Good morning everyone. I am in Switzerland. Not quite as green as you see to the left. Actually, in the valley it is quite foggy. Just cooked myself a breakfast (I went to the market last night and bought some provisions for long weekend) and have my itunes on shuffle with my Christmas music. Ah, the Dance of the Sugar Plum Fairies.
As my followers know, I have been writing/blogging about Joel Greenblatt's Magic Formula Investing since 2006. I have two series of portfolios (for a total of 8 tranches of five stocks) involving real money. I also have tracking portfolios that I update once a month to gauge how well an investor would have done being in MFI since 2006.
The past week was one of best in a long long time. Haven't done the exact math, but seems like everything went up about 5%. You can't turn on CNBC without seeing an "expert" being asked if people should buy the rally. i am sure these are many of the same experts that said markets would drop 10 to 20% with a Trump win.
i am far from an expert, I may be a reverse indicator when it comes to market timing. But I will say this. Before the Trump win, the market had not gone down or up much in past two years overall. We were stuck in low growth neutral. Some real data is getting better. And for whatever reason, many people are feeling more confident about the economy. And I think the economy is a lot about confidence. If everyone believes the future will improve, then the future often does improve.
MFI Select
Up 5.5% on the week. Not sure anything special going on, this is simply a classic rising tide lifts all boats.
| 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 |
| 10/1/2016 | 42.98% | 198,563 | 155,582 |
| 11/1/2016 | 41.86% | 195,726 | 153,863 |
| 12/1/2016 | 45.92% | 202,775 | 156,859 |
| Current | 54.72% | 214,472 | 159,749 |
In this month by month look (assuming I started with $100k) you can see my acceleration since start of November. Interestingly, I am not at my all time high here even though markets (and R3K as seen by final column) are ringing the bell. I really had a tough start here to 2016 - go read my January writings.
| 2/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VEC | $19.64 | $24.19 | $0.00 | 23.2% | 20.5% |
| QCOM | $45.18 | $68.52 | $2.07 | 56.3% | 20.5% |
| PERI | $2.45 | $1.21 | $0.00 | -50.6% | 20.5% |
| DEPO | $15.34 | $20.20 | $0.00 | 31.7% | 20.5% |
| TDC | $24.02 | $28.60 | $0.00 | 19.1% | 20.5% |
| Totals | 15.9% | 20.5% | |||
| 5/6/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BRCD | $7.97 | $12.38 | $0.17 | 57.4% | 13.0% |
| CBI | $37.82 | $35.50 | $0.00 | -6.1% | 13.0% |
| HSII | $18.51 | $24.00 | $0.26 | 31.1% | 13.0% |
| RHI | $38.51 | $48.47 | $0.66 | 27.6% | 13.0% |
| UTHR | $107.99 | $131.69 | $0.00 | 21.9% | 13.0% |
| Totals | 26.4% | 13.0% | |||
| 8/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $31.20 | $30.06 | $0.26 | -2.8% | 4.9% |
| GNC | $19.79 | $14.40 | $0.19 | -26.3% | 4.9% |
| VLO | $54.73 | $68.00 | $0.60 | 25.3% | 4.9% |
| MSGN | $16.68 | $21.30 | $0.00 | 27.7% | 4.9% |
| GILD | $79.33 | $72.70 | $0.47 | -7.8% | 4.9% |
| Totals | 3.2% | 4.9% | |||
| 11/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MPAA | $26.55 | $28.84 | $0.00 | 8.6% | 4.7% |
| ATHM | $22.61 | $27.54 | $0.00 | 21.8% | 4.7% |
| AMGN | $145.14 | $143.45 | $0.00 | -1.2% | 4.7% |
| RHI | $43.23 | $48.47 | $0.22 | 12.6% | 4.7% |
| CA | $31.11 | $31.68 | $0.00 | 1.8% | 4.7% |
| Totals | 8.7% | 4.7% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 3.2% | 8.7% | 15.9% | 26.4% | 12.0% |
| Previous Tranche | 2.8% | 8.0% | -14.3% | -25.2% | 6.5% |
| Tranche -2 | 11.2% | 69.4% | 8.5% | 18.3% | 26.8% |
| Tranche -3 | 41.4% | 14.2% | 78.3% | 33.0% | 41.7% |
| Tranche -4 | 14.1% | 43.7% | 0.0% | 0.0% | 14.5% |
| MFI Overall Gain | 90.4% | 226.8% | 92.1% | 48.6% | 114.5% |
| Current Balance | 47,603 | 81,699 | 48,018 | 37,152 | 214,472 |
| R3K Current Tranche | 4.9% | 4.7% | 20.5% | 13.0% | 10.8% |
| R3K Overall Gain | 75.3% | 78.5% | 60.5% | 33.0% | 59.7% |
| R3K Balance | 41,779 | 44,614 | 40,118 | 33,238 | 159,749 |
| Annualized IRR | 16.1% | 33.8% | 18.4% | 11.6% | 20.0% |
Looking at the final table here, you see my 20% annualized IRR. If I keep that up, I guess I'll be starting my own "Gates Foundation". My results have really varied by the four quarters, looking at current balance you'll see over $81K for November per stock and just $37K for May. I have wondered if I should "rebalance" amongst the quarters, but have not yet.
