There is no alternative has long seemed a weak basis for putting money in the stock market. On Friday, the cracks in that approach seemed to present themselves. The broader market was down well over 2%, first day like that since Brexit. The so-called driver was that the probability of an interest rate hike in September has gone up. I guess. I am not sure what caused that probability to increase at the end of the week. I have always thought a hike is unlikely given data is non-conclusive and we're in the midst of a presidential campaign. But what do I know, I am just a guy with a spreadsheet.
Either way, I am not willing to "bet" on my opinion. I am in it for the long haul. I have a lot of cash
in fist and I also have the SDS as a top 5 holding.
It was interesting looking at my stocks during the Friday stampede. PPC and VIAB were amongst worst performers. But interest sensitive stocks like JQC and DSL were poor as well. My BAC warrants held up well as did MET and GNW. All three of those are helped by higher rates.
All in all, I was down 1.8% for the week versus about 2.4% for the R3K. So I guess I should be happy. Monday will be telling... my inclination is that the sell-off continues, but I am the world's worst predictor of these things.
MFI Select
September has been rough for this group. It started last week with the VEC crash and burn. It continued this week, although it is harder to point at a single security.
| 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 |
| 7/1/2016 | 50.41% | 201,092 | 150,680 |
| 8/1/2016 | 52.72% | 207,223 | 154,501 |
| 9/1/2016 | 67.04% | 222,481 | 155,446 |
| Current | 55.62% | 209,629 | 154,011 |
So one can see I am down about 6% in September. No one said it was easy.
| 11/15/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| LCI | $34.01 | $30.42 | $0.00 | -10.6% | 5.5% |
| SAVE | $34.48 | $38.36 | $0.00 | 11.3% | 5.5% |
| PPC | $18.98 | $21.39 | $2.75 | 27.2% | 5.5% |
| VEC | $23.60 | $27.21 | $0.00 | 15.3% | 5.5% |
| VNCE | $3.99 | $6.35 | $0.00 | 59.1% | 5.5% |
| Totals | 20.5% | 5.5% | |||
| 2/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VEC | $19.64 | $27.21 | $0.00 | 38.6% | 12.3% |
| QCOM | $45.18 | $60.52 | $1.54 | 37.4% | 12.3% |
| PERI | $2.45 | $1.31 | $0.00 | -46.5% | 12.3% |
| DEPO | $15.34 | $21.95 | $0.00 | 43.1% | 12.3% |
| TDC | $24.02 | $29.79 | $0.00 | 24.0% | 12.3% |
| Totals | 19.3% | 12.3% | |||
| 5/6/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BRCD | $7.97 | $9.16 | $0.11 | 16.3% | 5.2% |
| CBI | $37.82 | $29.31 | $0.00 | -22.5% | 5.2% |
| HSII | $18.51 | $18.50 | $0.13 | 0.6% | 5.2% |
| RHI | $38.51 | $37.30 | $0.44 | -2.0% | 5.2% |
| UTHR | $107.99 | $119.96 | $0.00 | 11.1% | 5.2% |
| Totals | 0.7% | 5.2% | |||
| 8/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $31.20 | $30.85 | $0.00 | -1.1% | -2.3% |
| GNC | $19.79 | $20.73 | $0.00 | 4.7% | -2.3% |
| VLO | $54.73 | $54.92 | $0.00 | 0.3% | -2.3% |
| MSGN | $16.68 | $17.59 | $0.00 | 5.5% | -2.3% |
| GILD | $79.33 | $78.05 | $0.00 | -1.6% | -2.3% |
| Totals | 1.6% | -2.3% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 1.6% | 20.5% | 19.3% | 0.7% | 11.9% |
| Previous Tranche | 2.8% | 69.4% | -14.3% | -25.2% | 11.1% |
| Tranche -2 | 11.2% | 14.2% | 8.5% | 18.3% | 13.0% |
| Tranche -3 | 41.4% | 43.7% | 78.3% | 33.0% | 49.1% |
| Tranche -4 | 14.1% | 0.0% | 0.0% | 0.0% | 3.5% |
| MFI Overall Gain | 87.3% | 235.1% | 97.7% | 18.4% | 109.6% |
| Current Balance | 46,831 | 83,768 | 49,422 | 29,607 | 209,629 |
| R3K Current Tranche | -2.3% | 5.5% | 12.3% | 5.2% | 5.2% |
| R3K Overall Gain | 63.2% | 66.4% | 49.6% | 33.0% | 54.0% |
| R3K Balance | 41,779 | 41,607 | 37,388 | 33,238 | 154,011 |
| Annualized IRR | 16.7% | 37.2% | 20.8% | 5.2% | 21.4% |
Looking at the 4 tranches, November has been struggling of late. As mentioned, PPC has been a turkey lately. SAVE has lost a lot of altitude. VEC has been a wreck. And LCI seems drugged out. VNCE reported earnings Thursday. I was underwhelmed, but stock held up well on Friday (
| Vince Holding Corp. Reports Second Quarter 2016 Results |
Depo continues to carry a lot of water for February tranche. They have some huge hearing at end of September... fingers crossed (Depomed: Focus On Nucynta Litigation Outcome). May is a mess, AGX should have been picked over CBI. But CBI also has some huge overhang, if it goes well, then perhaps the stock will bounce (Chicago Bridge & Iron: Buy This Discounted Binary Event).
