Good morning everyone. July 4th is in front of us, great time to fire up the grill and then go see some fireworks. Hard to believe we are at the 1/2 point for 2017. And as the Beatles told us, "things are getting a little bit better all the time." I will also be bidding adios to my July 1st 2016 tranche. I will close it out and hopefully pick a new one on Monday. We'll see as I am driving to Pittsburgh.
You have found your way to The MFI Diary, a blog I have been maintaining since 2006 (MFI being magic formula investing from The Little Book That Beats the Market by Joel Greenblatt). .In it I track performance of my own actual MFI investments along with detailed tracking of picking stocks from the MFI screen and my MFI Index (an index comprised of 50 stocks from screen and reconstituted once a year).
People need to know I am just a guy with a spreadsheet, no finance expertise. So please use what I write for information/entertainment - but if you choose to buy some of the names I buy you should do your own due diligence.
Past Week
Like last week, things have been clicking of late. I have closed a ton of ground on the index in the past two weeks.
| Component | YTD |
| Overall | +7.16% |
| Select | +11.96% |
| Formula | +4.70% |
| Miscellaneous | -1.14% |
| Dividend | +8.51% |
| R3K | +8.73% |
| MFI Index | +2.49% |
So overall I am up 7.1% this year. While that trails R3K benchmark (8.7%), I have had about a 20% cash component during the year. You can also see my MFI Select is up almost 12% - hey, not too shabby. My MFI Formula approach is up 4.7%. The MFI Index is struggling at just 2.5%. GARIX is similar, up 2%. I was helped a bunch by BAC warrants this week, up over 10% with announcement of increased dividend and share buyback.
I also added to my dividend portfolio this week. I bought KCLI, a lightly traded life insurer that trades way under book value for $49. They have a 2.2% dividend. Not exciting, but strikes me as a very, very safe stock - has a margin of safety. Then I doubled my position in DHF and JQC. I will likely be adding to other dividend positions in 2nd half of the year. I am really starting to realize retirement just is not that far away - I regret selling my CSQ and AOD - and will likely buy them back on any sort of pullback.
MFI Select
I have two MFI portfolios - "Select" and "Formula", each consisting of 4 tranches of five stocks. Select has been running since August 2012 when I performed my MFI reboot (after sitting out for a year). It has been very successful. It is pretty free form, I can pick whatever stocks I want, from the official screen or my homemade screen (which always seems to pick up a few names omitted from official screen).
Here are individual stocks for the week:
Here are individual stocks for the week:
| Stock | Last Week | Current | Dividend | Change |
| MSGN | 22.00 | 22.45 | - | 2.0% |
| ATHM | 45.47 | 45.36 | - | -0.2% |
| AKRX | 33.53 | 33.54 | - | 0.0% |
| AMGN | 172.50 | 172.23 | - | -0.2% |
| MPAA | 28.32 | 28.24 | - | -0.3% |
| YY | 58.80 | 58.03 | - | -1.3% |
| RHI | 47.46 | 47.93 | - | 1.0% |
| CA | 34.98 | 34.47 | - | -1.5% |
| WNC | 21.65 | 21.98 | - | 1.5% |
| RGR | 66.60 | 62.15 | - | -6.7% |
| KLAC | 97.95 | 91.51 | - | -6.6% |
| QCOM | 56.91 | 55.22 | - | -3.0% |
| WSTC | 23.21 | 23.32 | - | 0.5% |
| TGNA | 23.95 | 23.29 | - | -2.8% |
| TIME | 13.60 | 14.35 | - | 5.5% |
| VLO | 65.98 | 67.46 | - | 2.2% |
| CSCO | 32.09 | 31.30 | -2.5% | |
| GILD | 70.52 | 70.78 | 0.4% | |
| GNC | 7.54 | 8.43 | 11.8% |
Wow, I did not realize GNC popped so much. They are still my smallest position as I am way under water with them. KLAC is really getting to be a bargain. TIME has actually been a on a decent roll -it is up 21% in past month.
