"It's the most wonderful time of the year". Certainly pertains to the holiday season. It also seems to be pertaining to the financial markets this past week. Very strong.
Reading an interesting book over the holidays, "You've Been Publicly Shamed". It talks about the power of social media, it can do good in forcing businesses to be more socially aware; but it can also ruin careers. Hopefully, I am not doing anything here that could cause offense - but if a "joke" came out racist, even on a blog like this read by fifty people a day; it might have repercussions. The example given was a PR lady with a Twitter account (170 followers). She tweeted a remark that was at best in very poor taste and at worst racist on her way to Africa at the airport. When she landed, she found her tweet went viral and she had lost her job. With that sort of down side potential, makes you wonder wither blogging/tweeting/posting is worth it.
Overview
It was, as I said, a tremendous week for my portfolio. I went into the week up 1.7% on the year versus the R3K being down 1.5%. I ended up the week up 6.6% while the index is up 70 basis points. Just everything went well. One interesting stock was REXI, a dividend stock I bought back in June at $8.02. I increased my shares at the start of December at $5.97. It then fell off the table, for no reason I could ascertain, to $3.65 at the end of last week. I kept thinking about buying even more shares, but it is pretty lightly traded and I was fearful that I didn't know something.
Yesterday, it popped about 30% to $4.70 on very, very high volume. This is a small company - just 98 million market cap. But they trade at 50% of book value and pay a 6.7% dividend. Leon Cooperman, a very smart man, owns 1.2 million shares (so about 5%). The pop yesterday validated to me that this is a great value - so I doubled down yesterday. Starting in 2016, it will join the stocks I show in my dividend portfolio and I plan to hold for at least a year.
MFI Select
Up 28.7% for the year, sometimes I have to pinch myself as it almost isn't believable. I mean, MFI in total has laid an egg this year - my Index is down 5%. Then GARIX is down 9%. And I have documented my tracking portfolio woes.
| 2/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VEC | $28.00 | $21.48 | $0.00 | -23.3% | 3.5% |
| QCOM | $62.73 | $49.55 | $1.86 | -18.0% | 3.5% |
| VIAB | $63.91 | $41.11 | $1.53 | -33.3% | 3.5% |
| UIS | $22.03 | $10.92 | $0.00 | -50.4% | 3.5% |
| NHTC | $12.44 | $45.89 | $0.05 | 269.3% | 3.5% |
| Totals | 28.8% | 3.5% | |||
| 5/6/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CBI | $50.38 | $40.48 | $0.14 | -19.4% | -1.6% |
| PSDV | $4.12 | $4.37 | $0.00 | 6.0% | -1.6% |
| TSRA | $38.94 | $31.88 | $0.60 | -16.6% | -1.6% |
| KORS | $62.24 | $40.86 | $0.00 | -34.4% | -1.6% |
| DEPO | $23.50 | $18.84 | $0.00 | -19.8% | -1.6% |
| Totals | -16.8% | -1.6% | |||
| 8/17/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VDSI | $18.66 | $17.61 | $0.00 | -5.6% | -2.2% |
| SALE | $9.34 | $10.36 | $0.00 | 10.9% | -2.2% |
| CSCO | $28.95 | $27.38 | $0.21 | -4.7% | -2.2% |
| TGNA | $25.30 | $25.93 | $0.28 | 3.6% | -2.2% |
| HSII | $20.14 | $28.14 | $0.13 | 40.4% | -2.2% |
| Totals | 8.9% | -2.2% | |||
| 11/15/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| LCI | $34.01 | $40.67 | - | 19.6% | 0.1% |
| SAVE | $34.48 | $43.33 | - | 25.7% | 0.1% |
| PPC | $18.98 | $22.49 | - | 18.5% | 0.1% |
| VEC | $23.60 | $21.48 | - | -9.0% | 0.1% |
| VNCE | $3.99 | $4.78 | - | 19.8% | 0.1% |
| Totals | 14.9% | 0.1% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 8.9% | 14.9% | 28.8% | -16.8% | 9.4% |
| Previous Tranche | 11.2% | 69.4% | 8.5% | 18.3% | 44.2% |
| Tranche -2 | 41.4% | 14.2% | 78.3% | 33.0% | 41.7% |
| Tranche -3 | 14.1% | 43.7% | 0.0% | 0.0% | 0.0% |
| MFI Overall Gain | 95.3% | 219.6% | 149.1% | 30.8% | 123.7% |
| Current Balance | 48,831 | 79,907 | 62,273 | 32,707 | 223,717 |
| R3K Current Tranche | -2.2% | 0.1% | 3.5% | -1.6% | 0.0% |
| R3K Overall Gain | 55.2% | 57.8% | 41.6% | 32.1% | 46.7% |
| R3K Balance | 38,811 | 39,459 | 35,400 | 33,014 | 146,683 |
| Annualized IRR | 22.0% | 45.3% | 37.0% | 10.7% | 31.1% |
I forgot to mention that PSDV also made a major 20% move during the week. Hard to notice in the bloodbath that is my May tranche, but it improved from -21.4% last week to -16.8% this week.
