Weekend Update 8/19/17

Weekend Update

Market volatility popped up a bit this week.  People perhaps worried about Washington politics.  But perhaps just a bit edgy about future earnings and valuation.

Not a very good week for me, although I am revising the way I am grading myself.  I had been noticing that my miscellaneous portfolio was looking worse than I expected and that my dividend portfolio was looking better.  It is really because I have added a fair amount of cash to both portfolios over the past month (post retirement) and the way I did it in my spreadsheet was treating them both as leveraged.  So my dividend portfolio, which was positive, became more positive due to leverage and misc, which was negative was exacerbated.

I have fixed that.  All of this noise did not impact my MFI numbers - I had plans at the start of the year on how I was going to add $ to those portfolios and I have not deviated.

You have found your way to the MFI Diary, a blog where I let readers know my thoughts and performance on real life, real dollar Magic Formula Portfolios (based of course on "The Little Book The Beats The Market" by Joel Greenblatt.  I also spend some effort tracking hypothetical portfolios based on downloads from the official website going back to January 2006.

Of course, I have to have a disclaimer - I am just a guy with a spreadsheet and not a stock advisor.  You should do your own due diligence before acting on anything you read here.

The Past Week

Like I said, it was a tough week.

Component	YTD
Overall	+6.70%
Select	+12.61%
Formula	+2.37%
Miscellaneous	-1.09%
Dividend	+10.37%
R3K	+8.60%
MFI Index	-4.33%

Wow,  look at the MFI Index.  Now down 4.3% on the year.  Greenblatt told it is would not work often - he may have been more right than he expected.  Here are my MFI STocks for the week.

SYNT	18.26	18.01	-	-1.4%
CSCO	31.47	30.37	-	-3.5%
HPQ	18.90	18.51	-	-2.1%
GILD	72.40	72.11	-	-0.4%
GME	21.76	21.22	-	-2.5%
CA	31.99	32.37	-	1.2%
TGNA	21.26	20.61	-	-3.0%
OMC	77.75	76.76	-	-1.3%
CPLA	66.95	67.00	-	0.1%
BKE	15.60	14.05	-	-9.9%
RGR	50.00	49.25	-	-1.5%
LDOS	56.68	55.34	-	-2.4%
PBI	12.68	12.74	-	0.5%

BKE really reflected retail selloff.  Not unexpected, I wrote about the likelihood of that back in February... but it seems oversold to me.  CSCO also had a tough week. Really, not much good in this table.  Here are my Select picks:

Stock	Last Week	Current	Dividend	Change
ATHM	61.52	64.41	-	4.7%
RHI	43.41	43.33	-	-0.2%
YY	78.92	73.69	-	-6.6%
AKRX	33.31	31.98	-	-4.0%
AMGN	169.43	167.29	-	-1.3%
CA	31.99	32.37	-	1.2%
ICHR	19.80	20.36	-	2.8%
WNC	20.59	20.51	-	-0.4%
SIMO	43.05	42.72	-	-0.8%
MPAA	26.92	24.74	-	-8.1%
MD	43.00	42.27	-	-1.7%
GHC	591.10	574.70	-	-2.8%
WSTC	23.34	23.34	-	0.0%
QCOM	52.72	51.92	-	-1.5%
KLAC	90.34	90.26	-	-0.1%
MSGN	20.70	20.55	-	-0.7%
TGNA	21.26	20.61	-	-3.0%
RGR	50.00	49.25		-1.5%
TIME	13.55	12.35		-8.9%

Hmmm, equally crummy.

MFI Select

Going to go fast today.

