I was surprised this morning when I did the math and saw I was up 1.2% on the week. It didn't seem like a good week. But CSCO had strong earnings, BAC-WTA went up at the sniff of interest rate hikes and my pharma stocks DEPO and LCI had some major lift.
So I am now up 2.3% for 2016 (please pause while I crow like a rooster) which is better than the anemic R3K (up a mere 1%). Of course, to be frank it isn't MFI doing the lifting for me in 2016, my select approach is down 6.5% and my formula approach is down 0.7%. It is more my swing trades (which have been surprisingly effective) and my dividend/warrant holdings.
MFI Results By Year
I have not published this table in a while, but it shows my MFI Index year by year and inception to date against the benchmark. It is in line with the "One Depressing Graph" posting of last week.
| 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 | 0.38% | -8.95% | 98.33% | 89.37% |
| 2016 | 0.97% | -5.27% | 99.29% | 84.66% |
So you can see MFI was trailing going into 2013. It had a big year and caught up. 2014 was a push and now 2015 and 2016 it has trailed. Who knows, next year might be another big win.
MFI Select
| 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 |
| 2/1/2016 | 49.49% | 187,428 | 137,934 |
| 3/1/2016 | 56.48% | 194,415 | 137,934 |
| 4/1/2016 | 47.34% | 195,770 | 148,430 |
| 5/1/2016 | 46.38% | 194,301 | 147,923 |
| Current | 47.87% | 195,535 | 147,665 |
It is funny, think about the table I displayed showing my MFI index and then look at my MFI select. 2013 was a huge year for me as well as I went from 102,798 to 157,138 - that corresponds pretty closely to the 51.7% gain for the index. And in 2016 I have gone down from 209,514 to 195.535 - that again corresponds to the -5.27% for the index in 2016. My point being that it is possible for me to "select" stocks and differentiate from the index, but the two will generally move in the same direction.
| 8/17/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VDSI | $18.66 | $15.95 | $0.00 | -14.5% | -1.5% |
| SALE | $9.34 | $7.10 | $0.00 | -24.0% | -1.5% |
| CSCO | $28.95 | $27.97 | $0.68 | -1.0% | -1.5% |
| TGNA | $25.30 | $22.57 | $0.42 | -9.1% | -1.5% |
| HSII | $20.14 | $18.27 | $0.26 | -8.0% | -1.5% |
| Totals | -11.3% | -1.5% | |||
| 11/15/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| LCI | $34.01 | $22.50 | $ - | -33.8% | 0.7% |
| SAVE | $34.48 | $42.32 | $ - | 22.8% | 0.7% |
| PPC | $18.98 | $24.97 | $ 2.75 | 46.0% | 0.7% |
| VEC | $23.60 | $24.52 | $ - | 3.9% | 0.7% |
| VNCE | $3.99 | $5.86 | $ - | 46.9% | 0.7% |
| Totals | 17.1% | 0.7% | |||
| 2/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VEC | $19.64 | $24.52 | $ - | 24.9% | 7.1% |
| QCOM | $45.18 | $54.52 | $ 0.48 | 21.7% | 7.1% |
| PERI | $2.45 | $1.30 | $ - | -46.9% | 7.1% |
| DEPO | $15.34 | $19.92 | $ - | 29.9% | 7.1% |
| TDC | $24.02 | $26.44 | $ - | 10.1% | 7.1% |
| Totals | 7.9% | 7.1% | |||
| 5/6/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BRCD | $7.97 | $7.97 | $ - | 0.0% | 0.4% |
| CBI | $37.82 | $36.59 | $ - | -3.3% | 0.4% |
| HSII | $18.51 | $18.27 | $ - | -1.3% | 0.4% |
| RHI | $38.51 | $39.69 | $ - | 3.1% | 0.4% |
| UTHR | $107.99 | $113.62 | $ - | 5.2% | 0.4% |
| Totals | 0.7% | 0.4% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | -11.3% | 17.1% | 7.9% | 0.7% | 3.7% |
| Previous Tranche | 11.2% | 69.4% | -14.3% | -25.2% | 56.3% |
| Tranche -2 | 41.4% | 14.2% | 8.5% | 18.3% | 20.6% |
| Tranche -3 | 14.1% | 43.7% | 78.3% | 33.0% | 0.0% |
| MFI Overall Gain | 59.0% | 225.8% | 78.8% | 18.5% | 95.5% |
| Current Balance | 39,754 | 81,457 | 44,707 | 29,618 | 195,535 |
| R3K Current Tranche | -1.5% | 0.7% | 7.1% | 0.4% | 1.7% |
| R3K Overall Gain | 56.2% | 58.8% | 42.7% | 33.0% | 47.7% |
| R3K Balance | 39,053 | 39,706 | 35,669 | 33,238 | 147,665 |
| Annualized IRR | 13.1% | 39.9% | 19.2% | 5.7% | 21.2% |
Looking at the tranches, August has really fallen off the table. All five stocks are down. HSII has really crashed, it is down 8% but was up over 35% at the start of 2016. The November tranche continues to be very strong. February is frustrating (pause a moment while I kick myself), I actually have 4 strong stocks, but PERI is killing me! It may still bounce back, but their last earnings report was a mess.
