Well, the markets have certainly taken a dive the last couple of weeks. Down about 8% since 12/23. Merry Christmas! I am certainly tracking the drop. As I mentioned yesterday, I am down 5.4% this first week.
While it is tempting to run around with hair on fire, it is more useful (in my opinion), to take a longer term view. I am 56. I am still putting money into the markets on a net basis by a wide margin. So I will be getting stocks at cheaper prices.
In fact, in my dividend stocks that I reinvest in shares - I am still getting the same monthly dividend and getting quite a few more shares at the reinvestment. That doesn't seem worthy of hair on fire.
I had mentioned near the end of last year that 2015 felt a lot like 2007. So far 2016 is feeling like 2008. But while going through the 30 to 40% plunge in stocks in 2008 was stressful, I did get it all back. One key is not to be 100% invested - that way no margin calls, you have cash for living and you have cash if things get exceedingly cheap.
MFI Select
Speaking of history repeating itself, NHTC seems to be repeating NUS almost exactly 2 years ago. At that time, the Chinese gov't accused NUS of not following their rules. NUS dropped from $130 near the end of 2013 to $78 a couple months later. There are rumors of NHTC having similar charges and it has dropped 50% in the past month. I always knew this was a possibility. I read a hit piece on NHTC last Spring. But I decided to respect MFI and hold for the one year period. That has turned out to be a great move as I sold the first tranche at a 300% gain. Even with the drop, this tranche has NHTC up 88%. But the precipitous drop is very evident in my tables below:
| 2/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VEC | $28.00 | $20.78 | $0.00 | -25.8% | -3.0% |
| QCOM | $62.73 | $45.88 | $1.86 | -23.9% | -3.0% |
| VIAB | $63.91 | $40.98 | $1.53 | -33.5% | -3.0% |
| UIS | $22.03 | $9.76 | $0.00 | -55.7% | -3.0% |
| NHTC | $12.44 | $23.35 | $0.05 | 88.1% | -3.0% |
| Totals | -10.2% | -3.0% | |||
| 5/6/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CBI | $50.38 | $36.80 | $0.14 | -26.7% | -7.8% |
| PSDV | $4.12 | $3.96 | $0.00 | -4.0% | -7.8% |
| TSRA | $38.94 | $27.29 | $0.60 | -28.4% | -7.8% |
| KORS | $62.24 | $37.79 | $0.00 | -39.3% | -7.8% |
| DEPO | $23.50 | $15.44 | $0.00 | -34.3% | -7.8% |
| Totals | -26.5% | -7.8% | |||
| 8/17/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VDSI | $18.66 | $15.96 | $0.00 | -14.5% | -8.4% |
| SALE | $9.34 | $8.86 | $0.00 | -5.1% | -8.4% |
| CSCO | $28.95 | $24.78 | $0.42 | -13.0% | -8.4% |
| TGNA | $25.30 | $23.50 | $0.28 | -6.0% | -8.4% |
| HSII | $20.14 | $25.76 | $0.13 | 28.5% | -8.4% |
| Totals | -2.0% | -8.4% | |||
| 11/15/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| LCI | $34.01 | $35.99 | - | 5.8% | -6.3% |
| SAVE | $34.48 | $38.54 | - | 11.8% | -6.3% |
| PPC | $18.98 | $22.91 | - | 20.7% | -6.3% |
| VEC | $23.60 | $20.78 | - | -11.9% | -6.3% |
| VNCE | $3.99 | $4.48 | - | 12.3% | -6.3% |
| Totals | 7.7% | -6.3% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | -2.0% | 7.7% | -10.2% | -26.5% | -7.8% |
| Previous Tranche | 11.2% | 69.4% | 8.5% | 18.3% | 46.3% |
| 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 | 75.7% | 199.6% | 73.7% | 15.6% | 91.2% |
| Current Balance | 43,937 | 74,910 | 43,422 | 28,897 | 191,166 |
| R3K Current Tranche | -8.4% | -6.3% | -3.0% | -7.8% | -6.4% |
| R3K Overall Gain | 45.4% | 47.7% | 32.7% | 23.7% | 37.4% |
| R3K Balance | 36,341 | 36,937 | 33,168 | 30,924 | 137,370 |
| Annualized IRR | 18.0% | 41.7% | 20.7% | 5.6% | 23.4% |
While 3 of my 4 tranches are in the red, at least the last two are beating the benchmark. In aggregate, the 4 are trailing the benchmark by about 1.4 percentage points per stock. Let me say that compared to MFI in total, that is a home run - the differential is 8 percentage points in my tracking portfolios.
