Saturday, February 07, 2015

Weekend Update - More Snow Predicte

Weekend Update

I remember now.  This is usually the time of year I start getting tired of winter.  Supposed to get a couple more inches today and then another big dump on Monday. Frankly, not sure where we will b putting it.  That will be 30+ inches over the past two weeks for us, and even more (probably 40ish) for eastern part of state. They are actually starting to have a shortage of road salt.

I had a strong week in the markets.  I was up 3.7% and am now just a hair under break-even.  I am down 6 basis points, R3K is up 26 basis points, MFI Index is down 1.97% (not very good), my MFI Select is down 5.4% (even worse) and my MFI Formula is up 3.3%.

So I think we can say that MFI is struggling right now. Going into the week, my 12 tracking portfolios were up an average of 1.1% versus the benchmark being up 2.5%.  At the end of the week, the 12 portfolios were up 4.0% versus 5.6% overall - so the gap remained about the same overall.

MFI Select

Gad, down 5.4% on the year. That seems pretty depressing.  It does seem like it has been a run of bad earnings reports:



Wow, sucks to put them all side-by-side like that. But that is the nature of investing.  You do get negative surprises from time to time.  A key is to figure out when those negative surprises are opportunities.  I did buy more VIAB on their recent dip.


5/6/2014 Start Current Dividend Pct Gain R3K Gain
AVG $19.57 $20.00 $0.00 2.2% 10.7%
CA $29.54 $32.03 $0.75 11.0% 10.7%
CSCO $22.79 $27.24 $0.57 22.1% 10.7%
NSR $25.82 $24.78 $0.00 -4.0% 10.7%
RCII $28.78 $29.54 $0.70 5.1% 10.7%
Totals 7.3% 10.7%
8/15/2014 Start Current Dividend Pct Gain R3K Gain
CSCO $24.40 $27.24 $0.38 13.2% 6.0%
AGX $36.71 $32.35 $0.70 -10.0% 6.0%
ITRN $21.32 $21.68 $0.38 3.5% 6.0%
BRCD $9.34 $11.88 $0.04 27.6% 6.0%
CBI $58.25 $36.26 $0.14 -37.5% 6.0%
Totals -0.6% 6.0%
11/15/2014 Start Current Dividend Pct Gain R3K Gain
FLR $64.80 $55.08 $0.21 -14.7% 1.6%
IPCM $38.45 $41.55 $0.00 8.1% 1.6%
VIAB $72.29 $67.07 $0.33 -6.8% 1.6%
NHTC $12.19 $10.85 $0.01 -10.9% 1.6%
AWRE $4.40 $4.94 $0.00 12.3% 1.6%
Totals -2.4% 1.6%
2/1/2015 Start Current Dividend Pct Gain R3K Gain
VEC $28.00 $28.58 $0.00 2.1% 3.1%
QCOM $62.73 $66.35 $0.00 5.8% 3.1%
VIAB $63.91 $67.07 $0.00 4.9% 3.1%
UIS $22.03 $23.17 $0.00 5.2% 3.1%
NHTC $12.44 $10.85 $0.00 -12.8% 3.1%
Totals 1.0% 3.1%
Category/Tranche August November February May Total
Initial Investment      25,000       25,000     25,000      25,000    100,000
Current Tranche -0.6% -2.4% 1.0% 7.3% 0.9%
Previous Tranche 41.4% 14.2% 8.5% 33.0% 21.7%
Tranche -2 14.1% 43.7% 78.3%             -   34.0%
MFI Overall Gain 60.3% 60.2% 95.3% 42.7% 64.6%
Current Balance      40,065       40,050     48,830      35,666    164,612
R3K Current Tranche 6.0% 1.6% 3.1% 10.7% 5.3%
R3K Overall Gain 54.6% 59.0% 41.0% 31.6% 46.5%
R3K Balance      38,645       39,758     35,238      32,894    146,536
Annualized IRR 20.9% 23.5% 39.4% 22.4% 25.8%

You look at these tables, and you have to admit a 25.8% IRR since the reboot is strong.  But you can see my overall gain (64.6%) is starting to narrow versus R3K (46.5%).  The sad part is all four of my open tranches are trailing and the two most recently closed lost. So I am on a losing streak.