Here are my 4 tranches:
| 8/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $31.20 | $31.30 | $0.26 | 1.2% | 12.9% |
| GNC | $19.79 | $8.43 | $0.38 | -55.5% | 12.9% |
| VLO | $54.73 | $67.46 | $2.00 | 26.9% | 12.9% |
| MSGN | $16.68 | $22.45 | $0.00 | 34.6% | 12.9% |
| GILD | $79.33 | $70.78 | $1.98 | -8.3% | 12.9% |
| Totals | -0.2% | 12.9% | |||
| 11/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MPAA | $26.55 | $28.24 | $0.00 | 6.4% | 12.7% |
| ATHM | $22.61 | $45.36 | $0.00 | 100.6% | 12.7% |
| AMGN | $145.14 | $172.23 | $2.00 | 20.0% | 12.7% |
| RHI | $43.23 | $47.93 | $0.70 | 12.5% | 12.7% |
| CA | $31.11 | $34.47 | $0.51 | 12.4% | 12.7% |
| Totals | 30.4% | 12.7% | |||
| 2/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AKRX | $19.10 | $33.54 | $0.00 | 75.6% | 6.8% |
| YY | $41.08 | $58.03 | $0.00 | 41.3% | 6.8% |
| KLAC | $85.11 | $91.51 | $1.08 | 8.8% | 6.8% |
| WNC | $17.65 | $21.98 | $0.06 | 24.9% | 6.8% |
| RGR | $52.75 | $62.15 | $0.92 | 19.6% | 6.8% |
| Totals | 34.0% | 6.8% | |||
| 5/6/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| WSTC | $24.15 | $23.32 | $0.00 | -3.4% | 1.3% |
| TGNA | $25.75 | $23.29 | $0.07 | -9.3% | 1.3% |
| TIME | $15.05 | $14.35 | $0.04 | -4.4% | 1.3% |
| MSGN | $23.55 | $22.45 | $0.00 | -4.7% | 1.3% |
| QCOM | $54.93 | $55.22 | $0.57 | 1.6% | 1.3% |
| Totals | -4.0% | 1.3% |
The May tranche continues to be a mess - down 4%. August just has the -55% GNC albatross. Then the other two quarter tranches are great.
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | -0.2% | 30.4% | 34.0% | -4.0% | 16.2% |
| Previous Tranche | 2.8% | 8.0% | 10.7% | 19.1% | 8.7% |
| Tranche -2 | 11.2% | 69.4% | -14.3% | -25.2% | 10.3% |
| Tranche -3 | 41.4% | 14.2% | 8.5% | 18.3% | 20.6% |
| Tranche -4 | 14.1% | 43.7% | 78.3% | 33.0% | 42.3% |
| MFI Overall Gain | 84.0% | 291.8% | 145.9% | 34.4% | 139.1% |
| Current Balance | 46,009 | 97,962 | 61,481 | 33,608 | 239,060 |
| R3K Current Tranche | 12.9% | 12.7% | 6.8% | 1.3% | 8.4% |
| R3K Overall Gain | 88.6% | 92.1% | 72.8% | 61.6% | 78.8% |
| R3K Balance | 47,159 | 48,026 | 43,195 | 40,402 | 178,782 |
| Annualized IRR | 13.3% | 34.3% | 22.6% | 7.4% | 19.4% |
Still loving this table. In under 5 years $100,000 would have become $239,060. Not shabby. Then here is month by month:
| 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 |
| 1/1/2017 | 45.60% | 209,503 | 163,936 |
| 2/1/2017 | 45.20% | 212,330 | 167,146 |
| 3/1/2017 | 48.80% | 222,583 | 173,829 |
| 4/1/2017 | 55.70% | 229,473 | 173,735 |
| 5/1/2017 | 55.80% | 231,497 | 175,712 |
| 6/1/2017 | 53.40% | 230,599 | 177,203 |
| Current | 60.28% | 239,060 | 178,782 |
Guess June is done. It was a good month for the select portfolio.
MFI Formula
Same tables. I'll go faster.
| Stock | Last Week | Current | Dividend | Change |
| CPLA | 85.90 | 85.60 | - | -0.3% |
| GILD | 70.52 | 70.78 | - | 0.4% |
| SYNT | 16.51 | 16.96 | - | 2.7% |
| CSCO | 32.09 | 31.30 | - | -2.5% |
| TGNA | 23.95 | 23.29 | - | -2.8% |
| HPQ | 17.80 | 17.48 | - | -1.8% |
| CA | 34.98 | 34.47 | - | -1.5% |
| PBI | 15.08 | 15.10 | - | 0.1% |
| OMC | 82.37 | 82.90 | - | 0.6% |
| BKE | 16.80 | 17.80 | - | 6.0% |
| LDOS | 53.56 | 51.69 | - | -3.5% |
| ILG | 27.86 | 27.49 | - | -1.3% |
| VIAB | 34.11 | 33.57 | - | -1.6% |
| HRB | 31.25 | 30.91 | - | -1.1% |
| GME | 20.65 | 21.61 | - | 4.6% |
Overall, pretty flat while the benchmark was down.
