Good morning everyone. Back home, so that is nice. Listening to Pandora/Christmas tunes, drinking some fresh hot coffee and watching our first real snow storm of the season.
For those new to my blog, welcome. I have been tracking magic formula investing (per Joel Greenblatt) since 2006. I went with real money for a number of years and then stopped. I re-booted based on my analysis of data I have gathered and tracked in August 2012 and have been pretty successful.
This blog follows two groups of real money in MFI - one is purely based on my making selections four times a year and the second is formula based four times a year. I also track here my other (non-mfi) investing. Finally, once a month or so, I discuss tracking portfolios that I create monthly to see how MFI is doing in total.
Overview
This was not a great week. I was down 2.3% overall, compared to index being down 1.8%. The issue was in my speculative portfolio, which I am frankly phasing out as I am not doing very well (better at investing than trading). But the Formula approach was down 1.8%, Select approach down 1.0%, Dividend approach down just 0.4%. My speculative piece was down 8%, mostly from the cratering of gold. (overall now up 13.25% - almost exactly on par with market).
MFI Select
A decent week here (in the grand scheme).
| Stock | Last Week | Current | Dividend | Change |
| RHI | 48.47 | 48.51 | - | 0.1% |
| ATHM | 27.54 | 26.10 | - | -5.2% |
| CA | 31.68 | 32.02 | - | 1.1% |
| AMGN | 143.45 | 149.37 | - | 4.1% |
| MPAA | 28.84 | 26.40 | - | -8.5% |
| QCOM | 68.52 | 66.46 | - | -3.0% |
| MSGN | 21.30 | 21.20 | - | -0.5% |
| VLO | 68.00 | 68.00 | - | 0.0% |
| BRCD | 12.38 | 12.46 | 0.06 | 1.1% |
| DEPO | 20.20 | 18.57 | - | -8.1% |
| CSCO | 30.06 | 30.59 | - | 1.8% |
| VEC | 24.19 | 23.41 | - | -3.2% |
| TDC | 28.60 | 28.23 | - | -1.3% |
| GILD | 72.70 | 74.10 | - | 1.9% |
| CBI | 35.50 | 35.24 | -0.7% | |
| GNC | 14.40 | 13.02 | -9.6% | |
| PERI | 1.21 | 1.22 | 0.8% | |
| Average | -1.7% |
Hmm, certainly feels worse than down 1%. But straight averages can be deceiving. You need to know how much $ I have in each of these stocks. GNC for example, is already down a ton, so another 9% doesn't hurt as much any more (though certainly my feet are not smailing).
| 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 | 52.30% | 211,876 | 159,580 |
Looking month by month, you can see that despite the pullback this week - December has still been good. And a 52% lead (over 4 years of investing) over the R3K is strong.
| 2/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| VEC | $19.64 | $23.41 | $0.00 | 19.2% | 20.2% |
| QCOM | $45.18 | $66.46 | $2.07 | 51.7% | 20.2% |
| PERI | $2.45 | $1.22 | $0.00 | -50.2% | 20.2% |
| DEPO | $15.34 | $18.57 | $0.00 | 21.1% | 20.2% |
| TDC | $24.02 | $28.23 | $0.00 | 17.5% | 20.2% |
| Totals | 11.9% | 20.2% | |||
| 5/6/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BRCD | $7.97 | $12.46 | $0.17 | 58.4% | 12.7% |
| CBI | $37.82 | $35.24 | $0.00 | -6.8% | 12.7% |
| HSII | $18.51 | $24.45 | $0.26 | 33.5% | 12.7% |
| RHI | $38.51 | $48.51 | $0.66 | 27.7% | 12.7% |
| UTHR | $107.99 | $144.54 | $0.00 | 33.8% | 12.7% |
| Totals | 29.3% | 12.7% | |||
| 8/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $31.20 | $30.59 | $0.26 | -1.1% | 4.7% |
| GNC | $19.79 | $13.02 | $0.38 | -32.3% | 4.7% |
| VLO | $54.73 | $68.00 | $0.60 | 25.3% | 4.7% |
| MSGN | $16.68 | $21.20 | $0.00 | 27.1% | 4.7% |
| GILD | $79.33 | $74.10 | $0.94 | -5.4% | 4.7% |
| Totals | 2.7% | 4.7% | |||
| 11/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MPAA | $26.55 | $26.40 | $0.00 | -0.6% | 4.5% |
| ATHM | $22.61 | $26.10 | $0.00 | 15.4% | 4.5% |
| AMGN | $145.14 | $149.37 | $0.00 | 2.9% | 4.5% |
| RHI | $43.23 | $48.51 | $0.22 | 12.7% | 4.5% |
| CA | $31.11 | $32.02 | $0.00 | 2.9% | 4.5% |
| Totals | 6.7% | 4.5% | |||
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 2.7% | 6.7% | 11.9% | 29.3% | 10.9% |
| Previous Tranche | 2.8% | 8.0% | -14.3% | -25.2% | 6.3% |
| 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 | 89.5% | 220.6% | 85.3% | 52.1% | 111.9% |
| Current Balance | 47,367 | 80,152 | 46,337 | 38,019 | 211,876 |
| R3K Current Tranche | 4.7% | 4.5% | 20.2% | 12.7% | 10.5% |
| R3K Overall Gain | 74.9% | 78.1% | 60.2% | 33.0% | 59.6% |
| R3K Balance | 41,779 | 44,525 | 40,039 | 33,238 | 159,580 |
| Annualized IRR | 15.9% | 32.9% | 17.3% | 12.3% | 19.6% |
Looking through the open tranches and the summary table, you can see that while I have an overall lead, the open tranches are a push (10.9% to 10.5%). This is actually underperforming MFI right now as I'd say the lead in my open tracking portfolios is 3 to 4 points.