As my readers know, I generally also track "rejects" and "runoff" at each tranche (runoff means I hold the MFI tranche for a second year and rejects are generally about 10 stocks that I considered but did not buy).
Feb 2015
Actual: -10.2%
Rejects: -18% (TPUB and GORO each down over 50%)
Run Off: +13% (ATVI up 70%!)
May 2015
Actual: -26.5% (my worst tranche ever).
Rejects: -23%
Run Off: -26% (it was just a bad time to start an MFI tranche - tracking portfolio is -22%)
August 2015
Actual: -2%
Rejects: -17%
Run Off: -22% (whew)
November 2015
Actual +7.7% (is that a positive sign?)
Rejects: -11%
Run Off: -16% (and that is with IPCM being flat as it was acquired within a month).
| 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 |
| 1/1/2016 | 63.33% | 209,514 | 146,186 |
| Current | 53.80% | 191,166 | 137,370 |
This table shows the cliff impact the best. You can see on 12/1/15, my select tranches were notionally at $223,435. Now they are $191,166 (14% drop) and my lead over benchmark has eroded by 20 percentage points (73% to 53%).
MFI Formula
Well, about all I can say here is that I am losing money less quickly. I am "gaining" on the benchmark as we're both in reverse. The newest tranche has been actually ok (all things considered).
| 3/31/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| HRB | $31.99 | $32.29 | $0.60 | 2.8% | -7.9% |
| GME | $37.69 | $28.37 | $1.08 | -21.9% | -7.9% |
| KING | $15.85 | $17.65 | $0.00 | 11.3% | -7.9% |
| NSU | $3.43 | $2.50 | $0.12 | -23.6% | -7.9% |
| PPC | $22.65 | $22.91 | $0.00 | 1.1% | -7.9% |
| Totals | -6.0% | -7.9% | |||
| 7/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $46.45 | $28.16 | $0.46 | -38.4% | -7.9% |
| CA | $29.34 | $26.35 | $0.50 | -8.5% | -7.9% |
| MSFT | $44.42 | $52.33 | $0.67 | 19.3% | -7.9% |
| QCOM | $62.95 | $45.88 | $0.96 | -25.6% | -7.9% |
| VIAB | $64.75 | $40.98 | $0.80 | -35.5% | -7.9% |
| Totals | -17.7% | -7.9% | |||
| 10/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $36.83 | $28.16 | $0.23 | -22.9% | -1.1% |
| IQNT | $21.96 | $16.10 | $0.15 | -26.0% | -1.1% |
| QCOM | $53.45 | $45.88 | $0.48 | -13.3% | -1.1% |
| CSCO | $26.37 | $24.78 | $0.42 | -4.4% | -1.1% |
| CA | $27.30 | $26.35 | $0.25 | -2.6% | -1.1% |
| Totals | -13.8% | -1.1% | |||
| 12/31/15 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BBY | $30.31 | $28.95 | $0.00 | -4.5% | -6.5% |
| GME | $28.34 | $28.37 | $0.00 | 0.1% | -6.5% |
| IILG | $15.89 | $13.79 | $0.00 | -13.2% | -6.5% |
| PPC | $22.22 | $22.91 | $0.00 | 3.1% | -6.5% |
| VIAB | $40.93 | $40.98 | $0.00 | 0.1% | -6.5% |
| Totals | -2.9% | -6.5% |
But I can not wallpaper these results. They are not very satisfying. The July and October tranches are just messes. But it is a marathon, not a sprint. I stay the course.
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | -13.8% | -2.9% | -6.0% | -17.7% | -10.1% |
| Previous Tranche | 0.5% | 11.0% | 0.0% | 0.0% | 3.1% |
| Tranche -2 | 0.0% | - | - | - | 0.0% |
| MFI Overall Gain | -13.4% | 7.8% | -6.0% | -17.7% | -7.3% |
| Current Balance | 216,238 | 269,509 | 235,074 | 205,461 | 926,282 |
| R3K Current Tranche | -1.1% | -6.5% | -7.9% | -7.9% | -5.8% |
| R3K Overall Gain | -1.7% | -6.7% | -7.9% | -7.9% | -5.8% |
| R3K Balance | 245,598 | 233,166 | 230,443 | 230,118 | 939,325 |
| Annualized IRR | -10.7% | 7.6% | -7.7% | -30.9% | -8.2% |
Wow, -8.2% annualized IRR - that is a bad number.
| 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 |
| 1/1/2016 | -3.36% | 96,830 | 100,193 |
| Current | -1.50% | 92,628 | 94,129 |
Pretty sharp drop off since 11/1, from $104K to $92.6K.