11/15/2016	Start	Current	Dividend	Pct Gain	R3K Gain
MPAA	$26.55	$24.74	$0.00	-6.8%	12.6%
ATHM	$22.61	$64.41	$0.00	184.9%	12.6%
AMGN	$145.14	$167.29	$3.15	17.4%	12.6%
RHI	$43.23	$43.33	$0.70	1.9%	12.6%
CA	$31.11	$32.37	$0.51	5.7%	12.6%
Totals				40.6%	12.6%
2/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
AKRX	$19.10	$31.98	$0.00	67.4%	6.7%
YY	$41.08	$73.69	$0.00	79.4%	6.7%
KLAC	$85.11	$90.26	$0.00	6.1%	6.7%
WNC	$17.65	$20.51	$0.06	16.5%	6.7%
RGR	$52.75	$49.25	$1.15	-4.5%	6.7%
Totals				33.0%	6.7%
5/6/2017	Start	Current	Dividend	Pct Gain	R3K Gain
WSTC	$24.15	$23.34	$0.00	-3.4%	1.2%
TGNA	$25.75	$20.61	$0.07	-19.7%	1.2%
TIME	$15.05	$12.35	$0.04	-17.7%	1.2%
MSGN	$23.55	$20.55	$0.00	-12.7%	1.2%
QCOM	$54.93	$51.92	$0.57	-4.4%	1.2%
Totals				-11.6%	1.2%
8/15/2017	Start	Current	Dividend	Pct Gain	R3K Gain
GHC	$591.10	$574.70	$0.00	-2.8%	-1.6%
ICHR	$19.80	$20.36	$0.00	2.8%	-1.6%
MD	$43.00	$42.27	$0.00	-1.7%	-1.6%
SIMO	$43.05	$42.72	$0.00	-0.8%	-1.6%
RHI	$44.15	$43.33	$0.00	-1.9%	-1.6%
Totals				-0.9%	-1.6%

Bad week for YY as they had a secondary offering to raise more cash.  Newest tranche started in a tough week, but at least is ahead.  AKRX, a stock I do not talk about much as it is being bought sank 4% this week.  That was very strange.

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	-0.9%	40.6%	33.0%	-11.6%	15.3%
Previous Tranche	-0.1%	8.0%	10.7%	19.1%	15.8%
Tranche -2	2.8%	69.4%	-14.3%	-25.2%	8.2%
Tranche -3	11.2%	14.2%	8.5%	18.3%	13.0%
Tranche -4	41.4%	43.7%	78.3%	33.0%	49.1%
Tranche -5	14.1%	0.0%	0.0%	0.0%	3.5%
MFI Overall Gain	82.7%	322.5%	144.0%	23.9%	143.3%
Current Balance	45,686	105,636	61,010	30,969	243,301
R3K Current Tranche	-1.6%	12.6%	6.7%	1.2%	4.7%
R3K Overall Gain	88.5%	91.9%	72.6%	61.4%	78.6%
R3K Balance	47,131	47,966	43,142	40,352	178,591
Annualized IRR	12.8%	35.3%	21.7%	5.1%	18.7%

Back beneath 19% annualized IRR. It all candor, that it a very difficult hurdle to continuously clear.

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
7/1/2017	60.28%	239,060	178,782
8/1/2017	57.76%	239,924	182,163
Current	64.71%	243,301	178,591

August has still been good, although it does not feel good.

MFI Formula

As regular readers know, these are stocks I pick via a formula - I guess a formula applied to magic formula is formula squared.