MFI Formula
| Stock | Last Week | Current | Dividend | Change |
| ILG | 18.65 | 18.06 | - | -3.2% |
| CPLA | 89.90 | 88.05 | - | -2.1% |
| GME | 26.02 | 25.42 | - | -2.3% |
| VIAB | 38.62 | 35.22 | - | -8.8% |
| BBY | 49.00 | 47.00 | 0.28 | -3.5% |
| PBI | 15.84 | 15.80 | - | -0.3% |
| TSRA | 42.90 | 44.75 | - | 4.3% |
| HPQ | 15.78 | 15.05 | - | -4.6% |
| LDOS | 52.25 | 51.17 | - | -2.1% |
| CSCO | 30.06 | 30.59 | - | 1.8% |
| PPC | 19.15 | 18.31 | - | -4.4% |
| TIME | 17.80 | 17.65 | - | -0.8% |
| HRB | 22.95 | 23.45 | - | 2.2% |
| CALM | 40.20 | 43.25 | - | 7.6% |
| Average | -1.2% |
Again, down about 1.7% here as straight averages can be a bit deceptive. CBS announced they were not exploring merger with VIAB, so that explains 8% drop. CALM really moved up nicely, maybe egg prices are finally increasing.
| 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 | 1.75% | 114,465 | 112,715 |
After two years, not a huge advantage over benchmark. I am convinced that over longer periods, this approach will (ahem) pay dividends.
| 12/31/15 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| BBY | $30.31 | $47.00 | $1.57 | 60.2% | 12.9% |
| GME | $28.34 | $25.42 | $1.48 | -5.1% | 12.9% |
| ILG | $15.89 | $18.06 | $0.48 | 16.7% | 12.9% |
| PPC | $22.22 | $18.31 | $2.75 | -5.2% | 12.9% |
| VIAB | $40.93 | $35.22 | $1.20 | -11.0% | 12.9% |
| Totals | 11.1% | 12.9% | |||
| 4/1/16 Stocks | Start | Current | Dividend | Pct Gain | R3K Gain |
| CALM | $51.27 | $43.25 | $0.44 | -14.8% | 12.6% |
| HPQ | $12.10 | $15.05 | $0.38 | 27.4% | 12.6% |
| TIME | $15.24 | $17.65 | $0.57 | 19.5% | 12.6% |
| ILG | $13.85 | $18.06 | $0.36 | 33.0% | 12.6% |
| TSRA | $30.79 | $44.75 | $0.60 | 47.3% | 12.6% |
| Totals | 22.5% | 12.6% | |||
| 7/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| ILG | $16.76 | $18.06 | $0.24 | 9.2% | 8.3% |
| VIAB | $44.00 | $35.22 | $0.40 | -19.0% | 8.3% |
| CPLA | $53.22 | $88.05 | $0.39 | 66.2% | 8.3% |
| HRB | $23.62 | $23.45 | $0.44 | 1.1% | 8.3% |
| PBI | $17.69 | $15.80 | $0.38 | -8.6% | 8.3% |
| Totals | 9.8% | 8.3% | |||
| 10/3/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CPLA | $58.15 | $88.05 | $0.00 | 51.4% | 5.4% |
| LDOS | $43.01 | $51.17 | $0.00 | 19.0% | 5.4% |
| GME | $27.70 | $25.42 | $0.37 | -6.9% | 5.4% |
| PBI | $18.15 | $15.80 | $0.19 | -11.9% | 5.4% |
| CSCO | $31.72 | $30.59 | $0.26 | -2.7% | 5.4% |
| Totals | 9.8% | 5.4% | |||
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | 9.8% | 11.1% | 22.5% | 9.8% | 13.2% |
| Previous Tranche | 5.5% | 11.0% | -0.2% | -12.5% | 1.1% |
| Tranche -2 | 0.5% | - | - | - | 0.1% |
| MFI Overall Gain | 16.3% | 23.4% | 22.2% | -3.9% | 14.5% |
| Current Balance | 290,642 | 308,337 | 305,703 | 239,964 | 1,144,646 |
| R3K Current Tranche | 5.4% | 12.9% | 12.6% | 8.3% | 9.8% |