MFI Micro
Small stocks are certainly not unscathed in sell off. If anything, it has been worse. So I am actually pleased that both tranches are hanging in there.
| 8/28/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VNCE | $8.50 | $4.48 | $0.00 | -47.3% | -3.7% |
| ONE | $1.99 | $3.33 | $0.00 | 67.3% | -3.7% |
| TPUB | $11.60 | $8.47 | $0.18 | -25.5% | -3.7% |
| LQDT | $7.26 | $5.90 | $0.00 | -18.7% | -3.7% |
| PERI | $2.45 | $2.74 | $0.00 | 11.8% | -3.7% |
| Totals | -2.5% | -3.7% | |||
| 12/15/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MGIC | $5.38 | $5.57 | $0.00 | 3.5% | -6.2% |
| BSQR | $6.00 | $5.61 | $0.00 | -6.5% | -6.2% |
| SPCB | $4.52 | $4.82 | $0.00 | 6.6% | -6.2% |
| WLDN | $8.64 | $8.05 | $0.00 | -6.9% | -6.2% |
| MNDO | $2.58 | $2.52 | $0.00 | -2.3% | -6.2% |
| Totals | - | -1.1% | -6.2% |
Both in the red (but not by much), however they are each winning. PERI sold off over 20% this week. I have doubled my share count as I felt was over done. That was my only transaction during this entire week.
Dividends and Warrants
| Div and Warrants | Start | Current | Dividend | Pct Gain | Pct Gain Last Week |
| BAC-WTA | $6.04 | $4.89 | $0.00 | -19.0% | -3.6% |
| AOD | $8.08 | $7.29 | $1.64 | 10.5% | 15.3% |
| JQC | $7.82 | $7.75 | $0.05 | -0.2% | 0.9% |
| CSQ | $9.32 | $9.12 | $2.03 | 19.6% | 27.3% |
| NTC | $12.06 | $12.72 | $1.24 | 15.8% | 16.1% |
| TGONF | $10.24 | $9.55 | $1.19 | 4.9% | 8.3% |
| HIG-WT | $21.24 | $33.22 | $0.00 | 56.4% | 72.9% |
| O | $22.72 | $51.17 | $17.82 | 203.7% | 205.7% |
| OIBAX | $5.04 | $5.52 | $2.14 | 51.9% | 51.9% |
| SJT | $8.82 | $5.13 | $0.13 | -40.4% | -51.6% |
| REXI | $6.35 | $5.99 | $0.05 | -5.0% | -2.8% |
| Totals | 2.6% | 6.2% |
While in total this group held up better than most (going from +6.2% to +2.6%); the BAC-WTA sell off is insane in my mind. My average buy price is $6.04 and it is now 19% off of that (it was 3.6% off it last week) at $4.89. I may buy quite a few more shares next week - that really seems overdone. SJT actually made a decent move up. Still way under water, but still felt vindicated a bit. The flatness in NTC seems quite telling to me - these are just municipal bonds. That and JQC are where people want to be.
Ok, that is kind of that. It hasn't been pretty, it could get worse. But the best stocks I ever bought were in March 2009. These drops mean down the road we'll have more two baggers. There are many stocks in the universe (bio tech names, NFLX, some of the IPOs) that fully deserve the sell off. But there are also many good values being created. Our job will be to separate the sheep from the goats.
Posts
3 comments:
My MFI Formula is at $95,000 vs R3k Value of $94,129. Just too many stocks that are down big time vs no huge wins like NHTC.
When you study the Track J Greenblatt from the Motley fool for nine years you see the big big losses but they are offset by the huge wins like NHTC. That is not going to happen with the dividend stocks in my opinion. Just huge losses without the gains.
I am turning yellow and may not renew my March 2016 tranche.
Good luck John. You can at least check in here regularly to see how my real money portfolios are faring.
Nothing for sure yet! I like the permanent portfolio for my advanced age. I will for sure check in.
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