Looking at individual tranches, you see one stock can really hurt (like PERI or GNC). Well, I guess we all make mistakes.
Here are my stocks for the week.
| Stock | Last Week | Current | Dividend | Change |
| RHI | 45.56 | 48.47 | - | 6.4% |
| ATHM | 27.09 | 27.54 | - | 1.7% |
| CA | 31.05 | 31.68 | - | 2.0% |
| AMGN | 144.01 | 143.45 | - | -0.4% |
| MPAA | 24.30 | 28.84 | - | 18.7% |
| QCOM | 65.84 | 68.52 | - | 4.1% |
| MSGN | 20.70 | 21.30 | - | 2.9% |
| VLO | 61.46 | 68.00 | - | 10.6% |
| BRCD | 12.36 | 12.38 | 0.06 | 0.6% |
| DEPO | 18.94 | 20.20 | - | 6.7% |
| CSCO | 29.25 | 30.06 | - | 2.8% |
| VEC | 23.08 | 24.19 | - | 4.8% |
| TDC | 26.45 | 28.60 | - | 8.1% |
| GILD | 72.42 | 72.70 | - | 0.4% |
| Average | 5.0% |
Actually, missed a few
| Stock | Last Week | Current | Dividend | Change |
| RHI | 45.56 | 48.47 | - | 6.4% |
| ATHM | 27.09 | 27.54 | - | 1.7% |
| CA | 31.05 | 31.68 | - | 2.0% |
| AMGN | 144.01 | 143.45 | - | -0.4% |
| MPAA | 24.30 | 28.84 | - | 18.7% |
| QCOM | 65.84 | 68.52 | - | 4.1% |
| MSGN | 20.70 | 21.30 | - | 2.9% |
| VLO | 61.46 | 68.00 | - | 10.6% |
| BRCD | 12.36 | 12.38 | 0.06 | 0.6% |
| DEPO | 18.94 | 20.20 | - | 6.7% |
| CSCO | 29.25 | 30.06 | - | 2.8% |
| VEC | 23.08 | 24.19 | - | 4.8% |
| TDC | 26.45 | 28.60 | - | 8.1% |
| GILD | 72.42 | 72.70 | - | 0.4% |
| CBI | 32.10 | 35.50 | 10.6% | |
| GNC | 13.32 | 14.40 | 8.1% | |
| PERI | 1.15 | 1.21 | 5.2% | |
| Average | 5.5% |
MFI Formula
As suggested by the portfolio names, MFI Formula is my series of tranches that I pick by formula. It had a tough stretch at start of 2016, but has been doing quite well of late. It was up 5.4% on the week (rising tide baby).
| 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 |
| 10/1/2016 | -0.85% | 106,377 | 107,230 |
| 11/1/2016 | 0.42% | 105,421 | 105,003 |
| 12/1/2016 | 1.62% | 110,705 | 109,088 |
| Current | 3.65% | 116,593 | 112,939 |
Looking month by month - I was so frustrated with this approach earlier this year. But if you stand back and look at the body of work - in 2016 it has gone from 96,830 to 116,593. Pretty strong.
