January 31st 2014 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 are now on a 2 month winning streak.  It was close, up 14.2% versus 13.0% for R3K. Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
STRA	34.96	67.00	91.6%	33.51	379
SCSS	16.37	29.84	82.3%	15.31	904
BAH	16.19	29.11	79.8%	17.20	2,641
EBIX	13.32	22.85	71.5%	12.12	516
GTIV	11.36	19.42	71.0%	7.35	357
AAPL	70.04	117.16	67.3%	70.51	446,759
USNA	59.87	98.04	63.8%	56.49	830
MO	33.61	53.10	58.0%	33.80	70,210
CRUS	17.51	26.50	51.3%	16.80	1,101
IQNT	11.25	16.82	49.5%	10.06	373
PRSC	26.39	39.00	47.8%	23.91	356
RAI	46.35	67.95	46.6%	46.55	26,240
QCOR	66.53	93.60	40.7%	47.71	4,072
LO	47.15	65.61	39.2%	46.48	18,162
NOC	113.10	156.95	38.8%	109.17	25,144
MYGN	27.63	37.42	35.4%	26.09	2,377
SAIC	36.08	48.78	35.2%	34.04	1,813
CHE	78.23	101.14	29.3%	72.50	1,384
PETS	12.57	15.70	24.9%	12.07	267
CSCO	21.25	26.37	24.1%	21.27	117,832
ATVI	16.97	20.90	23.1%	16.64	11,820
BKE	41.34	50.79	22.9%	41.45	2,142
SPOK	14.02	17.12	22.1%	12.93	309
DHX	7.00	8.27	18.1%	6.50	400
MANT	28.29	32.53	15.0%	26.09	1,082
SNDK	68.91	75.91	10.2%	66.80	15,666
MSFT	36.83	40.40	9.7%	35.69	314,072
AGX	27.80	30.41	9.4%	26.09	403
UNTD	12.11	13.20	9.0%	9.20	161
EGL	38.31	39.90	4.2%	30.22	660
GME	33.95	35.25	3.8%	31.69	4,075
LFVN	1.23	1.27	3.3%	1.10	145
VCI	34.00	34.00	0.0%	34.00	1,307
CRTX	9.48	9.48	0.0%	7.77	252
CA	31.04	30.30	-2.4%	25.25	14,221
NATR	14.28	13.83	-3.2%	12.91	264
SWHC	13.09	12.30	-6.0%	9.03	732
PDLI	8.51	7.29	-14.3%	7.16	1,543
COH	46.28	37.19	-19.6%	32.72	13,271
APOL	32.29	25.26	-21.8%	23.30	3,639
NSR	33.89	26.29	-22.4%	23.82	2,067
RPXC	16.22	12.35	-23.9%	11.94	885
SPRT	2.70	1.96	-27.4%	1.79	157
FLR	75.10	53.59	-28.6%	51.80	12,401
WTW	27.03	16.56	-38.7%	16.60	1,524
PFMT	8.53	4.96	-41.9%	3.65	411
RGR	74.02	40.40	-45.4%	33.60	1,474
HLF	64.08	30.48	-52.4%	27.60	6,521
LQDT	23.77	7.74	-67.4%	7.32	756
ESI	29.40	7.27	-75.3%	3.66	687

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	14.2%	13.0%	1
2/28/2014	9.4%	7.9%	1
3/28/2014	1.6%	8.3%	0
4/25/2014	-0.7%	8.2%	0
5/30/2014	2.8%	4.9%	0
6/27/2014	-1.6%	2.5%	0
7/25/2014	0.5%	2.0%	0
8/29/2014	-0.1%	0.2%	0
9/26/2014	5.9%	1.7%	1
10/31/2014	1.4%	-0.4%	1
11/28/2014	-2.2%	-2.8%	1
12/31/2014	-4.2%	-2.7%	0
Average	9.5%	9.0%	0

As noted, we recently ended a 5 month losing streak.  There is some improvement as now 4 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 solid, up about 18.9%.  The new portfolio was just ok, up 10.7%. 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	180,800
Total Russell 3K	187,067
New	186,038
Dividend	430,477