Pretty funny. Today is Pi day, being 3/14. But this year, as you can see from the factoid to the left goes a few more decimals. at 9:26:53 it will have Pi to the first nine places. This is truly a once in a lifetime moment. Get ready to pop the champagne corks.
The second funny thing about this is that it may actually matter to us. My son is a senior in high school and we're waiting on pins and needles on hearing back on his college applications. He has applied to be in the Physics program at MIT, Case Western, Northwestern, Carnegie Mellon, Vanderbilt & Boston U. The first two, sent him a note yesterday saying they would be sending out their acceptance letters (email) today at 9:26:53.
Overview
I mentioned yesterday morning the the markets were going around like a drunken sailor and that continued yesterday. I show the following YTD results:
| 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 | 0.80% | 1.17% | 98.74% | 99.30% |
So the R3K is up 0.80% and MFI Index is up 1.17% on Pi day for the year. Here are my results:
- Overall: 4.86%
- MFI Select: 1.66%
- MFI Formula: 5.59%
The interesting thing about MFI formula is that result is with only two of four tranches active. So it is literally "one arm tied behind my back". As 1/2 the money is up 0% and the other half (the invested half) is up 11%.
MFI Select
Speaking of drunken sailors, look at the staggering of the value of this portfolio month by month assuming $100,000 initial investment spread over four tranches:
| Date | Differential | MFI Value | R3K Value |
| -2.20% | 99,765 | 101,965 | |
| -1.78% | 102,798 | 104,575 | |
| -2.26% | 102,594 | 104,856 | |
| -2.23% | 102,881 | 105,114 | |
| -0.43% | 106,804 | 107,234 | |
| 2.00% | 110,423 | 108,423 | |
| 4.75% | 115,831 | 111,085 | |
| 4.29% | 114,888 | 110,597 | |
| 6.91% | 124,799 | 117,889 | |
| 10.46% | 124,536 | 114,079 | |
| 19.67% | 138,655 | 118,990 | |
| 19.75% | 143,514 | 123,764 | |
| 23.70% | 150,105 | 126,405 | |
| 26.63% | 157,138 | 130,503 | |
| 24.70% | 150,619 | 125,918 | |
| 25.66% | 158,116 | 132,458 | |
| 30.38% | 162,991 | 132,616 | |
| 29.65% | 162,428 | 132,779 | |
| 31.44% | 167,001 | 135,559 | |
| 39.23% | 177,971 | 138,740 | |
| 31.13% | 167,054 | 135,922 | |
| 35.90% | 177,792 | 141,892 | |
| 29.38% | 168,321 | 138,944 | |
| 26.14% | 168,810 | 142,666 | |
| 30.22% | 176,420 | 146,198 | |
| 28.17% | 174,306 | 146,140 | |
| 20.63% | 162,833 | 142,201 | |
| 25.15% | 175,476 | 150,324 | |
| Current | 29.66% | 176,983 | 147,320 |
So I started the year at $174,306. Dropped to 162,833. But have bounced back to 176,983.
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| AVG | $19.57 | $22.52 | $0.00 | 15.1% | 11.3% |
| CA | $29.54 | $31.39 | $1.00 | 9.6% | 11.3% |
| $22.79 | $27.94 | $0.57 | 25.1% | 11.3% | |
| NSR | $25.82 | $22.26 | $0.00 | -13.8% | 11.3% |
| $28.78 | $27.24 | $0.70 | -2.9% | 11.3% | |
| Totals | 6.6% | 11.3% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| $24.40 | $27.94 | $0.38 | 16.1% | 6.5% | |
| AGX | $36.71 | $32.40 | $0.70 | -9.8% | 6.5% |
| ITRN | $21.32 | $22.33 | $0.38 | 6.5% | 6.5% |
| $9.34 | $11.96 | $0.11 | 29.2% | 6.5% | |
| $58.25 | $45.48 | $0.14 | -21.7% | 6.5% | |
| Totals | 4.1% | 6.5% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| $64.80 | $56.69 | $0.42 | -11.9% | 2.2% | |
| IPCM | $38.45 | $45.74 | $0.00 | 19.0% | 2.2% |
| VIAB | $72.29 | $68.13 | $0.66 | -4.8% | 2.2% |
| NHTC | $12.19 | $16.69 | $0.03 | 37.2% | 2.2% |
| $4.40 | $4.44 | $0.00 | 0.9% | 2.2% | |
| Totals | 8.1% | 2.2% | |||
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| VEC | $28.00 | $32.03 | $0.00 | 14.4% | 3.6% |
| $62.73 | $68.64 | $0.42 | 10.1% | 3.6% | |
| VIAB | $63.91 | $68.13 | $0.33 | 7.1% | 3.6% |
| $22.03 | $23.20 | $0.00 | 5.3% | 3.6% | |
| NHTC | $12.44 | $16.69 | $0.02 | 34.3% | 3.6% |
| Totals | 14.2% | 3.6% |