| 12/31/15 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BBY | $30.31 | $49.00 | $1.57 | 66.8% | 13.1% |
| GME | $28.34 | $26.02 | $1.48 | -3.0% | 13.1% |
| ILG | $15.89 | $18.65 | $0.48 | 20.4% | 13.1% |
| PPC | $22.22 | $19.15 | $2.75 | -1.4% | 13.1% |
| VIAB | $40.93 | $38.62 | $1.00 | -3.2% | 13.1% |
| Totals | 15.9% | 13.1% | |||
| 4/1/16 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CALM | $51.27 | $40.20 | $0.44 | -20.7% | 12.9% |
| HPQ | $12.10 | $15.78 | $0.25 | 32.4% | 12.9% |
| TIME | $15.24 | $17.80 | $0.57 | 20.5% | 12.9% |
| ILG | $13.85 | $18.65 | $0.36 | 37.2% | 12.9% |
| TSRA | $30.79 | $42.90 | $0.60 | 41.3% | 12.9% |
| Totals | 22.1% | 12.9% | |||
| 7/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| ILG | $16.76 | $18.65 | $0.24 | 12.7% | 8.5% |
| VIAB | $44.00 | $38.62 | $0.20 | -11.8% | 8.5% |
| CPLA | $53.22 | $89.90 | $0.39 | 69.7% | 8.5% |
| HRB | $23.62 | $22.95 | $0.44 | -1.0% | 8.5% |
| PBI | $17.69 | $15.84 | $0.38 | -8.3% | 8.5% |
| Totals | 12.3% | 8.5% | |||
| 10/3/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CPLA | $58.15 | $89.90 | $0.00 | 54.6% | 5.6% |
| LDOS | $43.01 | $52.25 | $0.00 | 21.5% | 5.6% |
| GME | $27.70 | $26.02 | $0.37 | -4.7% | 5.6% |
| PBI | $18.15 | $15.84 | $0.19 | -11.7% | 5.6% |
| CSCO | $31.72 | $30.06 | $0.26 | -4.4% | 5.6% |
| Totals | 11.0% | 5.6% | |||
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | 11.0% | 15.9% | 22.1% | 12.3% | 15.3% |
| Previous Tranche | 5.5% | 11.0% | -0.2% | -12.5% | 1.1% |
| Tranche -2 | 0.5% | - | - | - | 0.1% |
| MFI Overall Gain | 17.7% | 28.7% | 21.9% | -1.7% | 16.6% |
| Current Balance | 294,036 | 321,671 | 304,846 | 245,376 | 1,165,929 |
| R3K Current Tranche | 5.6% | 13.1% | 12.9% | 8.5% | 10.0% |
| R3K Overall Gain | 19.3% | 12.8% | 11.6% | 8.2% | 13.0% |
| R3K Balance | 297,917 | 282,042 | 279,245 | 270,197 | 1,129,400 |
| Annualized IRR | 7.7% | 13.8% | 12.3% | -1.2% | 8.8% |
You can see all four tranches are leading - that is a theme I am seeing in MFI everywhere. Value seems back in vogue. People are not just talking about FANG and Tesla anymore. In fact, just picking a bone with CNBC- they spend an inordinate amount of time and energy on a very small sliver of total market.
Just three weeks left of 12/31 tranche. It has a slight lead, hopefully it comes out a winner.
| Stock | Last Week | Current | Dividend | Change |
| ILG | 18.08 | 18.65 | - | 3.2% |
| CPLA | 86.75 | 89.90 | - | 3.6% |
| GME | 24.27 | 26.02 | - | 7.2% |
| VIAB | 36.52 | 38.62 | - | 5.8% |
| BBY | 45.67 | 49.00 | 0.28 | 7.9% |
| PBI | 14.63 | 15.84 | - | 8.3% |
| TSRA | 39.30 | 42.90 | - | 9.2% |
| HPQ | 15.12 | 15.78 | - | 4.4% |
| LDOS | 51.57 | 52.25 | - | 1.3% |
| CSCO | 29.25 | 30.06 | - | 2.8% |
| PPC | 17.69 | 19.15 | - | 8.3% |
| TIME | 16.00 | 17.80 | - | 11.3% |
| HRB | 21.72 | 22.95 | - | 5.7% |
| CALM | 39.65 | 40.20 | - | 1.4% |
| Average | 5.7% |
Another great week for TIME as they announced they are talking to bankers and will start a bidding process. Telling that not a single stock was in the red.
