Weekend Update 6/3/17

Weekend Update 6/3/17


Good morning everyone.  Spending a relaxing weekend in New Hampshire.  Thinking about some pancakes at Glen Junction (they are so good).

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

Another week of underperformance for me.  Yes, it is getting a bit frustrating.  But I look out at the White Mountains from my condo and blood pressure drops back down.

The underperformance is value stocks overall, my MFI Index is struggling (I will show table in a second) and my tracking portfolios are really struggling (I will publish more on that this weekend).  So does that mean we should give up?  I do not think so.  My MFI is hanging in there, my problems have been more in my miscellaneous portfolio.  Here is where I stand year to date:

Component	YTD
Overall	+4.54%
Select	+10.18%
Formula	+4.61%
Miscellaneous	-10.70%
Dividend	+5.57%
R3K	+9.17%
MFI Index	-1.26%

Hard to believe the Russell 3000 is up 9% this year.  If I did not know that, I would probably be happy with my 4.5% gain.  But the MFI Index down 1.3%. My Miscellaneous portfolio down 10.7% as BAC warrants were crushed this week.  The bright spot is clearly my MFI select, up over 10% (and that includes a significant cash component).  As another "value" data point, GARIX is up just 2.5% (Gotham MFI mutual fund).  So it is a struggle for value right now (obviously I should have gone 100% TSLA at start of 2017, up a mind-blowing 59% this year!).

Oh well, it is a marathon, not a sprint - as Greenblatt says, the market goes nuts every now and then.

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:

Stock	Last Week	Current	Dividend	Change
MSGN	21.45	21.55	-	0.5%
ATHM	43.03	42.33	-	-1.6%
AKRX	33.21	33.26	-	0.2%
AMGN	155.01	159.15	-	2.7%
MPAA	29.41	29.50	-	0.3%
YY	57.48	59.23	-	3.0%
RHI	45.90	47.34	-	3.1%
CA	31.82	32.19	-	1.2%
WNC	20.88	20.28	-	-2.9%
RGR	63.30	66.05	-	4.3%
KLAC	104.74	105.88	-	1.1%
QCOM	57.52	58.58	-	1.8%
WSTC	23.16	23.19	-	0.1%
TGNA	24.07	23.70	-	-1.6%
TIME	12.10	12.80	-	5.8%
VLO	62.45	62.10	-	-0.6%
CSCO	31.50	31.98		1.5%
GILD	64.50	65.40		1.4%
GNC	7.21	7.58		5.1%

Actually, a very good week.  TGNA did spin off CARS, so I show them with CARS / 3.

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	54.20%	233,693	179,497

Looking at month by month - one can see how well this portfolio has done in 2017, growing from a hypothetical 209,503 to current 233,693.  Looking stock by stock below, you can see AKRX, YY and ATHM have been super strong.

8/15/2016	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$31.20	$31.98	$0.26	3.3%	13.3%
GNC	$19.79	$7.58	$0.38	-59.8%	13.3%
VLO	$54.73	$62.10	$2.00	17.1%	13.3%
MSGN	$16.68	$21.55	$0.00	29.2%	13.3%
GILD	$79.33	$65.40	$1.46	-15.7%	13.3%
Totals				-5.2%	13.3%
11/15/2016	Start	Current	Dividend	Pct Gain	R3K Gain
MPAA	$26.55	$29.50	$0.00	11.1%	13.2%
ATHM	$22.61	$42.33	$0.00	87.2%	13.2%
AMGN	$145.14	$159.15	$2.00	11.0%	13.2%
RHI	$43.23	$47.34	$0.70	11.1%	13.2%
CA	$31.11	$32.19	$0.51	5.1%	13.2%
Totals				25.1%	13.2%
2/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
AKRX	$19.10	$33.26	$0.00	74.1%	7.2%
YY	$41.08	$59.23	$0.00	44.2%	7.2%
KLAC	$85.11	$105.88	$1.08	25.7%	7.2%
WNC	$17.65	$20.28	$0.06	15.2%	7.2%
RGR	$52.75	$66.05	$0.48	26.1%	7.2%
Totals				37.1%	7.2%
5/6/2017	Start	Current	Dividend	Pct Gain	R3K Gain
WSTC	$24.15	$23.19	$0.00	-4.0%	1.7%
TGNA	$25.75	$23.70	$0.00	-8.0%	1.7%
TIME	$15.05	$12.80	$0.00	-15.0%	1.7%
MSGN	$23.55	$21.55	$0.00	-8.5%	1.7%
QCOM	$54.93	$58.58	$0.57	7.7%	1.7%
Totals				-5.5%	1.7%

