Well, i am in a good mood this Easter morning. Drove back home last night. Saw that Wisconsin beat Kentucky. Boom! I was happy. I have my Pandora stream going on in the background and good cup of coffee. Speaking of good cups of coffee, I did see a new gizmo coming out in May/June on the coffee front. Not only does it grind the beans for you and deliver a fresh cuppa java, but it also has an app you can put on your smartphone. This can be used to commence the brewing cycle! I had seen the hype about the Internet of Things, but now I am seeing the power! (Smarter Coffee: A Wi-Fi Enabled Smart Home Brewer
). You can thank me later.
Just a Few Statistics
As we head into 2nd quarter, here are a few statistics. First a table showing the Benchmark and the MFI Index:
| 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 | 1.75% | 1.31% | 99.66% | 99.44% |
As you can see, no one is really setting the world afire. Stunning over 2014 and 2015 how close the index and the R3K have been. I also track GARIX, which is a mutual fund run by Greenblatt and Gotham Funds (Bruce Wayne invests there). It uses MFI, but is a long/short fund. It is down an unimpressive 1.58% this year.
My portfolio has done very well this year (knock on nearby wood). I am up 5.4%. My MFI Select is up 2.9%. My MFI Formula is up 6.4%. Now that is an eye-popping number, when you recall at the start of the year that only 50% of that was invested. The other half was cash. For you non-Mathematicians out there, that means the stock component is up over 12%. Magic Formula indeed.
On the Magic Formula, recall I randomly pick my 5 stocks. You might think that so far I have just been lucky... and perhaps I have. But it wasn't Mr Random that made me lucky. Here is my October tranche:
| 10/1/2014 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BAH | $23.52 | $28.71 | $0.24 | 23.1% | 7.0% |
| $45.55 | $50.98 | $3.22 | 19.0% | 7.0% | |
| CA | $27.87 | $31.93 | $0.50 | 16.3% | 7.0% |
| $41.70 | $38.20 | $0.69 | -6.7% | 7.0% | |
| $44.56 | $61.12 | $0.70 | 38.7% | 7.0% | |
| Totals | 18.1% | 7.0% |
The 5 stocks I didn't pick are up 13.4% before dividends. Call it 15% with dividends. Here is Dec 31st tranche:
| 12/31/14 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CA | $30.83 | $31.93 | $0.25 | 4.4% | 0.6% |
| $28.36 | $27.13 | $0.40 | -2.9% | 0.6% | |
| $34.81 | $49.54 | $0.17 | 42.8% | 0.6% | |
| $34.21 | $38.20 | $0.36 | 12.7% | 0.6% | |
| IQNT | $19.87 | $16.29 | $0.15 | -17.3% | 0.6% |
| Totals | 7.9% | 0.6% |
The 5 stocks I didn't pick are up 13.2%, again before dividends. So I have not drawn the "lucky" stocks. Rather they are all doing well. Of course the March 31st is off to a rocket start:
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| $31.99 | $32.15 | $0.00 | 0.5% | -0.7% | |
| $37.69 | $38.20 | $0.00 | 1.4% | -0.7% | |
| KING | $15.85 | $16.39 | $0.00 | 3.4% | -0.7% |
| NSU | $3.43 | $3.44 | $0.00 | 0.3% | -0.7% |
| PPC | $22.65 | $24.44 | $0.00 | 7.9% | -0.7% |
| Totals | 2.7% | -0.7% |
Early days.
UCO Trade
I have taken a smaller amount and have been trading UCO, which moves 2x the price of oil. It is exceedingly volatile. I figured out the other day that 41% of the days I have owned it, UCO has moved either up or down by more than 5%. The concept was that while it was moving around a lot day to day, overall it is staying within a range. Thus one could profit by selling calls, which have relatively high premiums. So far, it hasn't worked all that well for me. But I will say, with the correct entry prices, I could easily be up 20% as well.
| Type | Date | Purchase | Current | Cost | Value | Gain/Loss | Strike | X Date | Basis |
| Stock | 2/19 | $8.69 | $6.00 | 26,070 | 18,000 | (8,070) | $7.39 | ||
| Call | 2/19 | $0.20 | 600 | 600 | 9.50 | 2/27 | |||
| Call | 3/2 | $0.25 | 750 | 750 | 9.00 | 3/13 | |||
| Call | 3/19 | $0.85 | 2,550 | 2,550 | 6.00 | 4/17 | |||
| Stock | 3/3 | $8.34 | $6.50 | 25,020 | 19,500 | (5,520) | $7.39 | ||
| Call | 3/4 | $0.45 | 1,350 | 1,350 | 9.00 | 3/20 | |||
| Call | 3/23 | $0.50 | 1,500 | 1,500 | 6.50 | 4/2 | |||
| Stock | 3/11 | $7.69 | $7.35 | 23,070 | 22,050 | (1,020) | $6.79 | ||
| Call | 3/11 | $0.40 | 1,200 | 1,200 | 8.00 | 3/27 | |||
| Call | 3/30 | $0.50 | 1,500 | 1,500 | 8.00 | 5/15 |
So you can see the three tranches here. The first was started on 2/19. Initial cost of $8.69 (way too high) has been reduced to $7.39 with the sale of calls. Unfortunately, the last call I sold has a strike price of $6.00 that expires 4/17. The second tranche started at $8.34. My basis is down to $7.39. And I was called out last week at $6.50. So that one is done at a 89 cent loss. The third one, and best one, has the basis down to $6.79 while UCO is at $7.35. I do have May calls sold at $8.00. So my max gain if called out is $1.21.
Next MFI Tranche
Now that my most recent Formula tranche is up and running, I can look forward to my May 6th tranche. First, here is the current tranche, with the comeback of NSR it may actually have a shot at winning:
| Start | Current | Dividend | Pct Gain | R3K Gain | |
| AVG | $19.57 | $21.71 | $0.00 | 10.9% | 12.3% |
| CA | $29.54 | $31.93 | $1.00 | 11.5% | 12.3% |
| $22.79 | $27.13 | $0.57 | 21.6% | 12.3% | |
| NSR | $25.82 | 26.05 | $0.00 | 0.9% | 12.3% |
| $28.78 | $26.99 | $0.94 | -3.0% | 12.3% | |
| Totals | 8.4% | 12.3% |
Ok, still a bit of a long shot. I did make a list of stocks I am going to check out: ACHI, ANIK, ENTA, HPQ, IQNT, MNDO, SNDK, WILN, CTCM, SJT, GILD, CRT and CBI. 13 names there, should be able to get 5 winners! I may also consider one "dog", a stock still on the list from a year ago that has fallen over 30%.
That would require some serious nose holding.
| Stock | Initial Price | End Price | Percent Change |
| 20.51 | 7.20 | -65% | |
| PFMT | 8.55 | 3.40 | -60% |
| TZOO | 17.55 | 9.39 | -46% |
| LQDT | 17.16 | 9.54 | -44% |
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