December 31st, 2013 Monthly Tracking Portfolio

Monthly Tracking Portfolio

Another month year 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 pleased to report that that we ended a four month losing streak.  It was close, up 12.7% versus 11.9% for R3K. Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
STRA	34.47	74.28	115.5%	33.51	381
IQNT	11.07	19.63	77.3%	9.80	366
QCOR	53.77	93.60	74.1%	47.71	3,294
MYGN	20.98	34.06	62.3%	20.50	1,789
BAH	16.97	26.53	56.3%	17.20	2,721
SAIC	32.17	49.53	54.0%	32.50	1,589
GTIV	12.41	19.05	53.5%	7.35	392
VGR	14.48	21.31	47.2%	15.36	1,558
PRSC	25.72	36.44	41.7%	23.91	343
AAPL	78.49	110.38	40.6%	70.51	498,632
CHE	75.95	105.67	39.1%	72.50	1,356
DHX	7.25	10.01	38.1%	6.50	418
USNA	75.58	102.59	35.7%	55.01	1,083
RAI	47.78	64.27	34.5%	46.55	26,932
MO	36.64	49.27	34.5%	33.80	76,731
NOC	112.18	147.39	31.4%	109.17	25,495
LO	48.55	62.94	29.6%	46.48	18,697
EGL	33.40	42.80	28.1%	30.22	578
CSCO	21.74	27.82	27.9%	21.27	119,661
MSFT	36.41	46.45	27.6%	34.63	311,222
APOL	27.32	34.11	24.9%	23.30	3,083
AGX	26.97	33.64	24.7%	26.09	384
SPOK	14.04	17.36	23.6%	12.93	316
DLX	51.10	62.25	21.8%	44.64	2,625
RTN	89.03	108.17	21.5%	87.64	28,890
EBIX	14.43	16.99	17.7%	12.12	566
CACI	73.22	86.18	17.7%	67.01	1,708
CRUS	20.43	23.57	15.4%	16.80	1,304
ATVI	17.66	20.15	14.1%	16.55	12,282
BKE	49.14	52.52	6.9%	41.45	2,546
UNTD	13.76	14.55	5.7%	9.20	182
CRTX	9.49	9.48	-0.1%	7.77	252
LPS	37.38	37.30	-0.2%	N/A	3,192
VCI	34.25	34.00	-0.7%	N/A	1,319
PDLI	7.89	7.71	-2.3%	7.22	1,436
NATR	15.21	14.82	-2.6%	12.91	281
CA	32.54	30.45	-6.4%	25.25	15,034
PETS	15.80	14.37	-9.1%	12.07	333
UIS	33.57	29.48	-12.2%	18.72	1,475
RPXC	16.90	13.78	-18.5%	12.71	923
WTW	32.93	24.84	-24.6%	19.09	1,874
GME	47.68	33.80	-29.1%	31.81	5,725
SWHC	13.49	9.47	-29.8%	9.03	753
COH	54.24	37.56	-30.8%	32.72	15,813
PFMT	10.30	6.65	-35.4%	5.95	506
RGR	71.03	34.63	-51.2%	33.60	1,397
HLF	78.35	37.70	-51.9%	35.45	7,893
LQDT	22.66	8.17	-63.9%	7.41	694
GNI	43.87	13.90	-68.3%	15.04	105
ESI	33.58	9.61	-71.4%	3.66	778

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	12.7%	11.9%	1
1/31/2014	16.0%	15.6%	1
2/28/2014	10.9%	10.4%	1
3/28/2014	4.3%	10.8%	0
4/25/2014	3.1%	10.7%	0
5/30/2014	5.7%	7.3%	0
6/27/2014	1.7%	4.8%	0
7/25/2014	4.2%	4.3%	0
8/29/2014	3.7%	2.5%	1
9/26/2014	11.4%	4.1%	1
10/31/2014	5.0%	2.0%	1
11/28/2014	1.8%	-0.5%	1
Average	10.0%	9.3%	0

As noted, we recently ended a 5 month losing streak.  There is some improvement as now 6 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 14.5%.  The new portfolio was solid, up 47.8% - as SAIC & PRSC were both terrific. 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	186,577
Total Russell 3K	191,549
New	190,631
Dividend	430,270