Monday, October 19, 2015

Worth The Weight?

well, well, well. I always talk about "The Dogs of MFI", stocks that are still on the list a year later, despite being down 30% or more. While over the entirety of my tracking, this has been a decent approach, evenly it has struggled as some stocks keep making lower lows.

But that poor portfolio got a serious boost today when the queen of day time TV, Oprah, took at 10% stake in WTW. That news, caused the stock to skyrocket 100% today. That'll help.

I do not have my detailed workbook with me right now, but I believe WTW is in the July 24th tracking portfolio at $4 a share. Today it closed at $13.92.  That is a 240% gain in three months. Boom! Of course, it may not hold. Today seemed very overdone.

But this does show why it is better to think about picking MFI at random rather than bringing in your biases.  I never wanted to buy WTW. Not at $40, not at $27 and not at $4. But that is where I am wrong, at some price - a stock will have value.  And if you catch it near the bottom (see my Anatomy of an MFI stock, or if you rebalance your portfolio) then you can catch these out sized gains.

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