The August tranche is off to a nice start. I looked at the stocks I rejected... it seems I have done well so far, no winners in that group.
MFI Formula
In theory, since these are all dividend stocks of 2.4% or greater, they would be hurt by interest rate increases, all else being equal. That does seem at play as I have certainly lost ground since August 1st.
| 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 |
| 7/1/2016 | -0.19% | 103,022 | 103,216 |
| 8/1/2016 | 2.56% | 109,419 | 106,857 |
| 9/1/2016 | -0.34% | 106,704 | 107,048 |
| Current | -1.91% | 103,222 | 105,130 |
My 9/30 tranche just has a little time left on their shot clock. Can't say I'll miss it.
| 10/1/2015 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $36.83 | $24.16 | $1.98 | -29.0% | 11.4% |
| IQNT | $21.96 | $16.41 | $0.60 | -22.5% | 11.4% |
| QCOM | $53.45 | $60.52 | $2.02 | 17.0% | 11.4% |
| CSCO | $26.37 | $30.85 | $0.94 | 20.6% | 11.4% |
| CA | $27.30 | $33.07 | $1.01 | 24.8% | 11.4% |
| Totals | 2.2% | 11.4% | |||
| 12/31/15 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BBY | $30.31 | $36.87 | $1.01 | 25.0% | 5.4% |
| GME | $28.34 | $27.18 | $0.74 | -1.5% | 5.4% |
| IILG | $15.89 | $16.86 | $0.36 | 8.4% | 5.4% |
| PPC | $22.22 | $21.39 | $2.75 | 8.7% | 5.4% |
| VIAB | $40.93 | $37.16 | $0.80 | -7.2% | 5.4% |
| Totals | 6.7% | 5.4% | |||
| 4/1/16 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CALM | $51.27 | $43.46 | $0.44 | -14.4% | 5.1% |
| HPQ | $12.10 | $14.07 | $0.13 | 17.3% | 5.1% |
| TIME | $15.24 | $14.42 | $0.38 | -2.9% | 5.1% |
| IILG | $13.85 | $16.86 | $0.24 | 23.4% | 5.1% |
| TSRA | $30.79 | $33.35 | $0.40 | 9.6% | 5.1% |
| Totals | 6.6% | 5.1% | |||
| 7/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| IILG | $16.76 | $16.86 | $0.12 | 1.3% | 1.0% |
| VIAB | $44.00 | $37.16 | $0.00 | -15.5% | 1.0% |
| CPLA | $53.22 | $57.54 | $0.39 | 8.9% | 1.0% |
| HRB | $23.62 | $21.94 | $0.00 | -7.1% | 1.0% |
| PBI | $17.69 | $17.78 | $0.19 | 1.6% | 1.0% |
| Totals | -2.2% | 1.0% |
VIAB is certainly a drag. At 37.16, I have to think it is a good buy. But I have enough, thank you.
Dividend & Warrants
You would expect this week to be tough. It was not that bad.
| Div and Warrants | Start | Current | Dividend | Pct Gain | Pct Gain Last Week | June 1 2016 |
| BAC-WTA | $4.90 | $4.84 | $0.00 | -1.2% | 0.0% | -20.6% |
| AOD | $7.64 | $7.67 | $1.51 | 20.2% | 20.7% | 17.1% |
| JQC | $7.82 | $8.37 | $0.45 | 12.7% | 13.2% | 8.4% |
| CSQ | $9.07 | $10.29 | $2.05 | 36.1% | 38.3% | 30.5% |
| DSL | $18.42 | $18.99 | $0.44 | 5.5% | 8.1% | 0.0% |
| TGONF | $10.24 | $10.93 | $1.69 | 23.3% | 22.8% | 12.5% |
| HIG-WT | $21.24 | $36.90 | $0.00 | 73.8% | 73.8% | 75.7% |
| O | $23.70 | $64.26 | $18.95 | 251.1% | 259.5% | 249.0% |
| OIBAX | $5.06 | $5.95 | $2.27 | 62.4% | 61.8% | 58.1% |
| SJT | $8.75 | $5.75 | $0.23 | -31.6% | -31.7% | -14.4% |
| GLDI | $10.68 | $10.51 | $0.45 | 2.7% | 2.2% | 0.0% |
| Totals | 14.5% | 15.4% | 9.0% |
Earlier in the week, several of these went up nicely and then reversed on Friday. I did buy a new one on Friday, SBRA. Just a quarter position now, I plan to add during the rest of 2016 and make it a core position in this portfolio. It is a healthcare REIT, yielding 6.4%.
Other Holdings
My "strategic alternatives" plays kind of struggled this week. EMG went down quite a bit - not sure if just emotional or they are inversely correlated with interest rates. I still think this is one likely to pop. PN went up and went down. I am still watching PMC and AFCO.
Have a great weekend.
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