Wednesday, September 21, 2016

Lowered Expectations = Higher Stock Market

Mid Week Thoughts

In the topsy-turvy world that is our stock  market, I had a 1.2% gain today as the Fed held rates steady and commented that low growth could continue for long time.  So we continue to borrow gains from tomorrow and take them today.  I will be curious to see what the markets do tomorrow after a day of reflection... if algo computers are capable of reflection.

So I am now up  2% for the week and 11.4% for the year.  I am relieved I took off my short hedges 10 days ago... better lucky than good.

The  MFI Index (a basket of 50 stocks created once a year) has now passed the R3K... up 8.3% this year.  Interestingly, GARIX, Gotham's MFI fund is only up about 3% this year. It has been an underwhelming approach.  I guess it'll do "better" when everything crashes.

Here are my open 12 tracking tranches:

9/25/2015 7.6% 13.5% 0
10/30/2015 5.7% 6.0% 0
11/27/2015 4.2% 4.9% 0
12/31/2015 8.7% 7.7% 1
1/29/2016 17.1% 14.2% 1
2/26/2016 14.7% 13.4% 1
3/24/2016 14.9% 8.2% 1
4/22/2016 4.6% 4.7% 0
5/27/2016 10.8% 4.2% 1
6/30/2016 9.8% 3.9% 1
7/29/2016 1.8% 0.0% 1
8/26/2016 0.8% -0.1% 1
Average 12 8.4% 6.7%

You can see that 8 of 12 are leading (first column is MFI,  second column is benchmark and third column a flag if MFI is ahead.  It is very, very close to the most recent 9 all leading.  With the dividend stocks, it is much closer, pretty much a coin flip.

Ok, back to it.

1 comment:

Corpraider said...

Yeah I don't know about GARIX and those long short funds either. He said in multiple places that the L/S blew up historically and his answers on what changed his mind aren't all that satisfying. I use QVAL and DVP as sort of MF proxies since they both piggyback off the big muscle movement which is the EBIT/TEV value prong and then add their own variations on quality. I think DVP has a dividend requirement as well. Might be a suitable comp for you "formula" approach to the "magic formula", if you're looking for one.