MFI Formula

Recall the mantra of this portfolio - a simple formula can beat a simple formula used by an expert. Not that I am a expert, but those words warn that meddling can be counter-productive.  So in the formula, I identify stocks from official list using a formula (over $600m market cap and a dividend over 2.4%) and then I randomly pick 5 stocks - even if they duplicate with prior tranches.  I think these points are important as a stock that has dropped a bunch in a quarter may be even a better buy for the next tranche - and not allowing it to be picked could bias results down.

10/1/2014 Stocks Start Current Dividend Pct Gain R3K Gain
BAH $23.52 $28.90 $0.24 23.9% 5.5%
BKE $45.55 $49.70 $3.22 16.2% 5.5%
CA $27.87 $32.03 $0.25 15.8% 5.5%
GME $41.70 $36.76 $0.33 -11.1% 5.5%
NUS $44.56 $52.76 $0.35 19.2% 5.5%
Totals 12.8% 5.5%
12/31/14 Stocks Start Current Dividend Pct Gain R3K Gain
CA $30.83 $32.03 $0.00 3.9% -0.9%
CSCO $28.36 $27.24 $0.19 -3.3% -0.9%
RGR $34.81 $41.83 $0.00 20.2% -0.9%
GME $34.21 $36.76 $0.00 7.5% -0.9%
IQNT $19.87 $17.44 $0.00 -12.2% -0.9%
Totals 3.2% -0.9%
Wow, look at that first tranche. A 7 point lead as 4 of 5 stocks are kicking butt.  Really helped by strong NUS earnings (up 13% in one day). Many readers here said they would not have touched NUS, I can't disagree and that is why I hold my nose and use the formula.  A sharp eyed reader may note that in the 12/31/14 tranche that R3K is down 0.9% and I had stated above that R3K is up for 2015 by 26 basis points. I marked R3K at the moment I bought my 5 stocks, not at the end of the day. R3K dropped significantly (about one percent) on 12/31.

Category/Tranche October January April July Total
Initial Investment    249,820     249,939   250,000    250,000      999,759
Current Tranche 12.8% 3.2% 4.0%
Previous Tranche 0.0% 0.0% 0.0% 0.0% 0.0%
Tranche -2 0.0%              -              -               -   0.0%
MFI Overall Gain 12.8% 3.2% 0.0% 0.0% 4.0%
Current Balance    281,790     257,937   250,000    250,000   1,039,727
R3K Current Tranche 5.5% -0.9% 0.0% 0.0% 1.2%
R3K Overall Gain 5.5% -0.9% 0.0% 0.0% 1.2%
R3K Balance    263,513     247,757   250,000    250,000   1,011,269
Annualized IRR 40.1% 35.0% 0.0% 0.0% 39.7%
Date Differential Value
10/1/2014 0.00%   1,000,000
11/1/2014 1.63%   1,022,880
12/1/2014 0.30%   1,013,750
1/1/2015 -0.33%   1,006,644
2/1/2015 1.67%   1,012,806
Current 2.85%   1,039,727

Miscellaneous

Actually a bunch of my discretionary stocks had a great week.

Stock Start End Change
BAC-WTA           5.95           6.06 1.8%
HIG-WT         30.96         32.13 3.8%
RIG         16.30         18.51 13.6%
GNW           6.98           7.76 11.2%
CSIQ         20.39         25.00 22.6%
CSIQ is capped at $25 as I sold calls (2/20 at $25 for $1.10).  Ironic that the one stock I sold calls on is the one doing the best!

Have a great weekend everyone/

1 comment:

John Carney said...

Marsh,

It is way too early but your MFI formula is up 7.9% and mine is up 5.7%. I only have 6 of your stocks so we have a basket of 18 stocks picked by formula that is killing the index. It has been helped with NUS. Mine IRR is 20 points above the index.