Saturday, December 24, 2016

Down The Stretch on 12/31/15 Tranche

Down The Stretch

Just one week left on my MFI Formula 12/31/15 tranche from last year.  Still hoping it can eke out a win.


 12/31/15 Stocks   Start   Current   Dividend   Pct Gain   R3K Gain 
 BBY  $30.31 $44.77 $1.57 52.9% 13.2%
 GME  $28.34 $25.41 $1.48 -5.1% 13.2%
 ILG  $15.89 $18.19 $0.48 17.5% 13.2%
 PPC  $22.22 $19.02 $2.75 -2.0% 13.2%
 VIAB  $40.93 $35.15 $1.20 -11.2% 13.2%
 Totals  10.4% 13.2%


n all candor, a win seems like a stretch.  I did avoid any stinkers, but three of five losing money is likely too much to overcome.  The seven "rejects" are only up 3%, so it was a bad hand all around.  Actually, my rejects excludes OUTR (I allow myself one stock to exclude) and that turned out to be one of best (up 47%).  That means the non-picked stocks were up 9% - so pretty much on par with my 5.

Looking forward, GME will very likely remain on the list. VIAB is a smidgen off, so if it sells off next week, it could be in again (they cut their dividend 50%).  Here is list of options as of today:


Number Ticker Market Cap Price
1 HRB                 4,924         23.28
2 BKE                 1,084         22.30
3 CA              13,241         32.05
4 CSCO            153,383         30.53
5 GME                 2,607         25.41
6 GILD              97,352         73.64
7 HPQ              25,851         15.10
8 PBI                 2,896         15.60
9 RGR                 1,025         54.05
10 SYNT                 1,664         19.79
11 TGNA                 4,715         21.99

I know, pretty hard to get excited about those 11 options.  Oh well, I doubt I'll discard any, I do not see a clear no-no.  I will likely sell my losers on Thursday and buy my five stocks on Friday.  I'll then sell winners on January 3rd. As mentioned, I will be increasing $ commitment by about 50% in 2017, so fingers crossed.

I will track overall still as if put in $100,000 at start.  I will also close all my positions for tracking purposes 12/31.

8 comments:

John Carney said...

Marsh,

Using a 600 million minimum I get 16 names. A little better. Got 5 more if you lower the dividend to > 1.8%.

I have a hard time doing a double or trible on any of the MFI names. The larger the investment the harder it is to put 15% in a MFI stock.

Marsh_Gerda said...

I get it John. I think my ramble a couple weeks ago highlighted the real key. You need to reduce your exposure to MFI stocks that can really crash and burn. Dividend stocks and larger stocks is one approach, but I gave a few other ideas (avoidance of biotech).

Steven Degrijse said...

Why avoid biotech? Isn't the whole idea of MFI to buy good stocks when the price is good? AMGN, GILD, BIIB, JAZZ are all descent biotech stocks at bargain prices.

Steven Degrijse said...

Why avoid biotech? Isn't the whole idea of MFI to buy good stocks when the price is good? AMGN, GILD, BIIB, JAZZ are all descent biotech stocks at bargain prices.

John Carney said...

So the plan going forward is to just use the 11 names or so and be willing to buy the same stock twice or three times if it come to you on a random sort. Of course you will apply certain industries filters along with the >2.4 dividend and big caps. Stinkers fall to 3 or 4% hopefully. And you win by beating the market and avoiding hugh losses.

Marsh_Gerda said...

Steve - I did a study of MFI stocks that have dropped by more than 40% over a year and a disproportionate percentage of them were in the biotech sector. To your point, I think you need to differentiate between biotechs with a steady earnings stream (like AMGN or BIIB) and ones that got a one time large royalty payment like NLNK or XENE.

Marsh_Gerda said...

JC - that is indeed my plan. I know it seems "risky", but my data shows that these types of names are much less likely to have a really bad year "stinker". And I also believe that by buying it at different points in time, you reduce riskiness. Yes, you might get GME twice, but once might be at $36 and the other $25. Seth Klarman wrote a great book discussing what people consider "risky". If you have done your homework and buy a lot of a stock at 50 cents on the dollar, his view is that is not as risky as spreading your bets with many of the stocks being fairly valued.

John Carney said...

Thanks!! I thought we were on the same page. Getting excited again! Did a review today of some paper trades. GILD came up as a biotech but fits with cap and dividend. So we still have 11 names.