70.51	500,025
VGR	14.41	21.75	50.9%	15.35	1,548
DHX	7.28	10.87	49.3%	6.50	416
USNA	73.11	106.64	45.9%	55.01	1,013
MO	35.21	50.26	42.7%	33.80	73,971
CHE	77.25	110.11	42.5%	72.50	1,367
AGX	22.94	31.77	38.5%	20.55	329
RAI	48.11	65.91	37.0%	46.55	27,295
CSCO	20.59	27.64	34.2%	20.22	114,283
EGL	31.85	42.05	32.0%	30.22	548
MSFT	37.11	47.81	28.8%	34.63	318,233
LO	49.17	63.14	28.4%	46.48	18,941
NOC	110.29	140.93	27.8%	107.21	25,215
ATVI	17.05	21.65	27.0%	16.55	11,875
CACI	71.77	89.19	24.3%	67.01	1,681
HRB	27.17	33.64	23.8%	26.92	7,638
RTN	86.52	106.70	23.3%	85.21	28,331
DLX	48.65	58.45	20.1%	44.64	2,508
APOL	26.29	31.22	18.8%	23.30	2,979
EBIX	13.66	16.21	18.7%	12.12	529
VCI	29.10	34.00	16.8%	N/A	1,128
MYGN	29.75	33.53	12.7%	20.02	2,560
SPOK	14.45	15.86	9.8%	12.58	318
MANT	27.95	30.12	7.8%	26.09	1,069
LPS	35.11	37.30	6.2%	N/A	2,995
BKE	49.60	51.19	3.2%	41.45	2,564
CRTX	9.49	9.48	-0.1%	7.77	252
CA	31.92	31.15	-2.4%	25.25	14,751
UIS	27.47	26.72	-2.7%	18.72	1,206
CRUS	20.18	18.29	-9.4%	16.81	1,281
PDLI	9.17	8.26	-9.9%	7.22	1,657
PETS	14.99	13.50	-9.9%	12.07	319
WTW	32.41	29.00	-10.5%	19.09	1,828
MSB	20.43	17.95	-12.1%	17.70	293
SWHC	11.82	9.97	-15.7%	9.03	745
UNTD	15.83	13.06	-17.5%	9.20	210
GME	46.44	37.81	-18.6%	33.10	5,561
RPXC	16.52	13.12	-20.6%	13.06	901
COH	56.16	37.12	-33.9%	32.72	16,236
PFMT	10.49	6.80	-35.2%	6.50	505
HLF	69.37	43.25	-37.7%	36.97	7,059
RGR	74.76	38.09	-49.1%	36.66	1,488
GNI	51.07	23.77	-53.4%	16.80	111
LQDT	23.17	10.51	-54.6%	10.19	737
ESI	38.99	8.31	-78.7%	3.66	911

I did find another site that has been tracking since 2006 this week.  It uses a different approach, just 5 stocks picked randomly every quarter. They have had better results than me (TrackJGreenblatt's Stock Picks). I found it very interesting and would encourage people to take a looksee.

STRA was number one.  Ironically, another for profit education stock, ESI was #50.

Here is a listing of every portfolio I have tracked:

