Weekend Update - 6/6/15

Weekend Update

I have made it to another weekend. Today is obviously D-Day.  Someday I would like to visit to beaches of Normandy where the invasion took place. It must be a very powerful feeling to go there.  Yesterday was Senior Prom for my son. They button down the place pretty tightly here and take breathalyzers of everyone as they enter.

Last week was a surprisingly good week for me, seems like everything just right.  I am now beating the R3K by over 6 points on the year as I was up over 2 points on the week.  I am getting very close to buying my fourth and final tranche for the MFI Formula portfolio.  I will actually need to sell some positions in my discretionary picks to raise some cash.  I did look yesterday and suddenly there are a lot of stocks qualifying.  I counted 15 yesterday!

MFI Select

These tranches continue to be nothing short of outstanding.  I think we can state that for me, since August 2012, that MFI has been a resounding success.  My annual IRR on this portfolio is about 34% versus 18% for the R3K.  My August tranche has turned on the jets and is starting to pull away a bit, just like the May 2014 portfolio did the final 45 days.

8/15/2014	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$24.40	$28.58	$0.59	19.5%	9.0%
AGX	$36.71	$37.07	$0.70	2.9%	9.0%
ITRN	$21.32	$24.45	$0.71	18.0%	9.0%
BRCD	$9.34	$12.37	$0.11	33.6%	9.0%
CBI	$58.25	$55.87	$0.14	-3.8%	9.0%
Totals				14.0%	9.0%
11/15/2014	Start	Current	Dividend	Pct Gain	R3K Gain
FLR	$64.80	$55.64	$0.63	-13.2%	4.6%
IPCM	$38.45	$49.98	$0.00	30.0%	4.6%
VIAB	$72.29	$68.06	$0.66	-4.9%	4.6%
NHTC	$12.19	$32.88	$0.06	170.2%	4.6%
AWRE	$4.40	$4.24	$0.00	-3.6%	4.6%
Totals				35.7%	4.6%
2/1/2015	Start	Current	Dividend	Pct Gain	R3K Gain
VEC	$28.00	$25.06	$0.00	-10.5%	6.1%
QCOM	$62.73	$68.26	$0.90	10.2%	6.1%
VIAB	$63.91	$68.06	$0.33	7.0%	6.1%
UIS	$22.03	$20.67	$0.00	-6.2%	6.1%
NHTC	$12.44	$32.88	$0.05	164.7%	6.1%
Totals				33.1%	6.1%
5/6/2015	Start	Current	Dividend	Pct Gain	R3K Gain
CBI	$50.38	$55.87	$0.00	10.9%	0.8%
PSDV	$4.12	$3.93	$0.00	-4.7%	0.8%
TSRA	$38.94	$38.56	$0.20	-0.5%	0.8%
KORS	$62.24	$48.87	$0.00	-21.5%	0.8%
DEPO	$23.50	$21.89	$0.00	-6.9%	0.8%
Totals				-4.5%	0.8%

You can see that August now leads by about 5 points.  then while my newest tranche, May 2015 is trailing - it also closed a lot of ground this week (it was down 8.1 points last week).

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	14.0%	35.7%	33.1%	-4.5%	19.9%
Previous Tranche	41.4%	14.2%	8.5%	18.3%	19.3%
Tranche -2	14.1%	43.7%	78.3%	33.0%	42.3%
MFI Overall Gain	84.0%	122.7%	157.2%	50.2%	103.5%
Current Balance	45,990	55,684	64,306	37,550	203,530
R3K Current Tranche	9.0%	4.6%	6.1%	0.8%	5.1%
R3K Overall Gain	59.0%	63.6%	45.0%	35.3%	50.7%
R3K Balance	39,754	40,903	36,258	33,818	150,733
Annualized IRR	24.2%	36.8%	49.7%	21.5%	34.2%