| 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 |
| 7/1/2015 | 62.69% | 211,437 | 148,743 |
| 8/1/2015 | 40.75% | 192,117 | 151,369 |
| 9/1/2015 | 36.41% | 178,603 | 142,195 |
| 10/1/2015 | 43.12% | 181,175 | 138,052 |
| 11/1/2015 | 69.02% | 217,959 | 148,936 |
| 12/1/2015 | 73.49% | 223,435 | 149,946 |
| Current | 77.03% | 223,717 | 146,683 |
Wow, I am at an all time high water mark on this monthly table. Recall, this table assumes I started my reboot with four tranches each at $25,000 starting August 2012. The $100,000 seed money is $223,717 now.
MFI Formula
For those who don't read my blog daily with their morning cuppa, I officially run to MFI portfolios. The first is my 4 "Select" tranches (shown above). I started that August 2012 and I pick whatever 5 stocks I feel like picking. and hold for a year. I run my own MFI screen, so I at times pick stocks not on official screen. Then I have my Formula approach, which I started 9/30/14 (though I back tested to 2006). These stocks are picked by formula and then a random number generator. The formula is simple:
- run official MFI screen top 50 stocks at $111m.
- Identify a subset of stocks from that list that have market cap > $600m and a dividend yield of 2.4% or higher.
- I can then remove one name from that list (it has been PDLI).
- Then randomly pick 5 names.
| 12/31/14 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CA | $30.83 | $28.97 | $1.00 | -2.8% | -0.4% |
| CSCO | $28.36 | $27.38 | $0.82 | -0.6% | -0.4% |
| RGR | $34.81 | $60.36 | $1.10 | 76.5% | -0.4% |
| GME | $34.21 | $28.37 | $1.44 | -12.9% | -0.4% |
| IQNT | $19.87 | $17.51 | $0.60 | -8.9% | -0.4% |
| Totals | 10.3% | -0.4% | |||
| 3/31/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| HRB | $31.99 | $33.33 | $0.60 | 6.1% | -1.7% |
| GME | $37.69 | $28.37 | $1.08 | -21.9% | -1.7% |
| KING | $15.85 | $17.65 | $0.00 | 11.3% | -1.7% |
| NSU | $3.43 | $2.76 | $0.08 | -17.2% | -1.7% |
| PPC | $22.65 | $22.49 | $0.00 | -0.7% | -1.7% |
| Totals | -4.5% | -1.7% | |||
| 7/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $46.45 | $30.67 | $0.46 | -33.0% | -1.6% |
| CA | $29.34 | $28.97 | $0.50 | 0.4% | -1.6% |
| MSFT | $44.42 | $55.67 | $0.67 | 26.8% | -1.6% |
| QCOM | $62.95 | $49.55 | $0.96 | -19.8% | -1.6% |
| VIAB | $64.75 | $41.11 | $0.80 | -35.3% | -1.6% |
| Totals | -12.1% | -1.6% | |||
| 10/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $36.83 | $30.67 | $0.23 | -16.1% | 6.6% |
| IQNT | $21.96 | $17.51 | $0.15 | -19.6% | 6.6% |
| QCOM | $53.45 | $49.55 | $0.48 | -6.4% | 6.6% |
| CSCO | $26.37 | $27.38 | $0.21 | 4.6% | 6.6% |
| CA | $27.30 | $28.97 | $0.25 | 7.0% | 6.6% |
| Totals | -6.1% | 6.6% |
As you can see from these four tables, this approach has struggled - more in line with the -5% I mentioned above for MFI index in 2015. I do have one tranche "retired" and it was a push. So I am not getting rich with this approach yet. But I shall be patient. The 12/31/14 tranche will be wound down next week. I will see the negative positions next Wednesday and sell the winners after the new year. It has been a good tranche. And do not give up hope on the other tranches, there is still time. I saw ML made QCOM one of top picks for 2016 and is targeting $72. That would help.