You can see my two most recent tranches are really doing well. The May tranche seems likely to be a loser, which would take my losing streak to three. But overall, the approach is working as you can see from this table:
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 4.1% | 8.1% | 14.2% | 6.6% | 8.4% |
| Previous Tranche | 41.4% | 14.2% | 8.5% | 33.0% | 21.9% |
| Tranche -2 | 14.1% | 43.7% | 78.3% | - | 34.0% |
| MFI Overall Gain | 67.9% | 77.4% | 120.9% | 41.8% | 77.0% |
| Current Balance | 41,964 | 44,346 | 55,216 | 35,458 | 176,983 |
| R3K Current Tranche | 6.5% | 2.2% | 3.6% | 11.3% | 5.9% |
| R3K Overall Gain | 55.4% | 59.9% | 41.7% | 32.3% | 47.3% |
| R3K Balance | 38,851 | 39,971 | 35,428 | 33,069 | 147,320 |
| Annualized IRR | 22.2% | 27.9% | 45.5% | 20.7% | 26.9% |
Nothing wrong with a 26.9% annualized IRR. And the 30 point lead on R3K is starting to look like real money.
MFI Formula
As a reminder, this is my second approach to MFI that I started last September. While MFI select allows me to pick the stocks, and frankly I pick from my top 200 rather than the official list; MFI Formula is purely a formula approach, using stocks from official 50 over 100m list. It has really done well, which is what my back testing predicted.
| 10/1/2014 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BAH | $23.52 | $28.54 | $0.24 | 22.3% | 6.0% |
| $45.55 | $48.04 | $3.22 | 12.5% | 6.0% | |
| CA | $27.87 | $31.39 | $0.50 | 14.4% | 6.0% |
| $41.70 | $40.70 | $0.69 | -0.8% | 6.0% | |
| $44.56 | $55.74 | $0.70 | 26.6% | 6.0% | |
| Totals | 15.0% | 6.0% | |||
| 12/31/14 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CA | $30.83 | $31.39 | $0.25 | 2.6% | -0.3% |
| $28.36 | $27.94 | $0.19 | -0.8% | -0.3% | |
| $34.81 | $52.28 | $0.17 | 50.7% | -0.3% | |
| $34.21 | $40.70 | $0.36 | 20.0% | -0.3% | |
| IQNT | $19.87 | $15.49 | $0.15 | -21.3% | -0.3% |
| Totals | 10.2% | -0.3% |
As my readers know, there are often only 10 or 11 stocks that meet my formula criteria, so I will get repeating of stocks between tranches. I believe this is important for the method to work, but it does certainly have the potential to increase volatility. GME and CA are both in first two tranches. They are up about 11% in aggregate in second tranche. The three stocks I would have had to pick from if duplicates had not been allowed were COH (up 9.8%), PBI (down 9%) and KING (up 2%). Another repeat was NUS, it is up 267%, but sadly I didn't randomize them.
I will be adding a third tranche at the end of the month. I guess that will be March 30th (a Friday).
Other News
My UCO/Covered Call approach is working pretty poorly. While the covered calls help soften things, they have not (yet) been enough to offset the decline in price of oil. I will stay with it through the summer.
Here is an illustrative table of how it has performed:
| Type | Date | Shares | Purchase | Current | Cost | Value | Gain/Loss |
| Stock | 3,000 | $8.69 | $6.86 | 26,070 | 20,580 | (5,490) | |
| Stock | 3,000 | $8.34 | $6.86 | 25,020 | 20,580 | (4,440) | |
| Stock | 3,000 | $7.69 | $6.86 | 23,070 | 20,580 | (2,490) | |
| Sold Call | 3,000 | $0.20 | 600 | 600 | |||
| Sold Call | 3,000 | $0.25 | 750 | 750 | |||
| Sold Call | 3,000 | $0.45 | 1,350 | 1,350 | |||
| Sold Call | 3,000 | $0.40 | 1,200 | 1,200 |
While the share counts are illustrative, my readers can rest assured this is an expirement and actual dollars at stake are relatively small.
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2 comments:
"Pi day" and I think some people looking for trending in stock prices and such, shows an interesting property of humans.
The ability to notice the patterns that they would like to see and reject data that contradict that pattern/assumption. As in the year is actual 2015, not 15.
Chris - your comment is spot on. Humans love to look for patterns and often find them when they don't exist.
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