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	-5.2%	25.1%	37.1%	-5.5%	14.1%
Previous Tranche	2.8%	8.0%	10.7%	19.1%	8.3%
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	74.9%	276.0%	151.5%	32.3%	133.7%
Current Balance	43,727	94,001	62,882	33,083	233,693
R3K Current Tranche	13.3%	13.2%	7.2%	1.7%	8.9%
R3K Overall Gain	89.4%	92.9%	73.5%	62.3%	79.5%
R3K Balance	47,347	48,217	43,368	40,565	179,497
Annualized IRR	12.3%	33.7%	23.7%	7.1%	19.2%

MFI Formula

Same charts, less chatter as I am short on time.

Stock	Last Week	Current	Dividend	Change
CPLA	87.90	88.30	-	0.5%
GILD	64.50	65.40	-	1.4%
SYNT	18.16	17.39	-	-4.2%
CSCO	31.50	31.98	-	1.5%
TGNA	24.07	23.70	-	-1.6%
HPQ	18.47	18.98	-	2.8%
CA	31.82	32.19	-	1.2%
PBI	14.93	15.18	-	1.7%
OMC	83.26	85.12	-	2.2%
BKE	16.80	17.10	-	1.8%
LDOS	54.88	55.95	-	1.9%
ILG	26.85	27.16	-	1.2%
VIAB	35.13	35.25	-	0.3%
HRB	26.11	26.89	-	3.0%
GME	22.22	22.67		2.0%

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	-2.94%	119,092	122,032

7/1/2016	Start	Current	Dividend	Pct Gain	R3K Gain
ILG	$16.76	$27.16	$0.39	64.4%	17.2%
VIAB	$44.00	$35.25	$0.60	-18.5%	17.2%
CPLA	$53.22	$88.30	$1.62	69.0%	17.2%
HRB	$23.62	$26.89	$0.66	16.6%	17.2%
PBI	$17.69	$15.18	$0.75	-9.9%	17.2%
Totals				24.3%	17.2%
10/3/2016	Start	Current	Dividend	Pct Gain	R3K Gain
CPLA	$58.15	$88.30	$1.23	54.0%	14.1%
LDOS	$43.01	$55.95	$0.64	31.6%	14.1%
GME	$27.70	$22.67	$0.75	-15.5%	14.1%
PBI	$18.15	$15.18	$0.56	-13.3%	14.1%
CSCO	$31.72	$31.98	$0.81	3.4%	14.1%
Totals				12.0%	14.1%
12/30/2016	Start	Current	Dividend	Pct Gain	R3K Gain
GILD	$71.69	$65.40	$0.52	-8.0%	9.0%
HPQ	$15.00	$18.98	$0.27	28.3%	9.0%
TGNA	$21.33	$23.70	$0.14	11.8%	9.0%
CA	$31.99	$32.19	$0.51	2.2%	9.0%
SYNT	$19.79	$17.39	$0.00	-12.1%	9.0%
Totals				4.4%	9.0%
4/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$18.45	$17.10	$0.25	-6.0%	3.4%
CSCO	$33.76	$31.98	$0.29	-4.4%	3.4%
GILD	$67.50	$65.40	$0.00	-3.1%	3.4%
OMC	$85.53	$85.12	$0.00	-0.5%	3.4%
SYNT	$16.76	$17.39	$0.00	3.8%	3.4%
Totals				-2.0%	3.4%

Category/Tranche	October	January	April	July	Total
Initial Investment	249,820	249,939	250,180	249,728	999,667
Current Tranche	12.0%	4.4%	-2.0%	24.3%	7.2%
Previous Tranche	5.5%	9.3%	25.2%	-12.5%	8.1%
Tranche -2	0.5%	11.0%	-0.2%	-	2.8%
MFI Overall Gain	18.7%	26.7%	22.3%	8.8%	19.1%
Current Balance	296,657	316,568	305,986	271,705	1,190,915
R3K Current Tranche	14.1%	9.0%	3.4%	17.2%	10.9%
R3K Overall Gain	28.9%	21.9%	20.6%	16.9%	22.1%
R3K Balance	321,975	304,641	301,752	291,941	1,220,309
Annualized IRR	6.6%	10.2%	9.7%	4.5%	7.7%