Date	Differential	MFI Value	R3K Value
12/1/2012	-2.20%	99,765	101,965
1/1/2013	-1.78%	102,798	104,575
2/1/2013	-2.26%	102,594	104,856
3/1/2013	-2.23%	102,881	105,114
4/1/2013	-0.43%	106,804	107,234
5/1/2013	2.00%	110,423	108,423
6/1/2013	4.75%	115,831	111,085
7/1/2013	4.29%	114,888	110,597
8/1/2013	6.91%	124,799	117,889
9/1/2013	10.46%	124,536	114,079
10/1/2013	19.67%	138,655	118,990
11/1/2013	19.75%	143,514	123,764
12/1/2013	23.70%	150,105	126,405
1/1/2014	26.63%	157,138	130,503
2/1/2014	24.70%	150,619	125,918
3/1/2014	25.66%	158,116	132,458
4/1/2014	30.38%	162,991	132,616
5/1/2014	29.65%	162,428	132,779
6/1/2014	31.44%	167,001	135,559
7/1/2014	39.23%	177,971	138,740
8/1/2014	31.13%	167,054	135,922
9/1/2014	35.90%	177,792	141,892
10/1/2014	29.38%	168,321	138,944
11/1/2014	26.14%	168,810	142,666
12/1/2014	30.22%	176,420	146,198
1/1/2015	28.17%	174,306	146,140
2/1/2015	20.63%	162,833	142,201
3/1/2015	25.15%	175,476	150,324
4/1/2015	29.95%	178,565	148,612
5/1/2015	37.31%	186,655	149,348
6/1/2015	51.53%	202,897	151,371
Current	52.80%	203,530	150,733

So the month by month progression shows a solid lead, assuming 100,000 invested in this approach spread evenly over the four tranches.

MFI Formula

These guys were really helped by GME this past week, which is in all three tranches.  The September tranche was trailing after sub-par earnings from BKE and BAH, but has now bounced back into the lead:

10/1/2014 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
BAH	$23.52	$25.39	$0.24	9.0%	8.5%
BKE	$45.55	$46.16	$3.45	8.9%	8.5%
CA	$27.87	$29.67	$0.75	9.1%	8.5%
GME	$41.70	$44.14	$0.69	7.5%	8.5%
NUS	$44.56	$50.84	$1.05	16.4%	8.5%
Totals				10.2%	8.5%
12/31/14 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
CA	$30.83	$29.67	$0.50	-2.1%	2.0%
CSCO	$28.36	$28.58	$0.40	2.2%	2.0%
RGR	$34.81	$55.26	$0.49	60.1%	2.0%
GME	$34.21	$44.14	$0.36	30.1%	2.0%
IQNT	$19.87	$17.93	$0.30	-8.3%	2.0%
Totals				16.4%	2.0%
3/31/2015	Start	Current	Dividend	Pct Gain	R3K Gain
HRB	$31.99	$31.48	$0.00	-1.6%	0.7%
GME	$37.69	$44.14	$0.00	17.1%	0.7%
KING	$15.85	$15.02	$0.00	-5.2%	0.7%
NSU	$3.43	$4.20	$0.00	22.4%	0.7%
PPC	$22.65	$24.36	$0.00	7.5%	0.7%
Totals				8.1%	0.7%

It is gratifying for me to see the formula working so well.  You may ask if I have been "lucky" and I do think I have been so far.  The stocks Mr Random didn't pick have these results:

• September:  +10.9% + about 2% of dividends
• December:  basically flat with 1.5% of dividends
• March: down 1.6%

So I have truly been fortunate. If you rolled those three up, I think I would have a slight lead on R3K.  But nothing like what I am enjoying (a 5.8 point cushion).

Date	Differential	Value	R3K Value
10/1/2014	0.00%	100,000	100,000
11/1/2014	1.63%	102,288	100,658
12/1/2014	0.30%	101,375	101,075
1/1/2015	-0.33%	100,664	100,995
2/1/2015	1.67%	101,281	99,611
3/1/2015	3.62%	106,073	102,454
4/1/2015	5.09%	106,781	101,695
5/1/2015	5.78%	107,859	102,077
6/1/2015	5.08%	108,213	103,134
Current	5.85%	108,655	102,804

Discretionary Holdings

I did sell my ESI for a very satisfying 2 day gain of over 30%.  This week, I bought REXI and WILN. So far a mixed bag on their results.  But as I mentioned, I will need to sell some of my discretionary holdings (such as those two and CSIQ) in the upcoming weeks.