Saturday, May 07, 2016

Tough Earnings Season

Tough Earnings Season

I commented in my weekly update about how I had a bad week, driven in part by headlines and earnings.  I guess it should come as no surprise then, that MFI in total is struggling this earnings season.  I took a look at the 50 stock index I created on April 22nd.  It is already down 5.7%!  In the same time period, the Russell 3000 is down 1.8%.

Yes, the struggle continues.  It does make you consider how much longer to stick it out. 13 of last 14 tracking portfolios to close were losers and all 12 open portfolios are tracking.  I know JG said there would be times like this, but it makes you wonder has something changed from when he did his back testing?

Here are the worst performing stocks in the two weeks since the 4/22 tracking portfolio was kicked off.

Stock Initial Price End Price Percent Change
AMAG              28.91           19.85 -31.3%
FIT              17.58           13.62 -22.5%
ENTA              31.78           24.97 -21.4%
FPRX              49.76           40.32 -19.0%
INSY              16.12           13.21 -18.1%
PDLI                3.82             3.17 -17.0%
GILD            101.93           84.68 -16.9%
BRCD                9.69             8.08 -16.6%
BKE              31.32           26.20 -16.3%
BPT              16.75           14.21 -15.2%
PBI              21.49           18.35 -14.6%
RPXC              11.15             9.58 -14.1%
AAPL            105.04           92.72 -11.7%
UTHR            119.61         108.16 -9.6%
GME              32.80           30.09 -8.3%
OUTR              42.71           39.21 -8.2%
HPQ              12.61           11.59 -8.1%
NSR              25.01           23.07 -7.8%
STRA              49.23           45.72 -7.1%
ICON                8.66             8.13 -6.1%
CSCO              28.15           26.53 -5.8%
VIAB              43.78           41.32 -5.6%
VDSI              17.22           16.35 -5.1%

That seems to me to be a lot of pain in 2 short weeks. So while 23 stocks are down 5% or more, only 4 are up more than 5%. Not the type of asymmetry we were looking for (at least I own IILG!).

Stock  Initial Price   End Price  Percent Change
SRDX              20.28           22.19 9.4%
WILN                2.22             2.40 8.1%
IILG              13.48           14.47 7.3%
NHTC              35.89           38.20 6.4%

3 comments:

John Carney said...

I think you have proved that MFI does not WORK after 10 years! Even if you have a few errors in your spreed sheets it not worth it after time, taxes, and commisions.

Most of my friends look at the MFI list and call them not fully priced value traps. More down side vs upside.

I did five years and gave it up.

Maybe just the caps over 1 billion. Or maybe the dividend approach.

I am +1.7 to the index this week. Faith is hard to come BY!

Marsh_Gerda said...

John - I fully understand. I may wind it down after 2016 as well.

John Carney said...

I got 40 years of good investment returns in the Permanent Portfolio. Great for a old Man.

See the recent link:

http://gyroscopicinvesting.com/forum/permanent-portfolio-discussion/anybody-looked-at-3-year-real-returns!/

Also works for a younger MAN. That is my post!