10/3/2016	Start	Current	Dividend	Pct Gain	R3K Gain
CPLA	$58.15	$67.00	$1.23	17.3%	13.5%
LDOS	$43.01	$55.34	$0.96	30.9%	13.5%
GME	$27.70	$21.22	$1.13	-19.3%	13.5%
PBI	$18.15	$12.74	$0.56	-26.7%	13.5%
CSCO	$31.72	$30.37	$1.10	-0.8%	13.5%
Totals				0.3%	13.5%
12/30/2016	Start	Current	Dividend	Pct Gain	R3K Gain
GILD	$71.69	$72.11	$1.04	2.0%	8.5%
HPQ	$15.00	$18.51	$0.40	26.1%	8.5%
TGNA	$21.33	$20.61	$0.21	-2.4%	8.5%
CA	$31.99	$32.37	$0.51	2.8%	8.5%
SYNT	$19.79	$18.01	$0.00	-9.0%	8.5%
Totals				3.9%	8.5%
4/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$18.45	$14.05	$0.50	-21.1%	2.8%
CSCO	$33.76	$30.37	$0.58	-8.3%	2.8%
GILD	$67.50	$72.11	$0.52	7.6%	2.8%
OMC	$85.53	$76.76	$0.55	-9.6%	2.8%
SYNT	$16.76	$18.01	$0.00	7.5%	2.8%
Totals				-4.8%	2.8%
7/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$30.98	$30.37	$0.00	-2.0%	-0.2%
GME	$20.95	$21.22	$0.00	1.3%	-0.2%
HPQ	$17.60	$18.51	$0.00	5.2%	-0.2%
RGR	$60.70	$49.25	$0.23	-18.5%	-0.2%
SYNT	$16.21	$18.01	$0.00	11.1%	-0.2%
Totals				-0.6%	-0.2%
Category/Tranche	October	January	April	July	Total
Initial Investment	249,820	249,939	250,180	249,728	999,667
Current Tranche	0.3%	3.9%	-4.8%	-0.6%	-0.4%
Previous Tranche	5.5%	9.3%	25.2%	26.7%	16.2%
Tranche -2	0.5%	11.0%	-0.2%	-12.5%	-0.3%
MFI Overall Gain	6.3%	26.0%	18.9%	10.3%	15.4%
Current Balance	265,534	314,994	297,360	275,355	1,153,243
R3K Current Tranche	13.5%	8.5%	2.8%	-0.2%	6.2%
R3K Overall Gain	28.2%	21.2%	20.0%	16.2%	21.4%
R3K Balance	320,300	303,049	300,168	290,176	1,213,692
Annualized IRR	2.1%	9.2%	7.5%	4.7%	5.9%

Just a struggle as you can see.  In aggregate my current tranches are now negative,  My formula approach is mirroring much more closely (than my select approach) the MFI tracking and MFI Index.  My 12 open tracking portfolios are down an average of 3%. Guess I should feel good about -0.4%!

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
7/1/2017	-2.40%	119,144	121,545
8/1/2017	-1.96%	121,873	123,828
Current	-6.05%	115,324	121,371

Falling further and further behind.

Dividend Portfolio

I continue to shovel $ in this direction aggressively to build up retirement income stream.  That being said, keep in mind that with the selling of my former employers stock I am still north of 60% cash in total.

Stock	Initial	Current	Div/Sh	Gain/Loss	Yield
FDEU	18.40	18.52	0.36	2.6%	7.8%
LADR	13.01	13.54	-	4.1%	8.9%
NS	41.04	38.22	-	-6.9%	11.5%
PSXP	47.39	46.53	0.38	-1.0%	5.3%
JQC	8.20	8.46	0.60	10.5%	7.4%
TK	5.24	8.92	0.06	71.1%	2.5%
OIBAX	5.85	5.96	0.38	8.3%	4.0%
FSFR	8.68	8.60	-	-0.9%	8.8%
KCLI	49.32	49.30	0.27	0.5%	2.4%
DSL	19.47	20.45	1.05	10.4%	8.8%
ISBC	13.15	12.90	0.08	-1.3%	2.5%
RILY	15.58	15.35	0.13	-0.6%	1.7%
VTIBX	10.92	10.93	-	0.1%	1.1%
EVG	14.49	14.43	-	-0.4%	6.4%
TGONF	10.91	12.55	1.76	31.2%	5.6%
NRZ	16.22	16.55	0.38	4.4%	12.1%
SBRA	23.53	20.71	0.29	-10.8%	8.3%
BCRH	19.93	19.35	-	-2.9%	6.2%
GLDI	9.23	9.26	-	0.3%	5.7%
DHF	3.34	3.49	0.09	7.2%	8.1%
BKE	14.15	14.05	-	-0.7%	7.1%
O	25.14	56.85	20.39	207.2%	4.5%

I did add BKE as a dividend stock. Smallish position (recall these are in descending order.