Saturday, September 23, 2017

Weekend Update 9/23/17

Weekend Update

I am in Bar Harbor Maine this weekend.  What an amazing place.  I am hampered somewhat though by a bad case of poison oak - it is really gross.

Tough week to watch the news.  Puerto Rico got leveled by Maria. We were there for New Years 2017, beautiful island - heart goes out to people who have to rebuild.  And with limited electricity.  Now I see a dam may break.

Then we have Trump bashing the NFL and Steph Curry - doesn't come across as very presidential.

Then Mexico City having a bad earthquake - with hundreds killed.  All of this really has to be stretching resources that can help.  I will be donating to the Red Cross today.

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.

Any opinions you read are my own unless they end up being really bad.

The Past Week

Last week was a good week for me.  Friday was a great day, lead by PSXP news (Phillips 66 Partners to buy assets from Phillips 66 in $2.4B deal).  Here is where I stand year to date:


 Component   YTD 
 Overall  +11.18%
 MFI Select  +21.17%
 MFI Formula  +8.42%
 Miscellaneous  +1.91%
 Dividend  +12.77%
 R3K  +12.64%
 MFI Index  +1.03%

Amazing R3K is up 12.6% on the year.  My two MFI portfolios (Select and Formula) are doing reasonably well.  The MFI Index finally got back into the green.  Here are my MFI stocks during the week:


 Stock   Last Week   Current   Dividend   Change 
 ATHM              65.83         64.17                       -   -2.5%
 RHI              46.47         48.60                       -   4.6%
 YY              77.11         80.52                       -   4.4%
 AKRX              33.10         33.06                       -   -0.1%
 AMGN            187.47       185.76                       -   -0.9%
 CA              33.10         32.68                       -   -1.3%
 ICHR              24.33         24.69                       -   1.5%
 WNC              20.86         21.29                       -   2.1%
 SIMO              47.44         45.00                       -   -5.1%
 MPAA              27.05         28.01                       -   3.5%
 MD              42.90         42.14                       -   -1.8%
 GHC            562.80       567.55                       -   0.8%
 WSTC              23.38         23.51                       -   0.6%
 QCOM              52.19         52.09                       -   -0.2%
 KLAC              98.64       100.59                       -   2.0%
 MSGN              21.25         20.80                       -   -2.1%
 TGNA              20.97         21.60                       -   3.0%
 RGR              47.30         51.00 7.8%
 TIME              13.05         12.55 -3.8%

 Stock   Last Week   Current   Dividend   Change 
 SYNT              18.09         19.06                       -   5.4%
 CSCO              32.44         33.37                       -   2.9%
 HPQ              19.47         19.94                       -   2.4%
 GILD              82.36         83.27                       -   1.1%
 GME              20.29         20.01                       -   -1.4%
 CA              33.10         32.68                       -   -1.3%
 TGNA              20.97         21.60                       -   3.0%
 OMC              73.04         75.00                  0.56 3.5%
 CPLA              68.20         67.35                       -   -1.2%
 BKE              15.75         15.95                       -   1.3%
 RGR              47.30         51.00                       -   7.8%
 LDOS              56.40         58.83                       -   4.3%
 PBI              12.98         13.58                       -   4.6%

You can see looking at the blue table that it was a good week, especially for my maligned Formula stocks.


MFI Select

Now for real money.  MFI Select is a portfolio of 4 tranches, each with 5 stocks that I buy and hold for a year per the "rules" from "The Little Book That Beats the Markets".  I rebooted this portfolio 5 years ago after quitting MFI for a year in 2011.  It has done well.  Here is how a hypothetical $100,000 invested in the first four tranches would have grown since 2012:


 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
9/1/2017 68.85%        251,265            182,419
Current 72.01%        257,254            185,244

You can see how well this approach has done in 2017.  From 209,503 to 257,254.  And lead has expanded from 45.6% to 72.0%.  Woo-hoo!