| 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 |
| 7/1/2015 | 4.82% | 106,423 | 101,604 |
| 8/1/2015 | 3.71% | 107,112 | 103,404 |
| 9/1/2015 | 4.38% | 101,523 | 97,139 |
| 10/1/2015 | 6.39% | 100,703 | 94,312 |
| 11/1/2015 | 2.93% | 104,835 | 101,907 |
| 12/1/2015 | -3.48% | 99,443 | 102,926 |
| Current | -3.72% | 96,974 | 100,695 |
MFI Index
I have maintained an MFI Index back to 2006. The index is the top 50 stocks > $100m at the start of each year and held for a year. I then reconstitute the 50 stocks 12/31 each year. I am sorry to state this approach has underperformed the benchmark. MFI is a streaky approach. It was really hurt a couple years by Chinese stocks that made the list (even though JG said in book to exclude foreign stocks) and also For Profit Education has been a serious drag.
| Annual | Inception to Date | |||
| Year | Russell | MFI | 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 | 0.72% | -5.29% | 98.66% | 92.96% |
Always, always, always remember I am just a guy with a computer and a spreadsheet. It is always possible I have made errors (or my draws from Yahoo Finance have had errors). But I do feel directionally these are a pretty good representation and since 2010 should be quite accurate as I made it ongoing then instead of rebuilding history. So the left two columns show year by year returns and then right two columns are cumulative. Kind of a push +98.7% versus +93%. I do feel this year was very similar to 2007. Hopefully that doesn't make next year like 2008!
MFI Micro
I have also started two other tranches (so I have 10 total) of MFI-ish stocks that are micro caps. A few are not on the "list" like PERI and MGIC. Again, I run my own screens. I have placed fewer dollars into these as frankly even for a retail investor like me, these stocks are pretty lightly traded. Not really sure where I am going with these tranches, just bought as stocks seemed so cheap. I will hold each tranche for a year and then decide if I want to stick with Micro approach. They are much more volatile.
| 8/28/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VNCE | $8.50 | $4.78 | $0.00 | -43.8% | 2.9% |
| ONE | $1.99 | $3.31 | $0.00 | 66.3% | 2.9% |
| TPUB | $11.60 | $9.71 | $0.18 | -14.8% | 2.9% |
| LQDT | $7.26 | $6.77 | $0.00 | -6.7% | 2.9% |
| PERI | $2.45 | $3.77 | $0.00 | 53.9% | 2.9% |
| Totals | 11.0% | 2.9% | |||
| 12/15/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MGIC | $5.38 | $5.57 | $0.00 | 3.5% | 0.2% |
| BSQR | $6.00 | $6.39 | $0.00 | 6.5% | 0.2% |
| SPCB | $4.52 | $4.82 | $0.00 | 6.6% | 0.2% |
| WLDN | $8.64 | $8.94 | $0.00 | 3.4% | 0.2% |
| MNDO | $2.58 | $2.52 | $0.00 | -2.4% | 0.2% |
| Totals | - | 3.5% | 0.2% |
Dividend & Warrants
Finally, I do own stocks/securities that I classify as dividend stocks and warrants. I do not track as thoroughly as MFI. This is because it is more onerous as I am continuously reinvesting dividends. So I just show each stock/warrant and how it has done in aggregate and movement during the past week. I will probably add a YTD feature for 2016. While I suppose we'd all like our stocks to go to infinity and beyond, my metric here is really an income stream. I am 56 and starting to think retirement. So I even have a couple fixed income holdings (JQC and NTC).
| Div and Warrants | Start | Current | Dividend | Pct Gain | Pct Gain Last Week |
| BAC-WTA | $6.04 | $6.02 | $0.00 | -0.3% | -1.8% |
| AOD | $8.08 | $7.73 | $1.65 | 16.0% | 13.6% |
| JQC | $7.82 | $7.77 | $0.05 | 0.0% | -0.6% |
| CSQ | $9.32 | $10.09 | $1.96 | 29.3% | 25.1% |
| NTC | $12.05 | $12.60 | $1.25 | 14.9% | 14.9% |
| TGONF | $10.24 | $9.46 | $1.19 | 4.0% | 7.0% |
| HIG-WT | $21.24 | $36.40 | $0.00 | 71.4% | 63.7% |
| O | $22.72 | $51.30 | $17.63 | 203.4% | 202.4% |
| OIBAX | $5.04 | $5.54 | $2.14 | 52.3% | 52.1% |
| SJT | $8.82 | $4.87 | $0.11 | -43.5% | -51.3% |
| Totals | 8.7% | 6.0% |
I think that is all she wrote. Have a great holiday everyone!
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