Sunday, November 09, 2014

Weekend Update 11.8/14

Schloss Investing Rules
Weekend Update

After another really bad week, I want to go back to some basics.  I have lost a lot since September with my two largest positions, GTAT and GNW taking major hits.  What was my mistake?

I think they are vastly different examples - though they both boil down to the same issue, management not really being honest with shareholders. That is difficult as an outsider investor to catch - I was joined by many "smart" investors as well.  GTAT was over 5% owned by Morgan Stanley, Barron's had written several articles about GNW suggesting 50% undervalued.

There were red flags obviously in hindsight.  GTAT senior management selling shares. GNW disclosing a potential shortfall in LTC last quarter, even after CEO had said a couple weeks before things were fine (Genworth CEO Apologizes to Analysts After Reserve Shortfall).  But there are red flags in many investments.

Thinking long and hard about it, I think my real mistake was having positions that were so out sized in my portfolio.  While having concentrated positions is the fastest way to wealth, it is more risky to have more eggs in a single basket.  You are going to have failures.  I do think the fact that I had two so close to each other was more poor luck than something out and out wrong with my approach.  So if a position becomes out sized, I should pare it back some.  I don't really need that beachfront home in Hawaii, I do not really need home runs, just a lots of base hits, walks and solid defense.

I do apologize to my readers if you lost money on either of these two stocks.  I actually feel worse about that than the 15% hit I took on my portfolio.  I am just a blogger, certainly not a financial advisor.  I tell people what I am doing, why, and what I am feeling - but that should never be construed as financial advice.

MFI Tranches

While it feels like I have had nothing but bad news of late, that is not really true.  My MFI tranches went up nicely this week and also extended their lead over the IWV.  I was helped by AVG popping 12% yesterday - I think on buyout rumors.

11/15/13 Stocks Start Current Dividend Pct Gain R3K Gain
AVG $17.22 $19.77 $0.00 14.8% 14.0%
ATVI $17.71 $20.65 $0.20 17.7% 14.0%
GA $9.04 $11.90 $0.23 34.2% 14.0%
RPXC $17.04 $13.93 $0.00 -18.3% 14.0%
SYNA $48.01 $63.66 $0.00 32.6% 14.0%
Totals 16.2% 14.0%
2/1/14 Stocks Start Current Dividend Pct Gain R3K Gain
ATVI $17.13 $20.65 $0.20 21.7% 14.1%
KLAC $61.47 $80.00 $1.40 32.4% 14.1%
RPXC $16.22 $13.93 $0.00 -14.1% 14.1%
SNDK $69.55 $92.83 $0.83 34.7% 14.1%
WNR $39.11 $46.39 $1.04 21.3% 14.1%
Totals 19.2% 14.1%
5/6/2014 Start Current Dividend Pct Gain R3K Gain
AVG $19.57 $19.77 $0.00 1.0% 8.5%
CA $29.54 $30.05 $0.50 3.4% 8.5%
CSCO $22.79 $25.33 $0.38 12.8% 8.5%
NSR $25.82 $26.44 $0.00 2.4% 8.5%
RCII $28.78 $31.42 $0.46 10.8% 8.5%
Totals 6.1% 8.5%
8/15/2014 Start Current Dividend Pct Gain R3K Gain
CSCO $24.40 $25.33 $0.19 4.6% 3.9%
AGX $36.71 $34.07 $0.70 -5.3% 3.9%
ITRN $21.32 $20.38 $0.19 -3.5% 3.9%
BRCD $9.34 $10.92 $0.04 17.3% 3.9%
CBI $58.25 $55.58 $0.07 -4.5% 3.9%
Totals 1.7% 3.9%
Category/Tranche August November February May Total
Initial Investment      25,000       25,000     25,000      25,000    100,000
Current Tranche 1.7% 16.2% 19.2% 6.1% 10.8%
Previous Tranche 41.4% 43.7% 78.3% 33.0% 49.3%
Tranche -2 14.1%              -              -               -   3.5%
MFI Overall Gain 64.1% 67.1% 112.5% 41.1% 71.2%
Current Balance      41,021       41,766     53,115      35,279    171,181
R3K Current Tranche 3.9% 14.0% 14.1% 8.5% 10.2%
R3K Overall Gain 51.6% 55.9% 38.2% 29.1% 43.7%
R3K Balance      37,901       38,966     34,548      32,263    143,678
Annualized IRR 24.8% 29.6% 53.2% 25.6% 34.0%

This will be the final week for my November 15th tranche.  Hopefully no meltdowns! It does have a two point edge and if it wins it will be my fifth straight tranche to win.

