I thought everyone might enjoy a quick MFI Index Update. As my 35 readers know, I annually create a basket of 50 MFI that constitute my MFI Index. I change them once a year (on Dec 31st).
MFI Index vs IWV
Here is a table going back to 2006 showing the index against the Russell 3000:
| Annual | Inception to Date | |||
| Year | Russell | Russell ITD | MFI ITD | |
| 2006 | 11.40% | 15.03% | 11.40% | 15.03% |
| 2007 | 4.09% | -6.69% | 15.96% | 7.34% |
| 2008 | -37.05% | -37.97% | -27.00% | -33.42% |
| 2009 | 32.51% | 45.18% | -3.27% | -3.34% |
| 2010 | 18.38% | 22.77% | 14.50% | 18.67% |
| 2011 | -0.56% | -10.47% | 13.87% | 6.25% |
| 2012 | 16.43% | 9.70% | 32.57% | 16.56% |
| 2013 | 33.01% | 51.70% | 76.34% | 76.82% |
| 2014 | 12.26% | 12.07% | 97.95% | 98.15% |
| 2015 | 3.07% | 3.10% | 100.96% | 101.20% |
As you can see, it is an absolute dead heat. 100.96% to 101.2%. And 2015 is also a dead heat, 3.07% to 3.1%. The encouraging thing is February was great for MFI, up 7.4%, which mirrors my MFI Select (up 7.7% this month) and my MFI Formula (up 8.6%).
Performance of All 50 Stocks For 2015 and February
| Stock | Start | 30-Jan | Current | YTD Change | Feb Change |
| ADMS | 17.37 | 16.83 | 17.28 | -0.5% | 2.7% |
| AFOP | 14.51 | 14.48 | 16.98 | 17.0% | 17.3% |
| ANIK | 40.74 | 39.18 | 44.05 | 8.1% | 12.4% |
| APOL | 34.11 | 25.26 | 26.76 | -21.6% | 5.9% |
| AGX | 33.64 | 30.41 | 33.01 | -1.9% | 8.5% |
| AVID | 14.21 | 12.96 | 14.74 | 3.7% | 13.7% |
| AWRE | 4.54 | 4.88 | 4.59 | 1.1% | -5.9% |
| BCOR | 13.85 | 13.52 | 13.33 | -3.8% | -1.4% |
| BKE | 52.52 | 50.79 | 52.66 | 0.3% | 3.7% |
| CA | 30.45 | 30.30 | 32.83 | 7.8% | 8.3% |
| CSCO | 27.82 | 26.37 | 29.80 | 7.1% | 13.0% |
| COH | 37.56 | 37.19 | 41.54 | 10.6% | 11.7% |
| DLX | 62.25 | 64.93 | 68.32 | 9.8% | 5.2% |
| DEPO | 16.11 | 18.27 | 20.02 | 24.3% | 9.6% |
| EBIX | 16.99 | 22.85 | 28.13 | 65.6% | 23.1% |
| FLR | 60.63 | 53.59 | 59.33 | -2.1% | 10.7% |
| GME | 33.80 | 35.25 | 37.49 | 10.9% | 6.4% |
| GORO | 3.38 | 3.50 | 3.40 | 0.6% | -2.9% |
| ONE | 4.21 | 3.31 | 3.51 | -16.6% | 6.0% |
| IQNT | 19.63 | 16.82 | 17.94 | -8.6% | 6.7% |
| IDCC | 52.90 | 49.98 | 51.86 | -2.0% | 3.8% |
| IILG | 20.89 | 23.08 | 25.84 | 23.7% | 12.0% |
| ITRN | 22.04 | 20.75 | 23.09 | 4.8% | 11.3% |
| KING | 15.36 | 13.20 | 16.09 | 4.8% | 21.9% |
| LCI | 42.88 | 47.43 | 63.23 | 47.5% | 33.3% |
| LFVN | 1.30 | 1.27 | 1.00 | -23.1% | -21.3% |
