Nothing Magical About One Year

Selling After A Year

For those that read Greenblatt's book about MFI, you will recall that he has you hold stocks for a year. The losers are sold just short of a year, to harvest ST losses (higher tax credit) and gains are sold at a year to be taxed at lower LT CG rate.  He says in the book that there is nothing optimal about one year, that was driven more by taxes than stock performance.  I thought readers might like to see how my tranches ran off post sale:

May

Here were the five stocks I sol last May:

5/6/2013	Start	Current	Dividend	Pct Gain	R3K Gain
KLIC	$11.40	$14.44	$0.00	26.7%	18.9%
CYOU	$29.24	$28.02	$0.00	-4.2%	18.9%
RDA	$9.74	$16.79	$0.10	73.5%	18.9%
NVDA	$13.85	$18.43	$0.32	35.4%	18.9%
CF	$183.97	$243.22	$2.80	33.7%	18.9%
Totals				33.0%	18.9%

Here are my five replacement stocks:

5/6/2014	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$19.57	$20.70	$0.00	5.8%	12.8%
CA	$29.54	$32.51	$1.00	13.4%	12.8%
CSCO	$22.79	$29.22	$0.57	30.7%	12.8%
NSR	$25.82	$25.48	$0.00	-1.3%	12.8%
RCII	$28.78	$29.87	$0.70	6.2%	12.8%
Totals				11.0%	12.8%

Then the five stocks I sold are up 11.8% (before dividends). So kind of a wash with R3K and a bit better than my five replacements.

Here are the five stocks I sold August 2014:

8/15/2013	Start	Current	Dividend	Pct Gain	R3K Gain
CF	$187.26	$247.43	$4.50	34.5%	19.4%
FLR	$66.06	$73.03	$0.53	11.4%	19.4%
AGX	$15.60	$36.71	$0.75	140.1%	19.4%
KLIC	$11.29	$14.26	$0.00	26.3%	19.4%
RPXC	$15.92	$15.09	$0.00	-5.2%	19.4%
Totals				41.4%	19.4%

Great group, right?

The five replacements:

8/15/2014	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$24.40	$29.22	$0.38	21.3%	8.0%
AGX	$36.71	$31.80	$0.70	-11.5%	8.0%
ITRN	$21.32	$22.71	$0.38	8.3%	8.0%
BRCD	$9.34	$12.39	$0.04	33.0%	8.0%
CBI	$58.25	$42.21	$0.14	-27.3%	8.0%
Totals				4.8%	8.0%

The sold stocks are down 1.3%, so good thing I sold them!

November 2014 group. Here are the five stocks I sold:

11/15/13 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$17.22	$19.21	$0.00	11.6%	14.5%
ATVI	$17.71	$20.10	$0.20	14.6%	14.5%
GA	$9.04	$11.90	$0.23	34.2%	14.5%
RPXC	$17.04	$13.91	$0.00	-18.4%	14.5%
SYNA	$48.01	$61.90	$0.00	28.9%	14.5%
Totals				14.2%	14.5%

Here are my five replacements:

11/15/2014	Start	Current	Dividend	Pct Gain	R3K Gain
FLR	$64.80	$59.75	$0.21	-7.5%	3.6%
IPCM	$38.45	$42.95	$0.00	11.7%	3.6%
VIAB	$72.29	$68.70	$0.33	-4.5%	3.6%
NHTC	$12.19	$12.50	$0.01	2.6%	3.6%
AWRE	$4.40	$4.44	$0.00	0.9%	3.6%
Totals				0.7%	3.6%

The five sold stocks (really 4 as GA went private) are up a very snappy 14%! That sure looks a lot better than my paltry 0.7% or IWV 3.6%.

Finally the recent February 1st tranche:

2/1/14 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
ATVI	$17.13	$20.90	$0.20	23.1%	12.9%
KLAC	$61.47	$61.47	$18.40	29.9%	12.9%
RPXC	$16.22	$12.35	$0.00	-23.9%	12.9%
SNDK	$69.55	$75.91	$0.83	10.3%	12.9%
WNR	$39.11	$37.13	$3.04	2.7%	12.9%
Totals				8.5%	12.9%

It was only up for a full year 8.5%. Since I sold these 5 names, there are up 10%!  If I had just held 3 more weeks.  Here are the replacement names:

2/1/2015	Start	Current	Dividend	Pct Gain	R3K Gain
VEC	$28.00	$31.37	$0.00	12.0%	5.1%
QCOM	$62.73	$70.34	$0.00	12.1%	5.1%
VIAB	$63.91	$68.70	$0.00	7.5%	5.1%
UIS	$22.03	$23.05	$0.00	4.6%	5.1%
NHTC	$12.44	$12.50	$0.00	0.5%	5.1%
Totals				7.4%	5.1%

Summary

3 of the 4 run off portfolios are doing better than replacements.  Guessing on dividends:

• May 12.3% to 11.0%
• August: -0.5% to +4.8%
• November: 14.5% to 0.7%
• February: 10% to 7.4%

So overall 12.3% better over 4 portfolios which is about 3 points better per porfolio if I had NOT sold.  Again, "Step Away From The Batter".