| R3K Overall Gain | 19.0% | 12.6% | 11.4% | 8.0% | 12.8% |
| R3K Balance | 297,321 | 281,485 | 278,691 | 269,658 | 1,127,154 |
| Annualized IRR | 7.1% | 11.3% | 12.4% | -2.7% | 7.6% |
You can see 2016 has been a strong year (month by month table shows 96,830 to 1,144,464) as open tranches are up 13.2% versus 9.8% for open benchmark. There is the 3 to 4 point advantage I am seeing in MFI in total.
Dividend Stocks/Income Securities
Decent showing here, only down about 0.5%. This is becoming my largest holding as I start thinking about developing income stream for retirement.
| Dividend Stocks | Start | Current | Dividends | Overall Pct Gain | Weekly Pct Gain | 7/1/16 Price | % Chg Since 7/1/16 |
| CSQ | 9.10 | 10.34 | 2.23 | 38.1% | 1.1% | 9.99 | 8.5% |
| AOD | 7.64 | 7.63 | 1.64 | 21.4% | 0.4% | 7.33 | 7.9% |
| SBRA | 22.46 | 23.62 | 0.41 | 7.0% | -3.9% | 22.46 | 5.2% |
| SJT | 7.76 | 6.32 | 0.34 | -14.1% | -5.0% | 7.26 | -11.0% |
| JQC | 7.84 | 8.70 | 0.65 | 19.3% | -0.1% | 8.10 | 11.2% |
| TGONF | 10.24 | 11.75 | 1.85 | 32.9% | -0.4% | 10.05 | 18.6% |
| PSXP | 46.95 | 46.48 | 0.53 | 0.1% | 2.2% | 46.95 | -1.0% |
| PSX | 80.00 | 85.00 | 2.88 | 9.9% | 0.0% | 80.00 | 6.3% |
| DSL | 18.43 | 18.41 | 1.03 | 5.5% | -2.0% | 18.59 | 3.9% |
| GLDI | 10.66 | 8.86 | 0.68 | -10.6% | -2.0% | 10.87 | -13.1% |
| O | 24.18 | 55.47 | 19.29 | 209.2% | -0.3% | 69.64 | -18.6% |
| DHF | 3.11 | 3.29 | 0.03 | 6.6% | -0.3% | 3.11 | 5.8% |
| OIBAX | 5.07 | 5.56 | 2.30 | 55.0% | -0.5% | 5.84 | -2.9% |
| Totals | 17.6% | 4.0% |
CSQ and AOD are my largest holdings. So nice to see them hanging in there. I continue to look to dissolve SJT. I will probably switch near start of 2017 to another energy play (like PEO). Not trying to get rich here - just a steady income. PSX is locked at $85 as I sold calls.
Speculative
As I mentioned, I was down due to some gold mining plays and BAC warrants finally flattened out. This portfolio has actually beenvery good this year (up 24%), largely because my very largest position (by a lot), the BAC warrants, are up 83% in 2016. I do plan to hold them into 2019. My other positions (like the gold miners, SPCB and EMG) are too speculative and I will look to exit - I will likely take the proceeds and increase funding of MFI Formula and prehaps dividend stocks.
So all-in-all, I am happy. Investments are going relatively well. I have made some mistakes, but also made some strong moves. Life is changing as I look towards 58 and my youngest child finishes Senior year of HS.
I think my real plan is to only buy/sell stocks eight times a year (when the various MFI tranches hit anniversaries). All the trading can be "fun" but doesn't really add value and I'd argue adds stress at times. I don't really need that at this point in my life.
Have a great weekend.
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