Well, one day into the New Year. I was exactly on par with the averages, down about a tenth of a percent. I continue to do nothing, except follow my more disciplined approach. It is difficult, I was very tempted yesterday. I actually went into my Fidelity trading screen. In the Beer, Pizza and Whiskey Investing club, there was a lot of discussion about buying UCO and then selling January 2016 calls. You could buy UCO (which is a leveraged ETF to the price of oil => pretty volatile of late) for a bit under $10. You could then turn around and sell January 2016 $10 calls at $3.10. So if UCO stays flat over the year, you make 31%. Of course you only have minimal upside and you get all the downside. So UCO is 2x levered to daily movements in price of oil. It is simplistic, but if the price of oil dropped 15%, you would about break-even on this trade.
Reversion to the mean, suggests that oil will not stay at $53. But I am not so sure that will occur within a year. There is a price war going on in oil right now, and I am uncertain who will blink first. That being said, the 31% call premium strikes me as sufficient for the risk (will oil really go to $44-$45 range for extended time?). Either way, I was tempted but proven worthy and did nor execute the trade - really due to wanting to be disciplined this year as opposed to thinking it was a poor trade.
MFI Select
I guess the countdown now begins on my February 1st tranche, less than 30 days to go. It has been a solid tranche, really helped by SNDK & KLAC. I am a bit concerned about WNR, I saw on Friday where HFC is taking a big write-off (HollyFrontier Corporation Announces Expected Lower of Cost or Market Inventory). I wonder if WNR has same issue.
Not sure what stocks I will buy a month from now. A short list might include KING, VEC, CBI, ITRN, CRT, WILN and MNDO. But a lot can happen in a month.
My February 2014 tranche is up 19.1%. The rejects for the portfolio are up about 13%. USNA (71%) and AAPL (56%) were the big winners I didn't pick. The five stocks I sold are only up about 2%, really crippled by the NUS crash.
Here are my current select holdings:
| 2/1/14 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| $17.13 | $20.13 | $0.20 | 18.7% | 15.9% | |
| $61.47 | $70.29 | $18.40 | 44.3% | 15.9% | |
| RPXC | $16.22 | $13.71 | $0.00 | -15.5% | 15.9% |
| $69.55 | $97.88 | $0.83 | 41.9% | 15.9% | |
| WNR | $39.11 | $38.36 | $3.04 | 5.9% | 15.9% |
| Totals | 19.1% | 15.9% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| AVG | $19.57 | $19.58 | $0.00 | 0.0% | 10.3% |
| CA | $29.54 | $30.69 | $0.75 | 6.4% | 10.3% |
| $22.79 | $27.61 | $0.38 | 22.8% | 10.3% | |
| NSR | $25.82 | $27.74 | $0.00 | 7.5% | 10.3% |
| $28.78 | $35.95 | $0.70 | 27.3% | 10.3% | |
| Totals | 12.8% | 10.3% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| $24.40 | $27.61 | $0.19 | 13.9% | 5.6% | |
| AGX | $36.71 | $33.52 | $0.70 | -6.8% | 5.6% |
| ITRN | $21.32 | $21.69 | $0.38 | 3.5% | 5.6% |
| $9.34 | $11.72 | $0.04 | 25.9% | 5.6% | |
| $58.25 | $42.05 | $0.14 | -27.6% | 5.6% | |
| Totals | 1.8% | 5.6% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| $64.80 | $60.69 | $0.21 | -6.0% | 1.3% | |
| IPCM | $38.45 | $45.75 | $0.00 | 19.0% | 1.3% |
| VIAB | $72.29 | $75.40 | $0.33 | 4.8% | 1.3% |
| NHTC | $12.19 | $11.33 | $0.01 | -7.0% | 1.3% |
| $4.40 | $4.50 | $0.00 | 2.3% | 1.3% | |
| Totals | 2.6% | 1.3% |
So only the August tranche is losing to the benchmark. CBI has really been hurt by the Oil and Gas price drop as they are heavily involved in construction with that industry.
MFI Formula
Well, I celebrated my first full trading day of my newest formula tranche. It is not exactly off to a roaring start.
| 10/1/2014 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BAH | $23.52 | $26.56 | $0.11 | 13.4% | 5.1% |
| $45.55 | $52.73 | $0.22 | 16.3% | 5.1% | |
| CA | $27.87 | $30.69 | $0.25 | 11.0% | 5.1% |
| $41.70 | $33.80 | $0.33 | -18.2% | 5.1% | |
| $44.56 | $42.24 | $0.35 | -4.4% | 5.1% | |
| Totals | 3.6% | 5.1% | |||
| 12/31/14 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CA | $30.83 | $30.69 | $0.00 | -0.4% | -1.2% |
| $28.36 | $27.61 | $0.00 | -2.7% | -1.2% | |
| $34.81 | $34.90 | $0.00 | 0.2% | -1.2% | |
| $34.21 | $33.80 | $0.00 | -1.2% | -1.2% | |
| IQNT | $19.87 | $19.13 | $0.00 | -3.7% | -1.2% |
| Totals | -1.6% | -1.2% |
Actually, both these tranches are lagging currently. Obviously cannot judge after just 90 days, but would be preferable to be ahead.
Dividends
It is interesting, with my increased focus on MFI dividend stocks, my annual income from dividends has been steadily rising. Here is a chart (recall these use my "secret" factor).
The fourth quarter was helped materially by the special dividend paid by KLAC. I will also soon be getting a special dividend from BKE. So while I am a bit down on my dividend portfolio, I am steadily ratcheting up a solid income stream. As I am now closer to 60 than 50 in age, this income stream will become more and more important. That is why CSQ, AOD, NTC have become some of my largest holdings as I continuously reinvest their dividends.
Well, I think that is a wrap for the day. I plan to chill out this weekend and watch some great NFL football. Go Cowboys & Colts!
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1 comment:
Marsh, excellent job keeping track of MFI for so many years! Is there a post where you explain the difference between your MFI select and MFI formula strategies? I tried to search but the results were not helpful. Thanks!
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