Dividend Stocks
This where new money is going (although I have not bought a single stock anywhere since 11/15). I am 57, trying to create an income stream. Here is a chart of my dividend income by year by quarter. I want to keep it on the trajectory (note these are my real amounts multiplied by a masking factor).
Of course these are all my dividends, not just what I call my dividend portfolio. So MFI Formula stocks, which all have a yield of 2.4% or greater are in these numbers. What makes my dividend portfolio different is I have more than a one year outlook for holding and for many of the names, I reinvest dividends.
| Dividend Stocks | Start | Current | Dividends | Overall Pct Gain | Weekly Pct Gain | 7/1/16 Price | % Chg Since 7/1/16 |
| CSQ | 9.09 | 10.23 | 2.25 | 37.2% | 1.5% | 9.99 | 7.4% |
| AOD | 7.64 | 7.60 | 1.64 | 21.0% | 4.1% | 7.33 | 7.5% |
| SBRA | 22.46 | 24.58 | 0.42 | 11.3% | 9.9% | 22.46 | 9.4% |
| SJT | 7.76 | 6.65 | 0.34 | -9.9% | 4.7% | 7.26 | -6.5% |
| JQC | 7.84 | 8.71 | 0.59 | 18.7% | 1.0% | 8.10 | 10.7% |
| TGONF | 10.24 | 11.80 | 1.85 | 33.4% | 4.4% | 10.05 | 19.1% |
| PSXP | 46.95 | 45.47 | 0.53 | -2.0% | 0.6% | 46.95 | -3.2% |
| PSX | 80.00 | 87.16 | 2.88 | 12.6% | 2.7% | 80.00 | 8.9% |
| DSL | 18.43 | 18.78 | 1.03 | 7.5% | 1.2% | 18.59 | 5.9% |
| GLDI | 10.66 | 9.04 | 0.68 | -8.9% | -1.4% | 10.87 | -11.4% |
| O | 24.07 | 55.61 | 19.36 | 211.5% | 1.6% | 69.64 | -18.4% |
| DHF | 3.11 | 3.30 | 0.03 | 7.0% | 2.8% | 3.11 | 6.1% |
| OIBAX | 5.07 | 5.59 | 2.30 | 55.6% | 0.2% | 5.84 | -2.4% |
| Totals | 18.4% | 4.8% |
Just like everything else, a very good week here. Up 2.6% as these are generally not as high Beta as MFI. SJT is the one I am looking to sell. I had a sell order in this week (at $6.90) but it didn't hit. Actually, I need to fix PSX. Part of my "dividend" is a call premium and it should be capped at $85.
Other Stuff
I do continue to own a number of discretionary items. They were up 12% on the week. I am looking to wind many of these down (less trading, more investing). The big one of course are my BAC Warrants, which is a very long term holding (I first starting buying in April 2013 at $5.10 and I stunningly, in hindsight, bought a bunch in February this year at $3.50). They are now at $10.94.
The warrants are my single largest holding, actually as much as my #2 and #3 (CSQ and AOD) combined. They also represent my largest capital gain ever (basis is $4.21). It is tempting to sell, but they run through 1/19/19 - still a long way off. BAC is at $23 right now, with growth in the economy and some relaxation of regulations $28 to $30 is very, very doable. That would translate to 45% more for me. I still think over the next two years I am best just standing pat.
For that one great buy, I have one total dog - EMG. I am in at $3.56 and it has fallen to $1.41. One of two things has happened here. (1) - we have out and out fraud. In early August they said there were a number of interested parties and book value per share was $7.31 or (2) the market has totally mispriced. For a long time, I just thought the market was wrong. That may end up being a costly thought. I have been doing some case studies - and when management of a public company is desperate, they do at times out and out lie. I'd have a suit against the D&Os, but that is pretty hard to get excited about. Either way, jury is still out, enough of a chance that market has mispriced for me to continue to hold shares.
My other large holding here is SPCB. I am down about 13%, but the stock has really rallied. It was $2.63 headed into October and is now 3.50. This is a stock selling right at book value. Just 18 months ago it was north of $10. I still believe there is substantial upside, so I will likely be patient.
Wrap Up
Ok, rambled long enough. Thanks for sticking around to the end.
Posts
No comments:
Post a Comment