Here are my 4 tranches of 5 stocks that are open:

11/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 MPAA  $26.55 $28.01 $0.00 5.5% 16.8%
 ATHM  $22.61 $64.17 $0.00 183.8% 16.8%
 AMGN  $145.14 $185.76 $3.15 30.2% 16.8%
 RHI  $43.23 $48.60 $0.94 14.6% 16.8%
 CA  $31.11 $32.68 $0.77 7.5% 16.8%
 Totals  48.3% 16.8%
2/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 AKRX  $19.10 $33.06 $0.00 73.1% 10.6%
 YY  $41.08 $80.52 $0.00 96.0% 10.6%
 KLAC  $85.11 $100.59 $1.67 20.2% 10.6%
 WNC  $17.65 $21.29 $0.06 21.0% 10.6%
 RGR  $52.75 $51.00 $1.15 -1.1% 10.6%
 Totals  41.8% 10.6%
5/6/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 WSTC  $24.15 $23.51 $0.00 -2.7% 4.9%
 TGNA  $25.75 $21.60 $0.14 -15.6% 4.9%
 TIME  $15.05 $12.55 $0.04 -16.3% 4.9%
 MSGN  $23.55 $20.80 $0.00 -11.7% 4.9%
 QCOM  $54.93 $52.09 $1.14 -3.1% 4.9%
 Totals  -9.9% 4.9%
8/15/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 GHC  $591.10 $567.55 $0.00 -4.0% 2.1%
 ICHR  $19.80 $24.69 $0.00 24.7% 2.1%
 MD  $43.00 $42.14 $0.00 -2.0% 2.1%
 SIMO  $43.05 $45.00 $0.00 4.5% 2.1%
 RHI  $44.15 $48.60 $0.24 10.6% 2.1%
 Totals  6.8% 2.1%


Both February and November being up over 40% is really helping.  May was just 5 bad picks, they are all in the red.  The 10 stocks I did not pick are up over 7%, lead by YRD at 84%. Darn it.  Then my August picks are off to a snappy start.

Here is a table showing how I have done since 2012:


 Category/Tranche   August   November   February   May   Total 
 Initial Investment         25,000             25,000           25,000        25,000         100,000
 Current Tranche  6.8% 48.3% 41.8% -9.9% 21.7%
 Previous Tranche  -0.1% 8.0% 10.7% 19.1% 15.9%
 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  96.8% 345.7% 160.2% 26.3% 157.3%
 Current Balance         49,200           111,427           65,058        31,569         257,254
 R3K Current Tranche  2.1% 16.8% 10.6% 4.9% 8.6%
 R3K Overall Gain  95.6% 99.0% 79.0% 67.4% 85.2%
 R3K Balance         48,898             49,742           44,746        41,859         185,244
 Annualized IRR  14.2% 36.0% 22.9% 5.5% 19.6%


The 19.6% annualized IRR is solid.

MFI Formula

This is my newer real money MFI portfolio, I started it 3 years ago and it has underperformed the benchmarks a bit.  But my backtesting shows it will work, so I will give it time.  This portfolio is comprised of stocks that have at least a 2.4% dividend yield,

Here are the same tables:


 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
9/1/2017 -6.09%        117,879            123,973
Current -3.13%        122,764            125,891


You can see that I am bouncing back a bit in September after a horrible August.


10/3/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 CPLA  $58.15 $67.35 $1.64 18.6% 17.7%
 LDOS  $43.01 $58.83 $1.28 39.8% 17.7%
 GME  $27.70 $20.01 $1.51 -22.3% 17.7%
 PBI  $18.15 $13.58 $0.75 -21.0% 17.7%
 CSCO  $31.72 $33.37 $1.10 8.7% 17.7%
 Totals  4.7% 17.7%
12/30/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 GILD  $71.69 $83.27 $1.56 18.3% 12.5%
 HPQ  $15.00 $19.94 $0.53 36.5% 12.5%
 TGNA  $21.33 $21.60 $0.28 2.6% 12.5%
 CA  $31.99 $32.68 $0.77 4.5% 12.5%
 SYNT  $19.79 $19.06 $0.00 -3.7% 12.5%
 Totals  11.7% 12.5%
4/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 BKE  $18.45 $15.95 $0.50 -10.8% 6.6%
 CSCO  $33.76 $33.37 $0.58 0.6% 6.6%
 GILD  $67.50 $83.27 $1.04 24.9% 6.6%
 OMC  $85.53 $75.00 $1.10 -11.0% 6.6%
 SYNT  $16.76 $19.06 $0.00 13.7% 6.6%
 Totals  3.5% 6.6%
7/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 CSCO  $30.98 $33.37 $0.00 7.7% 3.5%
 GME  $20.95 $20.01 $0.38 -2.7% 3.5%
 HPQ  $17.60 $19.94 $0.13 14.0% 3.5%
 RGR  $60.70 $51.00 $0.23 -15.6% 3.5%
 SYNT  $16.21 $19.06 $0.00 17.6% 3.5%
 Totals  4.2% 3.5%


