Saturday, October 29, 2016

Magic Formula Investing Tracking Portfolio 10/30/15

MFI Monthly Tracking Portfolio

Another month/year has flown by. And so it is time to look at another monthly tracking portfolio as we reach the end of September 2016.  As my faithful readers know, I have been tracking the Magic Formula Stocks as described by Joel Greenblatt in The Little Book That Beats the Stock Market since January 2006.  Every month I take the top 50 stocks over $100m market cap from his website and track how that portfolio of stocks fares versus the Russell 3000 for the next 12 months.  It has been an uphill struggle as the tracking portfolios have under-performed, driven in part by Chinese reverse merger fiascos, for-profit education stocks and home health care stocks all being proverbial albatrosses.

Onward

 Fearless readers will recall we had a 29 month "losing streak"..  Then we had a 13 month winning streak. This month, MFI (wait for it) lost by 2 percentage points.. Technically, 18 of the past 19 have lost, although a few have been very close. Here are the 50 stocks in descending performance order:

Stock  Initial Price   End Price  Percent Change  52 week low   Mkt Cap 
ONE                2.94             5.15 75.2%                 1.85            141
CPLA              43.81           70.51 60.9%               39.06            541
AGX              36.31           55.45 52.7%               28.03            546
IDCC              49.96           69.45 39.0%               41.01         1,801
LBMH                2.41             3.35 39.0%                 1.96            129
HPQ              26.98           36.26 34.4%                 8.91       48,555
BCOR                9.80           13.05 33.2%                 4.69            401
KORS              38.64           50.12 29.7%               34.83         7,602
DEPO              17.50           22.45 28.3%               12.25         1,055
PPC              17.00           21.64 27.3%               18.42         4,924
TIVO                9.08           11.34 24.9%                 9.17            890
PETS              16.32           19.87 21.8%               15.73            342
KING              14.96           18.00 20.3%               12.00         4,709
QCOM              57.25           68.40 19.5%               42.24       93,765
APOL                7.26             8.67 19.4%                 6.31            784
MCFT                9.56           11.20 17.2%               10.25            227
CLCT              15.98           18.63 16.6%               13.67            154
BBY              33.45           38.78 16.0%               25.31       12,059
VNCE                4.55             5.25 15.4%                 3.49            167
CA              26.78           30.74 14.8%               25.18       12,035
MSB                8.21             9.30 13.3%                 3.00            115
FLR              47.01           52.11 10.8%               39.48         6,799
CSCO              27.88           30.59 9.7%               22.46     146,702
LQDT                8.19             8.75 6.8%                 4.42            246
STRA              52.92           56.40 6.6%               42.39            584
DLX              58.36           61.03 4.6%               49.46         2,966
SALE                8.79             9.15 4.1%                 5.52            502
AAPL            117.00         113.72 -2.8%               89.47     666,661
TDC              28.11           26.95 -4.1%               21.98         3,980
IILG              17.10           16.33 -4.5%               10.61         1,014
BBSI              47.80           45.11 -5.6%               22.55            350
PBI              19.83           18.09 -8.8%               16.24         4,089
OUTR              57.71           52.00 -9.9%               24.81         1,035
APEI              21.73           19.50 -10.3%               13.80            360
ENTA              28.09           23.93 -14.8%               20.39            526
NSR              27.19           22.91 -15.7%               20.00         1,447
IQNT              19.97           16.42 -17.8%               14.56            699
UTHR            146.63         118.14 -19.4%               97.52         7,038
VIAB              47.63           37.60 -21.1%               30.11       19,620
PDLI                4.27             3.29 -22.9%                 2.58            749
VDSI              19.01           13.91 -26.8%               12.35            752
CALM              52.18           38.16 -26.9%               36.45         2,593
RPXC              14.24             9.87 -30.7%                 8.60            809
VEC              24.87           16.54 -33.5%               12.50            263
AMAG              40.00           25.90 -35.3%               17.92         1,235
BKE              32.89           20.95 -36.3%               20.60         1,720
GME              43.92           23.90 -45.6%               23.69         4,879
ICON              15.32             7.84 -48.8%                 4.67            741
LCI              44.77           21.60 -51.8%               16.91         1,624
NLNK              38.27           12.36 -67.7%                 9.23         1,243


