Weekend Update - 6/4/16

Weekend Update

Good morning. Funny, it felt like a bad week as Friday was so bad.  But I actually eked out a minor gain as did the Russell 3000.  We had a terrible jobs number, which assuredly takes any June rate hike off the table.  It is starting to feel like we are going to have an entire century of low interest rates.  Something to noodle over.

I was a bit active this week on the transaction side.  I sold my NTC, which had been a solid performer for two year.  It is just I live in Connecticut and the finances of the government here are in disarray.  They have recently been downgraded and every year seem to have a large deficit.  This editorial in the WSJ clinched it for me (Opinion Journal: Connecticut's Bridgewater Bribe).

I used some of the proceeds to buy DSL, a closed end fund that yields 10%.  So I will actually increase my income stream a bit.  I also bought a speculative position in BXE, a natural gas play I owned a year or so ago. I bought that for 96 cents, a true penny stock.  To be clear, this is a smallish position.

MFI Select

8/17/2015	Start	Current	Dividend	Pct Gain	R3K Gain
VDSI	$18.66	$16.71	$0.00	-10.5%	0.9%
SALE	$9.34	$7.16	$0.00	-23.3%	0.9%
CSCO	$28.95	$29.13	$0.68	3.0%	0.9%
TGNA	$25.30	$22.84	$0.56	-7.5%	0.9%
HSII	$20.14	$18.35	$0.26	-7.6%	0.9%
Totals				-9.2%	0.9%
11/15/2015	Start	Current	Dividend	Pct Gain	R3K Gain
LCI	$34.01	$24.61	$           -	-27.6%	3.2%
SAVE	$34.48	$42.94	$           -	24.6%	3.2%
PPC	$18.98	$25.00	$       2.75	46.2%	3.2%
VEC	$23.60	$25.48	$           -	8.0%	3.2%
VNCE	$3.99	$5.58	$           -	39.8%	3.2%
Totals				18.2%	3.2%
2/1/2016	Start	Current	Dividend	Pct Gain	R3K Gain
VEC	$19.64	$25.48	$           -	29.7%	9.8%
QCOM	$45.18	$54.94	$       1.01	23.8%	9.8%
PERI	$2.45	$1.28	$           -	-47.8%	9.8%
DEPO	$15.34	$20.16	$           -	31.4%	9.8%
TDC	$24.02	$28.31	$           -	17.9%	9.8%
Totals				11.0%	9.8%
5/6/2016	Start	Current	Dividend	Pct Gain	R3K Gain
BRCD	$7.97	$8.84	$           -	10.9%	2.9%
CBI	$37.82	$38.18	$           -	1.0%	2.9%
HSII	$18.51	$18.35	$           -	-0.9%	2.9%
RHI	$38.51	$40.45	$           -	5.0%	2.9%
UTHR	$107.99	$116.31	$           -	7.7%	2.9%
Totals				4.7%	2.9%

I am pleased with how my three most recent tranches are doing, all out-performing.

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	-9.2%	18.2%	11.0%	4.7%	7.6%
Previous Tranche	11.2%	69.4%	-14.3%	-25.2%	53.9%
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	62.9%	228.7%	84.0%	23.2%	99.7%
Current Balance	40,717	82,182	45,993	30,795	199,686
R3K Current Tranche	0.9%	3.2%	9.8%	2.9%	4.2%
R3K Overall Gain	60.1%	62.8%	46.3%	33.0%	50.5%
R3K Balance	40,029	40,703	36,570	33,238	150,540
Annualized IRR	13.7%	39.8%	20.0%	7.0%	21.4%

This table shows you that on average my current tranches are up 7.6% (a herculean effort given how MFI tracking portfolios have fared) versus 4.2% for the R3K. It is a little frightening, looking at the current balance row.  My November tranches have done very very well. So I have 2x more in that tranche than any other. That may cause me to be more conservative in my picks in November.  I could rebalance. I will have to noodle that as well.