| LQDT | 8.17 | 7.74 | 9.62 | 17.7% | 24.3% |
| MSB | 17.28 | 17.08 | 18.12 | 4.9% | 6.1% |
| NHTC | 11.45 | 12.00 | 13.50 | 17.9% | 12.5% |
| NSR | 27.80 | 26.29 | 26.57 | -4.4% | 1.1% |
| NUS | 43.70 | 40.98 | 55.17 | 26.2% | 34.6% |
| PDLI | 7.71 | 7.29 | 7.28 | -5.6% | 0.0% |
| PFMT | 6.65 | 4.96 | 5.93 | -10.8% | 19.6% |
| PETS | 14.37 | 15.70 | 15.53 | 8.1% | -1.1% |
| PBI | 24.37 | 23.98 | 23.00 | -5.6% | -4.1% |
| RPXC | 13.78 | 12.35 | 14.10 | 2.3% | 14.2% |
| SPOK | 17.36 | 17.12 | 18.93 | 9.0% | 10.6% |
| STRA | 74.28 | 67.00 | 61.45 | -17.3% | -8.3% |
| RGR | 34.63 | 40.40 | 42.66 | 23.2% | 5.6% |
| TTWO | 28.03 | 29.72 | 27.01 | -3.7% | -9.1% |
| TDC | 43.68 | 44.56 | 45.29 | 3.7% | 1.6% |
| TZOO | 12.62 | 8.58 | 9.68 | -23.3% | 12.8% |
| TPUB | 22.90 | 21.00 | 19.56 | -14.6% | -6.9% |
| UBNT | 29.64 | 26.30 | 31.36 | 5.8% | 19.3% |
| UIS | 29.48 | 21.93 | 23.19 | -21.3% | 5.7% |
| USNA | 102.59 | 98.04 | 102.40 | -0.2% | 4.4% |
| VEC | 27.40 | 27.84 | 32.11 | 17.2% | 15.3% |
| VIAB | 75.25 | 64.42 | 69.71 | -7.4% | 8.2% |
| WTW | 24.84 | 16.56 | 19.04 | -23.3% | 15.0% |
| WILN | 2.99 | 2.73 | 2.67 | -10.7% | -2.2% |
| Total | 19,816 | 18,943 | 20,431 | 3.1% | 7.9% |
Wow, should have bought EBIX, already up 65%. You can compare the February results with my 2/1/15 MFI tranche:
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| VEC | $28.00 | $32.11 | $0.00 | 14.7% | 6.0% |
| $62.73 | $71.52 | $0.00 | 14.0% | 6.0% | |
| VIAB | $63.91 | $69.71 | $0.00 | 9.1% | 6.0% |
| $22.03 | $23.19 | $0.00 | 5.3% | 6.0% | |
| NHTC | $12.44 | $13.50 | $0.00 | 8.5% | 6.0% |
| Totals | 10.3% | 6.0% |
Note the numbers can be slightly different as I bought my shares intra day.
The Big Picture
Here is a quick look at all my open tracking Portfolios (12 of them):
| Date | R3K | Lead | |
| 16.3% | 14.3% | 1 | |
| 8.3% | 14.7% | 0 | |
| 6.9% | 14.7% | 0 | |
| 8.8% | 11.1% | 0 | |
| 3.8% | 8.6% | 0 | |
| 6.7% | 8.0% | 0 | |
| 6.6% | 6.1% | 1 | |
| 13.4% | 7.7% | 1 | |
| 9.4% | 5.6% | 1 | |
| 5.2% | 3.0% | 1 | |
| 3.1% | 3.1% | 1 | |
| 7.3% | 6.0% | 1 | |
| Average | 8.0% | 8.6% | 0 |
You can see the 12/31/14 portfolio at 3.1% matches my index above (that is good!). You can see the 1/30/15 portfolio is up 7.3%, which is close to the 7.9% for the index (the 50 stocks at 1/30/15 are not exactly the same 50 as in the index). I think the positive news in the most recent 6 open portfolios are all "winning".