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
11/1/2014 26.14%      168,810
Current 27.50%      171,181


Large MFI/Dividend Approach

As I have explained, I have started a new MFI strategy, larger cap stocks with dividends that are picked totally randomly (gasp). There is only one tranche right now with this approach. I will start my second tranche at the end of the year.  It had a bit of a rocky week with NUS having extremely poor earnings and guidance.

10/1/2014 Stocks Start Current Dividend Pct Gain R3K Gain
BAH $23.52 $25.74 $0.11 9.9% 3.4%
BKE $45.55 $49.50 $0.22 9.2% 3.4%
CA $27.87 $30.05 $0.00 7.8% 3.4%
GME $41.70 $43.69 $0.00 4.8% 3.4%
NUS $44.56 $40.50 $0.00 -9.1% 3.4%
Totals 4.5% 3.4%

So actually hanging in there.

Discretionary Portfolio

This is where the pain has been.

Stock Shares Avg Cost Current Price Pct Change R3K Change Diff
AGX             190       36.71               34.07 -7.2% 3.5% -10.7%
BAC-WTA       12,000         6.05                 7.25 19.8% 15.3% 4.5%
GNW       13,880       10.08                 8.41 -16.5% 25.8% -42.3%
HIG-WT         1,650       21.24               31.90 50.2% 23.1% 27.1%
HYH         2,000       36.27               36.96 1.9% 1.0% 0.9%
VEC         7,000       20.19               24.68 22.2% 6.8% 15.5%
        
        
        
        
        
        
        
        
        
Total Open 8.8% 14.1% -5.3%
Closed 0.9% 1.3% -0.4%
Combined 1.5% 2.2% -0.7%


Dividend Portfolio

Last, but not least any more (thanks to crash and burn of discretionary) is my dividend portfolio.   It is really underperforming (still). NADL, TCMCF and now EXETF have really, really done poorly.  I am getting lots of dividend income, but I have had some poor picks here. Down 2.3% on the year.


Stock Shares Avg Cost Current Price Dividends Received Pct Change R3K Change Diff
AOD        14,281         8.04          8.68               13,326.21 19.6% 24.6% -5.0%
CCUR          9,400         7.20          6.98                              -   -3.1% 5.9% -9.0%
CSQ          8,665         9.04        11.83               15,995.71 51.4% 48.6% 2.8%
EXETF          6,000         7.82          5.94                     480.00 -23.0% 0.7% -23.7%
KMF          2,000       34.07        37.61                              -   10.4% 9.0% 1.3%
NADL          9,572         9.11          5.44                 2,727.85 -37.2% 4.3% -41.5%
NTC          6,847       12.02        12.66                 3,450.33 9.5% 9.0% 0.6%
O              603       21.12        46.87                 9,791.02 198.9% 120.7% 78.2%
OIBAX          4,167         5.01          5.99                 8,381.18 59.8% 131.4% -71.6%
PGN        10,000         4.86          5.20                              -   7.0% 3.8% 3.2%
TCMCF          4,903       13.89          9.70                 1,991.00 -27.2% 1.9% -29.1%
TGONF          7,000       10.27        10.43                 3,452.50 6.3% 23.0% -16.7%
TNH              823    144.82      139.24                 1,555.00 -2.5% 5.0% -7.5%
           
           
           
           
           
           
           
Total Open                     61,151 6.4% 17.6% -11.2%
Closed 11.6% 10.5% 1.1%
Combined 10.8% 11.6% -0.8%
Annualized IRR Since 12/31/10 14.8%
2014 Gain -2.3%


Well, painful week to write about.  Next week is a new week.  Hopefully things get a little bit better.  I will likely wait until Monday (the 17th) to refresh my 11/15 tranche.

3 comments:

Lian Bao said...

Marshall, Do you see it is a good time to add to EXETF now that they have sold the US business.

Marsh_Gerda said...

Not really

Marsh_Gerda said...

I bought them as I felt there was embedded value in us biz. I was wrong.