Then May is off to an ok start. BRCD had pretty subpar earnings on Friday, but the stock price has held in there.
MFI Formula
As this approach continues to underwhelm, I keep toying with the idea of pulling the plug or modifying (perhaps just two tranches a year instead of 4).
| 7/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $46.45 | $23.27 | $1.96 | -45.7% | -1.0% |
| CA | $29.34 | $31.31 | $0.75 | 9.3% | -1.0% |
| MSFT | $44.42 | $50.62 | $1.39 | 17.1% | -1.0% |
| QCOM | $62.95 | $54.52 | $1.44 | -11.1% | -1.0% |
| VIAB | $64.75 | $39.05 | $1.20 | -37.8% | -1.0% |
| Totals | -13.7% | -1.0% | |||
| 10/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $36.83 | $23.27 | $1.73 | -32.1% | 6.3% |
| IQNT | $21.96 | $16.23 | $0.30 | -24.7% | 6.3% |
| QCOM | $53.45 | $54.52 | $0.96 | 3.8% | 6.3% |
| CSCO | $26.37 | $27.97 | $0.68 | 8.6% | 6.3% |
| CA | $27.30 | $31.31 | $0.50 | 16.5% | 6.3% |
| Totals | -5.6% | 6.3% | |||
| 12/31/15 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BBY | $30.31 | $32.34 | $0.73 | 9.1% | 0.6% |
| GME | $28.34 | $28.48 | $0.37 | 1.8% | 0.6% |
| IILG | $15.89 | $13.16 | $0.12 | -16.4% | 0.6% |
| PPC | $22.22 | $24.97 | $2.75 | 24.8% | 0.6% |
| VIAB | $40.93 | $39.05 | $0.40 | -3.6% | 0.6% |
| Totals | 3.1% | 0.6% | |||
| 4/1/16 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CALM | $51.27 | $45.45 | $0.44 | -10.5% | 0.3% |
| HPQ | $12.10 | $11.66 | $0.00 | -3.7% | 0.3% |
| TIME | $15.24 | $14.49 | $0.00 | -4.9% | 0.3% |
| IILG | $13.85 | $13.16 | $0.00 | -5.0% | 0.3% |
| TSRA | $30.79 | $30.52 | $0.00 | -0.9% | 0.3% |
| Totals | -5.0% | 0.3% |
You can quickly see that 3 of 4 tranches are trailing.
| 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 | 100,012 |
| 2/1/2016 | -0.72% | 93,797 | 94,367 |
| 3/1/2016 | 4.07% | 98,588 | 94,367 |
| 4/1/2016 | 0.34% | 102,371 | 101,548 |
| 5/1/2016 | -1.91% | 99,774 | 101,200 |
| Current | -3.42% | 97,586 | 101,011 |
Pretty difficult to get excited about this table. My annualized IRR since starting this is -1.9%. It has been tough sledding since a year ago, down almost 10%. Not exactly getting rich.
Dividend and Warrants
This continues to be my gold standard, up almost 7% this year.
| Div and Warrants | Start | Current | Dividend | Pct Gain | Pct Gain Last Week | Year End 2015 |
| BAC-WTA | $4.90 | $4.00 | $0.00 | -18.3% | -22.8% | -3.6% |
| AOD | $7.65 | $7.35 | $1.38 | 14.2% | 13.9% | 15.3% |
| JQC | $7.81 | $7.97 | $0.30 | 5.9% | 5.4% | 0.9% |
| CSQ | $9.04 | $9.64 | $1.77 | 26.2% | 27.1% | 27.3% |
| NTC | $12.07 | $13.55 | $1.50 | 24.7% | 25.7% | 16.1% |
| TGONF | $10.24 | $10.05 | $1.52 | 13.0% | 10.6% | 8.3% |
| HIG-WT | $21.24 | $37.98 | $0.00 | 78.8% | 76.1% | 72.9% |
| O | $23.31 | $59.19 | $18.32 | 232.5% | 253.5% | 205.7% |
| OIBAX | $5.05 | $5.70 | $2.21 | 56.6% | 57.3% | 51.9% |
| SJT | $8.75 | $6.28 | $0.19 | -26.1% | -28.1% | -51.6% |
| REXI | $5.60 | $6.46 | $0.13 | 17.6% | 11.2% | -2.8% |
| Totals | 9.5% | 7.8% | 6.2% |
You can see that it was a good week, going from +7.8% to +9.5%. I am kicking around unwinding the SJT position this summer. I have convinced myself that AR is a better play on natural gas and I have seen several of these trust approaches crash (BPT, MSB and GNI to name three). TRusts at some point run down as they are generally not reinvesting in the future. Not sure you want to be holding the bag at the end. I need to do more research.
Discretionary Stocks
With the winding down of my Micro MFI approach, I now have a basket of stocks that are discretionary:
I will roll BIZD into the dividend bucket in 2017. Not sure how I will track the other five - I may just mention occasionally as the idea of the discretionary stocks is that they will be changing.
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