| 7/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| ILG | $16.76 | $27.49 | $0.54 | 67.2% | 16.8% |
| VIAB | $44.00 | $33.57 | $0.80 | -21.9% | 16.8% |
| CPLA | $53.22 | $85.60 | $1.62 | 63.9% | 16.8% |
| HRB | $23.62 | $30.91 | $0.90 | 34.7% | 16.8% |
| PBI | $17.69 | $15.10 | $0.75 | -10.4% | 16.8% |
| Totals | 26.7% | 16.8% | |||
| 10/3/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CPLA | $58.15 | $85.60 | $1.23 | 49.3% | 13.7% |
| LDOS | $43.01 | $51.69 | $0.96 | 22.4% | 13.7% |
| GME | $27.70 | $21.61 | $1.13 | -17.9% | 13.7% |
| PBI | $18.15 | $15.10 | $0.56 | -13.7% | 13.7% |
| CSCO | $31.72 | $31.30 | $0.81 | 1.2% | 13.7% |
| Totals | 8.3% | 13.7% | |||
| 12/30/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GILD | $71.69 | $70.78 | $1.04 | 0.2% | 8.6% |
| HPQ | $15.00 | $17.48 | $0.40 | 19.2% | 8.6% |
| TGNA | $21.33 | $23.29 | $0.21 | 10.2% | 8.6% |
| CA | $31.99 | $34.47 | $0.51 | 9.3% | 8.6% |
| SYNT | $19.79 | $16.96 | $0.00 | -14.3% | 8.6% |
| Totals | 4.9% | 8.6% | |||
| 4/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $18.45 | $17.80 | $0.25 | -2.2% | 2.9% |
| CSCO | $33.76 | $31.30 | $0.29 | -6.4% | 2.9% |
| GILD | $67.50 | $70.78 | $0.52 | 5.6% | 2.9% |
| OMC | $85.53 | $82.90 | $0.55 | -2.4% | 2.9% |
| SYNT | $16.76 | $16.96 | $0.00 | 1.2% | 2.9% |
| Totals | -0.8% | 2.9% |
Only winning tranche here is July - that will be starting at scratch on Monday. I will write up more on the July 1st tranche (as well as my standard review of all closed tranches) later this long weekend.
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | 8.3% | 4.9% | -0.8% | 26.7% | 7.3% |
| Previous Tranche | 5.5% | 9.3% | 25.2% | -12.5% | 8.0% |
| Tranche -2 | 0.5% | 11.0% | -0.2% | - | 2.8% |
| MFI Overall Gain | 14.8% | 27.3% | 23.8% | 10.9% | 19.2% |
| Current Balance | 286,678 | 318,068 | 309,735 | 276,956 | 1,191,437 |
| R3K Current Tranche | 13.7% | 8.6% | 2.9% | 16.8% | 10.5% |
| R3K Overall Gain | 28.4% | 21.4% | 20.1% | 16.4% | 21.6% |
| R3K Balance | 320,695 | 303,424 | 300,541 | 290,784 | 1,215,444 |
| Annualized IRR | 5.1% | 10.1% | 9.9% | 5.3% | 7.6% |
You can see current tranche continues to be a struggle - trailing 7.3% to 10.5%. But I still have faith and will be increasing my $ commitment next week.
| 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 |
| 1/1/2017 | 1.57% | 113,406 | 111,832 |
| 2/1/2017 | 1.32% | 114,809 | 113,486 |
| 3/1/2017 | -5.09% | 112,930 | 118,024 |
| 4/1/2017 | -1.86% | 116,227 | 118,091 |
| 5/1/2017 | 1.11% | 120,403 | 119,296 |
| 6/1/2017 | -2.65% | 117,824 | 120,472 |
| Current | -2.40% | 119,144 | 121,545 |
So trailing overall by two points. But you can see the struggle in 2017 going from a 1.57% lead to 2.4% deficit.
Dividend & Miscellaneous
As I said, I am building my dividend portfolio back up. It has done very well in 2017, up over 8%.
| Stock | Initial | Current | Div/Sh | Gain/Loss | Yield |
| JQC | 8.20 | 8.61 | 0.49 | 11% | 7.3% |
| TK | 5.24 | 6.67 | - | 27% | 3.3% |
| PSXP | 48.20 | 49.42 | - | 3% | 4.7% |
| TGONF | 10.47 | 13.00 | 1.97 | 43% | 5.3% |
| DHF | 3.34 | 3.50 | 0.07 | 7% | 9.3% |
| FDEU | 18.21 | 18.81 | 0.12 | 4% | 7.7% |
| SBRA | 24.01 | 24.10 | 0.43 | 2% | 7.1% |
| NRZ | 16.51 | 15.56 | 0.50 | -3% | 12.9% |
| RILY | 13.85 | 18.55 | - | 34% | 1.7% |
| DSL | 18.49 | 20.65 | 1.86 | 22% | 8.7% |
| KCLI | 49.00 | 49.50 | - | 1% | 2.2% |
| O | 24.91 | 55.18 | 20.12 | 202% | 4.6% |
| OIBAX | 5.09 | 5.87 | 2.38 | 0.62 | 4.0% |
Recall that this is not the worlds best table. I double my JQC today, so it has moved to #1 as it is now my largest dividend holding. But now is shows an 11% gain, but a week ago that was more like 20%. It gets watered down by my having 50% right now at 0%. I am frankly not motivated to make a better table here as this is not the dividend investor blog.
Here is a table showing my dividend growth over time, assuming it was $100,000 in first year:
So I have definitely had growth - but 2017 has fallen back a bit. I am committed to building that back.
Not much to say on Misc. I sold all my gold holdings. I have a few positions counting on buyouts (CA, WBMD and NXPI). Then I have some riskier plays - biotech and microcaps. We will see. It has become smaller as dividend portfolio has increased.
Posts
