Monthly Tracking Portfolio - 4/25/14

Monthly Tracking Portfolio Update

Another month has zipped by. As my faithful readers know, I have been tracking the Magic Formula Stocks as described by Joel Greenblatt in The Little Book That Beats the Stock Market since January 2006.  Every month I take the top 50 stocks over $100m market cap from his website and track how that portfolio of stocks fares versus the Russell 3000 for the next 12 months.  It has been an uphill struggle as the tracking portfolios have under-performed, driven in part by Chinese reverse merger fiascos, for-profit education stocks and home health care stocks all being proverbial albatrosses.

Onward

 Fearless readers will recall we had a 29 month "losing streak"..  Then we had a 13 month winning streak. This month, we had our second straight loss.  Too many bad stocks (WTW, ESI, APOL, PFMT etc). Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
EBIX	15.84	29.77	88.0%	12.12	635
USNA	78.88	128.29	62.6%	63.22	1,104
AAPL	80.18	130.28	62.5%	81.79	489,273
KRFT	54.33	87.57	61.2%	53.33	33,919
CRUS	21.63	33.77	56.1%	16.80	1,284
IQNT	12.89	19.31	49.8%	10.06	456
XLS	16.87	24.61	45.9%	14.86	3,559
CHE	85.26	123.62	45.0%	80.94	1,542
PETS	12.28	17.35	41.2%	12.07	264
NOC	116.58	161.78	38.8%	117.50	25,625
BAH	21.38	29.01	35.7%	20.65	3,258
DLX	51.54	67.37	30.7%	51.46	2,650
CSCO	22.33	28.82	29.1%	22.43	121,106
DNB	102.46	131.86	28.7%	101.23	3,991
DHX	6.96	8.87	27.4%	6.73	388
SPOK	16.75	20.91	24.8%	12.93	375
ATVI	19.26	23.94	24.3%	17.73	13,772
STRA	43.08	53.40	24.0%	41.52	471
TTWO	20.36	25.08	23.2%	18.45	2,119
MSFT	38.86	47.87	23.2%	38.51	329,244
CTSH	48.73	59.73	22.6%	41.51	14,932
AGX	26.58	32.57	22.5%	26.09	388
CPLA	54.49	66.65	22.3%	52.89	710
RTN	92.64	108.35	17.0%	89.17	29,965
QCOR	81.23	93.60	15.2%	58.89	4,949
BKE	42.00	47.70	13.6%	41.96	2,169
CA	28.96	32.24	11.3%	25.25	13,548
NATR	12.03	13.01	8.1%	11.88	226
SWHC	14.03	15.01	7.0%	9.03	784
GME	38.09	40.71	6.9%	31.69	4,636
NSR	27.58	27.92	1.2%	20.32	1,709
KING	16.81	16.76	-0.3%	10.68	5,861
BWC	33.37	32.32	-3.2%	26.58	3,764
EGL	43.46	41.64	-4.2%	29.36	752
RGR	60.07	56.18	-6.5%	33.60	1,199
RPXC	16.62	15.03	-9.6%	11.94	931
PDLI	7.82	7.02	-10.2%	6.52	1,429
COH	48.10	42.65	-11.3%	32.72	13,878
MYGN	38.82	33.59	-13.5%	31.56	3,334
BCOR	18.52	13.94	-24.7%	12.61	803
SPRT	2.42	1.82	-24.8%	1.48	143
TZOO	17.55	12.89	-26.6%	8.45	264
HLF	57.83	41.10	-28.9%	27.60	5,822
NUS	85.30	58.44	-31.5%	38.12	5,223
APOL	27.84	17.51	-37.1%	16.58	3,116
LQDT	17.16	9.43	-45.0%	7.32	560
WTW	20.51	8.25	-59.8%	6.71	1,187
PFMT	8.55	3.22	-62.3%	3.08	417
PTIE	5.70	2.10	-63.2%	1.61	262
ESI	27.06	6.13	-77.3%	3.66	645

I have mentioned that a "Dogs of MFI" approach has shown some promise.  PFMT, WTW, LQDT and APOL are still on the list.  It would take some cahones to buy any of those - but I guess that is why they are called dogs. I did find another site that has been tracking since 2006 this week.  It uses a different approach, just 5 stocks picked randomly every quarter. They have had better results than me (TrackJGreenblatt's Stock Picks). I found it very interesting and would encourage people to take a looksee.

This month we ended up just 8.6% versus 15.8%.  Not very good - explains why my May tranche is also trailing. It is noteworthy that the six newest open portfolios are winning.

Here is a listing of every portfolio I have tracked:

Date	MFI	R3K	Lead
1/6/2006	16.0%	10.9%	1
2/17/2006	21.2%	14.6%	1
3/29/2006	13.0%	9.6%	1
4/7/2006	10.3%	12.1%	0
5/12/2006	20.4%	18.6%	1
5/31/2006	29.2%	23.3%	1
6/30/2006	22.4%	20.0%	1
7/31/2006	19.7%	17.3%	1
8/31/2006	13.0%	13.3%	0
9/28/2006	12.7%	14.6%	0
10/27/2006	10.3%	12.0%	0
11/29/2006	-0.3%	4.8%	0
12/28/2006	-6.9%	3.4%	0
1/26/2007	-10.2%	-6.6%	0
2/27/2007	-3.7%	-1.0%	0
3/26/2007	-9.8%	-5.5%	0
4/27/2007	-10.9%	-5.0%	0
5/29/2007	-11.5%	-6.3%	0
7/3/2007	-30.0%	-15.6%	0
7/30/2007	-19.9%	-11.5%	0
8/30/2007	-12.5%	-8.7%	0
9/27/2007	-19.0%	-18.2%	0
11/2/2007	-40.4%	-34.3%	0
11/28/2007	-40.1%	-38.3%	0
12/28/2007	-36.3%	-40.0%	1
1/25/2008	-36.4%	-35.9%	0
2/26/2008	-51.7%	-41.5%	0
3/24/2008	-40.9%	-36.8%	0
4/25/2008	-25.6%	-31.0%	1
5/28/2008	-22.2%	-33.6%	1
7/2/2008	-11.7%	-25.3%	1
7/29/2008	-10.5%	-20.9%	1
8/29/2008	-13.8%	-17.9%	1
9/26/2008	-4.3%	-10.0%	1
10/31/2008	18.7%	13.9%	1
11/26/2008	50.9%	27.7%	1
12/26/2008	48.9%	32.3%	1
1/23/2009	59.3%	36.4%	1
2/27/2009	92.8%	55.6%	1
3/27/2009	85.8%	48.1%	1
4/24/2009	69.7%	45.8%	1
5/29/2009	31.8%	22.8%	1
6/29/2009	21.3%	24.0%	0
7/29/2009	19.5%	15.9%	1
8/28/2009	7.4%	8.8%	0
9/25/2009	12.6%	12.4%	1
10/30/2009	22.7%	18.3%	1
11/27/2009	24.3%	13.6%	1
12/31/2009	23.7%	18.1%	1
1/22/2010	19.0%	20.6%	0
2/26/2010	18.6%	23.6%	0
3/25/2010	10.0%	15.4%	0
4/23/2010	7.1%	11.4%	0
5/28/2010	19.3%	25.4%	0
6/29/2010	16.7%	25.7%	0
7/29/2010	5.4%	20.1%	0
9/2/2010	7.3%	10.1%	0
9/24/2010	-4.3%	0.3%	0
10/29/2010	-2.9%	10.4%	0
11/26/2010	-8.5%	1.4%	0
1/3/2011	-11.4%	0.1%	0
1/28/2011	-7.6%	4.9%	0
2/25/2011	-5.5%	5.0%	0
3/24/2011	-4.4%	7.4%	0
4/21/2011	-16.0%	3.2%	0
5/27/2011	-12.0%	-0.4%	0
6/24/2011	-9.5%	5.0%	0
7/29/2011	-4.3%	8.1%	0
8/26/2011	12.0%	21.6%	0
9/30/2011	23.5%	29.6%	0
10/28/2011	0.4%	11.5%	0
11/25/2011	13.9%	24.0%	0
12/29/2011	9.9%	15.9%	0
1/27/2012	7.4%	16.6%	0
2/24/2012	7.8%	13.3%	0
3/23/2012	9.1%	15.2%	0
4/27/2012	10.5%	15.3%	0
5/25/2012	26.5%	27.5%	0
6/22/2012	26.1%	24.6%	1
7/27/2012	30.4%	25.7%	1
8/24/2012	26.0%	19.8%	1
9/28/2012	39.3%	22.1%	1
10/26/2012	48.3%	28.9%	1
11/23/2012	45.7%	32.1%	1
12/31/2012	52.3%	33.0%	1
1/25/2013	39.5%	22.0%	1
2/22/2013	46.5%	26.4%	1
3/28/2013	40.1%	21.2%	1
4/26/2013	35.0%	20.5%	1
5/24/2013	20.4%	19.2%	1
6/28/2013	26.9%	24.1%	1
7/29/2013	17.8%	19.0%	0
8/30/2013	17.5%	24.6%	0
9/27/2013	12.9%	17.7%	0
10/25/2013	11.8%	15.4%	0
11/29/2013	12.3%	15.6%	0
12/31/2013	12.7%	11.9%	1
1/31/2014	14.2%	13.0%	1
2/28/2014	15.4%	13.9%	1
3/28/2014	6.1%	12.3%	0
4/25/2014	8.6%	15.8%	0
5/30/2014	9.6%	12.2%	0
6/27/2014	5.3%	9.6%	0
7/25/2014	8.4%	9.1%	0
8/29/2014	6.6%	7.2%	0
9/26/2014	13.9%	8.8%	1
10/31/2014	12.2%	6.6%	1
11/28/2014	6.9%	4.0%	1
12/31/2014	5.5%	4.1%	1
1/30/2015	8.5%	7.0%	1
2/27/2015	1.7%	1.3%	1
3/27/2015	4.9%	2.7%	1
Average	10.1%	9.5%	0

Subsets

I also have tracked 2 subsets of the larger portfolios:  (1) dividend stocks (those with a yield per Yahoo of at least 2.6%) and (2) new stocks (those new to the tracking portfolios in past 12 months.  I am going to try to add a third one , which I call "dogs".  It is like the dogs of the Dow in that you take the worst five performing stocks from the prior year that renew or all those that dropped more that 29%. The dividend portfolio was solid, up about 22.6%.  The new portfolio sucked, down 26.6% (just a single stock - TZOO).  The Dogs approach was decent, up 18.4% Finally, I like to track cash as it is more "honest" than percentages as if you go up by 25% and then down by 25%, that is a different result than up by 5% then down by 5%.  So I track what you would have today if you had spread $100,000 over the first twelve portfolios evenly.

Category	Value
Total	195,956
Total Russell 3K	200,043
New	210,094
Dogs	279,337
Dividend	416,104