Randomizer
As my readers may recall, I did create a "Randomizer" spreadsheet to help me randomly pick my 5 formula stocks. Just for fun, here is what I would get if I started one today:
Here are the stocks that have a Yahoo yield > 2.4% and a market cap > 600m:
| Number | Ticker | Market Cap | Price | Dividend | Yield |
| 1 | 2,402 | 49.66 | 3.66 | 7.4% | |
| 2 | 148,701 | 29.61 | 0.76 | 2.6% | |
| 3 | 11,453 | 41.54 | 1.35 | 3.3% | |
| 4 | 4,098 | 37.49 | 1.32 | 3.5% | |
| 5 | KING | 5,180 | 16.09 | 0.46 | 2.9% |
| 6 | 360,400 | 43.86 | 1.18 | 2.7% | |
| 7 | 1,215 | 7.28 | 0.60 | 8.2% | |
| 8 | PPC | 7,160 | 27.65 | 5.77 | 20.9% |
| 9 | 4,623 | 23.00 | 0.75 | 3.3% | |
| 10 | 828 | 42.66 | 1.62 | 3.8% |
PPC is a strange one. They paid a huge special dividend.
Then if I run a\the Randomizer, picking 5 from these ten I get
That is a feature of this approach that can make one a bit nervous. You can get more concentration in certain names (I have 4 of these in my open two tranches).
That is it for now. Got another 5 or so inches of snow last night... great to be home.
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4 comments:
Marsh,
On the formula MFI it makes me more than nervous to have more than 5% in a stock. The book wanted 20 to 30 different names as I recall. Would you explain if you had 50% or 75% of all your money in this approach why you would want to double or triple your random bets.
I did the top 50 600M and gave them a random number. It produced 24 names.
I did the random sorter to give me 4 groups of 5 names. I did it four different times. The results was about 12 names vs 20 names. In a group of 20 I had 15% King, & COH, and 10% in PPC and HRB & CSCO, PDLI. and 5% in VIAB, TUP, OMC, MSFT, RTN, and EMR.
Why risk a over sized bet?
John - I hear you. Everyone has to make their own decision. I know by my back testing that if you exclude stocks that you already have bought, that reduces your overall return. I know it increases your risk, so you have to make the call for yourself. As we have discussed, the MFI Formula is only 1/2 my MFI investing, so I will not double up in the select side on stocks in my formula side.
But my limited experience of doubling up has been successful|
GME was down in first tranche 18% when I added to second tranche. It is up 8.7% in second tranche.
In 2/1/13 tranche I doubled down on AAPL, which was down 15% in prior tranche. It went up 13%.
In 8/15/15 I doubled down on KLIC, which was down slightly from May tranche buy. It ended up 26%.
In 11/15/13 tranche I doubled down on GA and it ended up 34%.
In 8/15/13 I doubled down on CF and it ended up 34%.
Finally in Febrtuary 2014 I doubled down on RPXC and that was a mistake, down 24%.
Marsh,
Thanks for that background. My game for today was to use your 10 formula stocks. I also played like they would not change very much over a year. PDLI, MSFT, RGR GME and KING ect. will still be on the list.
I need to hold my nose on any one of these. The results for then is:
20% MSFT, 20% COH, 15% PPC, 10% in PBI, RGR, PDLI, and 5% in BKE, CSCO, and GME.
So now you only have 9 names. The average risk has grown.
My Gut tells me and that the MFI formula will work in real time and beat the index by over 8 points and more.
With my first study I was working with 24 names and got 12 to 14 stocks. With 10 stocks you are going to end up with about 9 or less.
Going forward it will be interesting to see if 9 to 14 names will be beating the index. Anyone of them could be a value trap.
My wife had a 75th birthday in Las Vegas and the whole family did four days. Risk for me was $20 on the crap table. I know the risk for the hard 8 but have always been lucky.
Second roll I cashed in and did not try again.
John,
thanks for sharing. A hard eight is typically a "suckers" bet. Glad you won! 75th birthday, great to hear you two are still active. I am a couple decades behind.
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