Date	MFI	R3K	Lead
1/6/2006	16.0%	10.9%	1
2/17/2006	21.2%	14.6%	1
3/29/2006	13.0%	9.6%	1
4/7/2006	10.3%	12.1%	0
5/12/2006	20.4%	18.6%	1
5/31/2006	29.2%	23.3%	1
6/30/2006	22.4%	20.0%	1
7/31/2006	19.7%	17.3%	1
8/31/2006	13.0%	13.3%	0
9/28/2006	12.7%	14.6%	0
10/27/2006	10.3%	12.0%	0
11/29/2006	-0.3%	4.8%	0
12/28/2006	-6.9%	3.4%	0
1/26/2007	-10.2%	-6.6%	0
2/27/2007	-3.7%	-1.0%	0
3/26/2007	-9.8%	-5.5%	0
4/27/2007	-10.9%	-5.0%	0
5/29/2007	-11.5%	-6.3%	0
7/3/2007	-30.0%	-15.6%	0
7/30/2007	-19.9%	-11.5%	0
8/30/2007	-12.5%	-8.7%	0
9/27/2007	-19.0%	-18.2%	0
11/2/2007	-40.4%	-34.3%	0
11/28/2007	-40.1%	-38.3%	0
12/28/2007	-36.3%	-40.0%	1
1/25/2008	-36.4%	-35.9%	0
2/26/2008	-51.7%	-41.5%	0
3/24/2008	-40.9%	-36.8%	0
4/25/2008	-25.6%	-31.0%	1
5/28/2008	-22.2%	-33.6%	1
7/2/2008	-11.7%	-25.3%	1
7/29/2008	-10.5%	-20.9%	1
8/29/2008	-13.8%	-17.9%	1
9/26/2008	-4.3%	-10.0%	1
10/31/2008	18.7%	13.9%	1
11/26/2008	50.9%	27.7%	1
12/26/2008	48.9%	32.3%	1
1/23/2009	59.3%	36.4%	1
2/27/2009	92.8%	55.6%	1
3/27/2009	85.8%	48.1%	1
4/24/2009	69.7%	45.8%	1
5/29/2009	31.8%	22.8%	1
6/29/2009	21.3%	24.0%	0
7/29/2009	19.5%	15.9%	1
8/28/2009	7.4%	8.8%	0
9/25/2009	12.6%	12.4%	1
10/30/2009	22.7%	18.3%	1
11/27/2009	24.3%	13.6%	1
12/31/2009	23.7%	18.1%	1
1/22/2010	19.0%	20.6%	0
2/26/2010	18.6%	23.6%	0
3/25/2010	10.0%	15.4%	0
4/23/2010	7.1%	11.4%	0
5/28/2010	19.3%	25.4%	0
6/29/2010	16.7%	25.7%	0
7/29/2010	5.4%	20.1%	0
9/2/2010	7.3%	10.1%	0
9/24/2010	-4.3%	0.3%	0
10/29/2010	-2.9%	10.4%	0
11/26/2010	-8.5%	1.4%	0
1/3/2011	-11.4%	0.1%	0
1/28/2011	-7.6%	4.9%	0
2/25/2011	-5.5%	5.0%	0
3/24/2011	-4.4%	7.4%	0
4/21/2011	-16.0%	3.2%	0
5/27/2011	-12.0%	-0.4%	0
6/24/2011	-9.5%	5.0%	0
7/29/2011	-4.3%	8.1%	0
8/26/2011	12.0%	21.6%	0
9/30/2011	23.5%	29.6%	0
10/28/2011	0.4%	11.5%	0
11/25/2011	13.9%	24.0%	0
12/29/2011	9.9%	15.9%	0
1/27/2012	7.4%	16.6%	0
2/24/2012	7.8%	13.3%	0
3/23/2012	9.1%	15.2%	0
4/27/2012	10.5%	15.3%	0
5/25/2012	26.5%	27.5%	0
6/22/2012	26.1%	24.6%	1
7/27/2012	30.4%	25.7%	1
8/24/2012	26.0%	19.8%	1
9/28/2012	39.3%	22.1%	1
10/26/2012	48.3%	28.9%	1
11/23/2012	45.7%	32.1%	1
12/31/2012	52.3%	33.0%	1
1/25/2013	39.5%	22.0%	1
2/22/2013	46.5%	26.4%	1
3/28/2013	40.1%	21.2%	1
4/26/2013	35.0%	20.5%	1
5/24/2013	20.4%	19.2%	1
6/28/2013	26.9%	24.1%	1
7/29/2013	17.8%	19.0%	0
8/30/2013	17.5%	24.6%	0
9/27/2013	12.9%	17.7%	0
10/25/2013	11.8%	15.4%	0
11/29/2013	12.3%	15.6%	0
12/31/2013	13.2%	12.4%	1
1/31/2014	16.6%	16.2%	1
2/28/2014	10.9%	10.9%	0
3/28/2014	5.1%	11.3%	0
4/25/2014	3.1%	11.3%	0
5/30/2014	4.4%	7.8%	0
6/27/2014	0.5%	5.4%	0
7/25/2014	3.1%	4.9%	0
8/29/2014	1.2%	3.0%	0
9/26/2014	7.2%	4.6%	1
10/31/2014	2.9%	2.5%	1
Average	10.0%	9.6%	0

As noted, we recently ended a 13 month winning streak, which was proceeded by 29 straight months of losses! (that is hard to do... it ain't random).  There is some improvement as now only the 7 of the 11 newest portfolios are all trailing.  Still some time to go.

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 average (relatively), up about 15.6%.  The new portfolio was solid, up 25.6% - as tobacco stocks VGR and RAI were smoking. 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 today if you had spread $100,000 over the first twelve portfolios evenly.

Category	Value
Total	185,126
Total Russell 3K	192,458
New	186,234
Dividend	429,839