Nice to see the July portfolio leading.  The October portfolio has just a week left.


 Category/Tranche   October   January   April   July   Total 
 Initial Investment      249,820        249,939     250,180      249,728         999,667
 Current Tranche  4.7% 11.7% 3.5% 4.2% 6.1%
 Previous Tranche  5.5% 9.3% 25.2% 26.7% 16.1%
 Tranche -2  0.5% 11.0% -0.2% -12.5% -0.3%
 MFI Overall Gain  11.0% 35.4% 29.2% 15.6% 22.8%
 Current Balance      277,336        338,490     323,185      288,627      1,227,639
 R3K Current Tranche  17.7% 12.5% 6.6% 3.5% 10.1%
 R3K Overall Gain  33.0% 25.8% 24.5% 20.6% 25.9%
 R3K Balance      332,155        314,317     311,374      301,057      1,258,903
 Annualized IRR  3.6% 11.7% 10.9% 6.7% 8.2%


Dividends and Miscellaneous


My Misc portfolio is higher risk and my smallest portfolio. It is now at least back in the black at almost 2%.  The dividend portfolio is actually my largest and does have some bond type securities.  It has done really well this year.  Here are my dividend  portfolio holdings:


 Stock   Initial   Current   Div/Sh   Gain/Loss   Yield 
 EVG          14.46          14.36            0.10 0.0% 6.4%
 FDEU          18.40          19.29            0.48 7.5% 20.4%
 KCLI          49.31          49.75            0.22 1.3% 2.4%
 PSXP          47.39          51.40            0.38 9.3% 4.8%
 LADR          13.01          13.61            0.30 7.0% 8.8%
 NS          41.04          40.02                 -   -2.5% 10.9%
 RLJ-PA          28.45          27.80                 -   -2.3% 7.1%
 OIBAX             5.85             5.99            0.40 9.2% 4.0%
 FSFR             8.68             8.88            0.19 4.6% 8.6%
 DSL          19.47          21.16            1.35 15.6% 8.5%
 JQC             8.20             8.35            0.65 9.8% 7.5%
 TK             5.24             8.81            0.06 69.1% 2.5%
 RILY          15.58          16.75            0.13 8.4% 1.6%
 ISBC          13.15          13.46            0.08 3.0% 2.4%
 VTIBX          10.92          10.91            0.01 0.0% 1.1%
 GLDI             9.29             9.17            0.10 -0.2% 9.0%
 CPLP             3.57             3.56                 -   -0.3% 9.0%
 TGONF          10.91          12.32            1.76 29.1% 5.7%
 NRZ          16.22          16.89            0.38 6.5% 11.8%
 SBRA          23.53          22.21            0.65 -2.9% 6.5%
 DHF             3.34             3.50            0.12 8.2% 8.1%
 BKE          14.15          15.95                 -   12.7% 6.3%
 O          25.26          57.57         20.53 209.2% 4.4%

Some of my newer positions are off to a slow start: NS, RLJ-PA and CPLP.  But frankly I am just happy to sit back and watch the dividends flow in.  It is a high yielding portfolio at 7.1%, so there is definitely some risk here.

Off to hike in Acadia.

Have a great weekend.






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