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
6/1/2016	51.44%	201,999	150,558
Current	49.15%	199,686	150,540

MFI Formula

7/1/2015	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$46.45	$25.08	$1.96	-41.8%	1.4%
CA	$29.34	$32.58	$1.01	14.5%	1.4%
MSFT	$44.42	$51.79	$1.39	19.7%	1.4%
QCOM	$62.95	$54.94	$1.97	-9.6%	1.4%
VIAB	$64.75	$45.00	$1.20	-28.6%	1.4%
Totals				-9.2%	1.4%
10/1/2015	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$36.83	$25.08	$1.73	-27.2%	8.9%
IQNT	$21.96	$18.04	$0.45	-15.8%	8.9%
QCOM	$53.45	$54.94	$1.49	5.6%	8.9%
CSCO	$26.37	$29.13	$0.68	13.0%	8.9%
CA	$27.30	$32.58	$0.76	22.1%	8.9%
Totals				-0.5%	8.9%
12/31/15 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
BBY	$30.31	$32.35	$0.73	9.1%	3.1%
GME	$28.34	$28.63	$0.37	2.3%	3.1%
IILG	$15.89	$14.76	$0.24	-5.6%	3.1%
PPC	$22.22	$25.00	$2.75	24.9%	3.1%
VIAB	$40.93	$45.00	$0.40	10.9%	3.1%
Totals				8.3%	3.1%
4/1/16 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
CALM	$51.27	$44.43	$0.44	-12.5%	2.8%
HPQ	$12.10	$13.44	$0.00	11.0%	2.8%
TIME	$15.24	$16.59	$0.19	10.1%	2.8%
IILG	$13.85	$14.76	$0.12	7.4%	2.8%
TSRA	$30.79	$32.36	$0.20	5.8%	2.8%
Totals				4.4%	2.8%

Category/Tranche	October	January	April	July	Total
Initial Investment	249,820	249,939	250,180	249,728	999,667
Current Tranche	-0.5%	8.3%	4.4%	-9.2%	0.8%
Previous Tranche	0.5%	11.0%	-0.2%	0.0%	3.0%
Tranche -2	0.0%	-	-	-	0.0%
MFI Overall Gain	0.0%	20.3%	4.1%	-9.2%	3.8%
Current Balance	249,824	300,613	260,458	226,832	1,037,728
R3K Current Tranche	8.9%	3.1%	2.8%	1.4%	4.1%
R3K Overall Gain	8.3%	2.9%	1.7%	1.4%	3.6%
R3K Balance	270,631	257,095	254,441	253,343	1,035,510
Annualized IRR	0.0%	13.8%	3.5%	-9.8%	2.9%

Here you can see my current tranches are up a mere 0.8%, whilst R3K is up  4.1%. That is closer to what I am seeing in tracking portfolios.  But my last two tranches are looking better, perhaps the tide is turning.

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
6/1/2016	-0.42%	103,145	103,568
Current	0.22%	103,773	103,551

Wow, a slight lead!  I'll take it.

Dividends & Warrants

BAC warrants took a sharp tumble on Friday.  I am going to  likely revise this table next week as REXI and NTC have both been sold.

Div and Warrants	Start	Current	Dividend	Pct Gain	Pct Gain Last Week	Year End 2015
BAC-WTA	$4.90	$3.89	$0.00	-20.6%	-15.9%	-3.6%
AOD	$7.64	$7.58	$1.37	17.1%	16.2%	15.3%
JQC	$7.82	$8.17	$0.30	8.4%	7.7%	0.9%
CSQ	$9.04	$10.03	$1.77	30.5%	29.6%	27.3%
NTC	$12.07	$13.63	$1.50	25.3%	25.3%	16.1%
TGONF	$10.24	$10.00	$1.52	12.5%	12.4%	8.3%
HIG-WT	$21.24	$37.31	$0.00	75.7%	78.6%	72.9%
O	$23.31	$63.05	$18.32	249.0%	235.5%	205.7%
OIBAX	$5.05	$5.77	$2.22	58.1%	56.7%	51.9%
SJT	$8.75	$7.31	$0.19	-14.4%	-18.5%	-51.6%
REXI	$5.60	$9.61	$0.13	73.8%	73.8%	-2.8%
Totals				17.0%	17.1%	6.2%