Definitely a few trends here. AMAG, PDLI and LCI and NLNK are in pharma space.  I have mentioned that a "Dogs of MFI" approach has shown some promise.  GME, BKE, VEC, ICON, PDLI and VIAB are still on the list.  It would take some courage to buy any of those - but I guess that is why they are called dogs. I did find another site that has been tracking since 2006 this week.  It uses a different approach, just 5 stocks picked randomly every quarter. They have had better results than me (TrackJGreenblatt's Stock Picks). I found it very interesting and would encourage people to take a looksee.

Here is a listing of every portfolio I have tracked:


Date MFI R3K Lead
1/6/2006 16.0% 10.9% 1
2/17/2006 21.2% 14.6% 1
3/29/2006 13.0% 9.6% 1
4/7/2006 10.3% 12.1% 0
5/12/2006 20.4% 18.6% 1
5/31/2006 29.2% 23.3% 1
6/30/2006 22.4% 20.0% 1
7/31/2006 19.7% 17.3% 1
8/31/2006 13.0% 13.3% 0
9/28/2006 12.7% 14.6% 0
10/27/2006 10.3% 12.0% 0
11/29/2006 -0.3% 4.8% 0
12/28/2006 -6.9% 3.4% 0
1/26/2007 -10.2% -6.6% 0
2/27/2007 -3.7% -1.0% 0
3/26/2007 -9.8% -5.5% 0
4/27/2007 -10.9% -5.0% 0
5/29/2007 -11.5% -6.3% 0
7/3/2007 -30.0% -15.6% 0
7/30/2007 -19.9% -11.5% 0
8/30/2007 -12.5% -8.7% 0
9/27/2007 -19.0% -18.2% 0
11/2/2007 -40.4% -34.3% 0
11/28/2007 -40.1% -38.3% 0
12/28/2007 -36.3% -40.0% 1
1/25/2008 -36.4% -35.9% 0
2/26/2008 -51.7% -41.5% 0
3/24/2008 -40.9% -36.8% 0
4/25/2008 -25.6% -31.0% 1
5/28/2008 -22.2% -33.6% 1
7/2/2008 -11.7% -25.3% 1
7/29/2008 -10.5% -20.9% 1
8/29/2008 -13.8% -17.9% 1
9/26/2008 -4.3% -10.0% 1
10/31/2008 18.7% 13.9% 1
11/26/2008 50.9% 27.7% 1
12/26/2008 48.9% 32.3% 1
1/23/2009 59.3% 36.4% 1
2/27/2009 92.8% 55.6% 1
3/27/2009 85.8% 48.1% 1
4/24/2009 69.7% 45.8% 1
5/29/2009 31.8% 22.8% 1
6/29/2009 21.3% 24.0% 0
7/29/2009 19.5% 15.9% 1
8/28/2009 7.4% 8.8% 0
9/25/2009 12.6% 12.4% 1
10/30/2009 22.7% 18.3% 1
11/27/2009 24.3% 13.6% 1
12/31/2009 23.7% 18.1% 1
1/22/2010 19.0% 20.6% 0
2/26/2010 18.6% 23.6% 0
3/25/2010 10.0% 15.4% 0
4/23/2010 7.1% 11.4% 0
5/28/2010 19.3% 25.4% 0
6/29/2010 16.7% 25.7% 0
7/29/2010 5.4% 20.1% 0
9/2/2010 7.3% 10.1% 0
9/24/2010 -4.3% 0.3% 0
10/29/2010 -2.9% 10.4% 0
11/26/2010 -8.5% 1.4% 0
1/3/2011 -11.4% 0.1% 0
1/28/2011 -7.6% 4.9% 0
2/25/2011 -5.5% 5.0% 0
3/24/2011 -4.4% 7.4% 0
4/21/2011 -16.0% 3.2% 0
5/27/2011 -12.0% -0.4% 0
6/24/2011 -9.5% 5.0% 0
7/29/2011 -4.3% 8.1% 0
8/26/2011 12.0% 21.6% 0
9/30/2011 23.5% 29.6% 0
10/28/2011 0.4% 11.5% 0
11/25/2011 13.9% 24.0% 0
12/29/2011 9.9% 15.9% 0
1/27/2012 7.4% 16.6% 0
2/24/2012 7.8% 13.3% 0
3/23/2012 9.1% 15.2% 0
4/27/2012 10.5% 15.3% 0
5/25/2012 26.5% 27.5% 0
6/22/2012 26.1% 24.6% 1
7/27/2012 30.4% 25.7% 1
8/24/2012 26.0% 19.8% 1
9/28/2012 39.3% 22.1% 1
10/26/2012 48.3% 28.9% 1
11/23/2012 45.7% 32.1% 1
12/31/2012 52.3% 33.0% 1
1/25/2013 39.5% 22.0% 1
2/22/2013 46.5% 26.4% 1
3/28/2013 40.1% 21.2% 1
4/26/2013 35.0% 20.5% 1
5/24/2013 20.4% 19.2% 1
6/28/2013 26.9% 24.1% 1
7/29/2013 17.8% 19.0% 0
8/30/2013 17.5% 24.6% 0
9/27/2013 12.9% 17.7% 0
10/25/2013 11.8% 15.4% 0
11/29/2013 12.3% 15.6% 0
12/31/2013 12.7% 11.9% 1
1/31/2014 14.2% 13.0% 1
2/28/2014 15.4% 13.9% 1
3/28/2014 6.1% 12.3% 0
4/25/2014 8.6% 15.8% 0
5/30/2014 5.9% 11.7% 0
6/27/2014 2.5% 9.2% 0
7/25/2014 3.3% 8.7% 0
8/29/2014 -2.2% 1.0% 0
9/26/2014 -0.6% -0.9% 1
10/31/2014 4.3% 4.4% 0
11/28/2014 -2.9% 2.9% 0
12/31/2014 -9.3% 0.3% 0
1/30/2015 -12.4% -2.8% 0
2/27/2015 -19.0% -7.3% 0
3/27/2015 -17.1% -1.9% 0
4/24/2015 -15.4% -0.8% 0
5/29/2015 -14.1% 0.1% 0
6/26/2015 -8.7% 0.4% 0
7/30/2015 3.96% 4.02% 0
8/28/2015 5.6% 10.2% 0
9/25/2015 6.5% 13.8% 0
10/30/2015 2.0% 4.0% 0
11/27/2015 0.7% 3.0% 0
12/31/2015 4.2% 5.6% 0
1/29/2016 12.1% 12.1% 1
2/26/2016 10.3% 11.2% 0
3/24/2016 10.7% 6.2% 1
4/22/2016 0.2% 2.7% 0
5/27/2016 6.0% 2.2% 1
6/30/2016 3.9% 2.0% 1
7/29/2016 -2.0% -1.9% 0
8/26/2016 -3.0% -1.9% 0
9/30/2016 -3.4% -2.2% 0

Subsets

I also have tracked 2 subsets of the larger portfolios:  (1) dividend stocks (those with a yield per Yahoo of at least 2.6%) and (2) new stocks (those new to the tracking portfolios in past 12 months.  I have added a third one , which I call "dogs".  It is like the dogs of the Dow in that you take the worst five performing stocks from the prior year that renew or all those that dropped more that 29%. The dividend portfolio was ok, up about 3.5%.   The Dogs portfolio was average, up 3.1%.  The New approach was terrible, down 22% (a team effort of 4 stocks).  Finally, I like to track cash as it is more "honest" than percentages as if you go up by 25% and then down by 25%, that is a different result than up by 5% then down by 5%.  So I track what you would have today if you had spread $100,000 over the first twelve portfolios evenly.


Category Value
Total      177,826
Total Russell 3K      203,995
New      166,255
Dogs      223,354
Dividend      388,500

2 comments:

jb said...

Unfortunately, it looks like the TrackJGreenblatt portfolio is not active anymore. The last 'trade' was October 2015 and then the selections/trades stop.

Marsh_Gerda said...

That is a shame.