Greetings from Georgia. Here in Atlanta to see some family and perhaps go to the Falcons/Cowboys game on Sunday. Still trying to get some tickets. If any of my faithful readers (meaning you) has access to tickets, drop me a note!
You have found your way to the MFI Diary. This is a blog following the investment approach described by Joel Greenblatt in The Little Book That Beats The Market. I have been writing this blog and following his investment approach since early 2006.
I did create a guide recently for new readers to my blog that point you to some key/interesting posts. I encourage you to give it a whirl (). 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
It was a roller coaster week for me. Monday and Thursday were really good. But Tuesday and Wednesday were really bad. Friday was a push. I had one stock (SELB) getting totally taken to the cleaners, down 50% in a day. I am still not even sure why they dropped that much. Some of my Miscellaneous holdings have a bit more excitement than I'd like.
| Component | YTD | 4th Q |
| Overall | +12.21% | -1.14% |
| MFI Select | +22.03% | -1.76% |
| MFI Formula | +10.09% | +0.49% |
| Miscellaneous | +7.68% | +0.63% |
| Dividend | +10.68% | -2.77% |
| R3K | +16.25% | +2.30% |
| MFI Index | -0.97% | -5.03% |
| GARIX | +6.77% | +1.79% |
I guess comparing this table with last week you'd have to say it was a decent week. Misc made the big move, so my thrashing with SELB was more than offset with increases by OMER (22%) and SLSDF (43%).
Looking at the table above, I also note that GARIX is actually hanging in there (for Value plays) in Q4. The MFI Index, as I documented earlier this week is a hot mess.
Here are my MFI stocks
| Portfolio | Stock | Last Week | Current | Dividend | Change |
| Select | ATHM | 59.56 | 61.50 | - | 3.3% |
| Select | RHI | 52.34 | 52.90 | - | 1.1% |
| Select | YY | 90.51 | 88.90 | - | -1.8% |
| Select | ICHR | 29.77 | 27.98 | - | -6.0% |
| Select | AKRX | 33.15 | 33.21 | - | 0.2% |
| Select | AMGN | 173.44 | 172.35 | - | -0.6% |
| Select | SIMO | 47.98 | 47.17 | - | -1.7% |
| Select | MPAA | 26.99 | 25.50 | - | -5.5% |
| Select | CA | 32.65 | 32.45 | - | -0.6% |
| Select | WNC | 19.71 | 19.84 | - | 0.7% |
| Select | KLAC | 106.30 | 102.44 | - | -3.6% |
| Select | MD | 43.37 | 44.47 | - | 2.5% |
| Select | WSTC | 23.50 | 23.50 | - | 0.0% |
| Select | GHC | 548.00 | 558.65 | - | 1.9% |
| Select | QCOM | 61.81 | 64.57 | - | 4.5% |
| Select | MSGN | 17.05 | 17.20 | - | 0.9% |
| Select | RGR | 50.80 | 49.35 | - | -2.9% |
| Select | TGNA | 19.85 | 20.10 | 1.2% | |
| Select | TIME | 10.70 | 10.95 | 2.3% | |
| Average | -0.2% |
A lot of earnings and AVGO looking at QCOM. But it all washed out to pretty flat.
| Portfolio | Stock | Last Week | Current | Dividend | Change |
| Formula | SYNT | 23.61 | 23.39 | - | -0.9% |
| Formula | HPQ | 21.47 | 21.23 | - | -1.1% |
| Formula | GILD | 73.46 | 73.77 | - | 0.4% |
| Formula | CSCO | 34.47 | 33.99 | - | -1.4% |
| Formula | OMC | 66.21 | 67.55 | - | 2.0% |
| Formula | GME | 18.10 | 16.43 | - | -9.2% |
| Formula | CA | 32.65 | 32.45 | - | -0.6% |
| Formula | DIN | 47.36 | 46.63 | - | -1.5% |
| Formula | TGNA | 19.85 | 20.10 | - | 1.2% |
| Formula | BKE | 17.75 | 19.00 | - | 7.0% |
| Formula | RGR | 50.80 | 49.35 | - | -2.9% |
Little disconnect between my retail plays. BKE was up nicely. But GME down 9%.
MFI Select
My MFI Select portfolio is real money at work using MFI techniques. It has 4 tranches of 5 stocks apiece. I hold each tranche for a year and then sell and buy 5 new stocks. Lather, rinse, repeat. I give myself the luxury in this portfolio to really pick whatever stocks I want. They can be on the official list or from my own screens. This portfolio was started in August 2012. I had quit MFI in the summer of 2011 out of frustration. I studied problems and data for a year and came out with my reboot - here is a good post on my reboot thoughts ().
Here are the four tranches:
MFI Select
My MFI Select portfolio is real money at work using MFI techniques. It has 4 tranches of 5 stocks apiece. I hold each tranche for a year and then sell and buy 5 new stocks. Lather, rinse, repeat. I give myself the luxury in this portfolio to really pick whatever stocks I want. They can be on the official list or from my own screens. This portfolio was started in August 2012. I had quit MFI in the summer of 2011 out of frustration. I studied problems and data for a year and came out with my reboot - here is a good post on my reboot thoughts ().
Here are the four tranches:
| 11/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MPAA | $26.55 | $25.50 | $0.00 | -4.0% | 20.5% |
| ATHM | $22.61 | $61.50 | $0.00 | 172.0% | 20.5% |
| AMGN | $145.14 | $172.35 | $3.15 | 20.9% | 20.5% |
| RHI | $43.23 | $52.90 | $0.94 | 24.5% | 20.5% |
| CA | $31.11 | $32.45 | $0.77 | 6.8% | 20.5% |
| Totals | 44.1% | 20.5% | |||
| 2/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AKRX | $19.10 | $33.21 | $0.00 | 73.9% | 14.2% |
| YY | $41.08 | $88.90 | $0.00 | 116.4% | 14.2% |
| KLAC | $85.11 | $102.44 | $1.67 | 22.3% | 14.2% |
| WNC | $17.65 | $19.84 | $0.18 | 13.4% | 14.2% |
| RGR | $52.75 | $49.35 | $1.15 | -4.3% | 14.2% |
| Totals | 44.4% | 14.2% | |||
| 5/6/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| WSTC | $24.15 | $23.50 | $0.00 | -2.7% | 8.3% |
| TGNA | $25.75 | $20.10 | $0.14 | -21.4% | 8.3% |
| TIME | $15.05 | $10.95 | $0.04 | -27.0% | 8.3% |
| MSGN | $23.55 | $17.20 | $0.00 | -27.0% | 8.3% |
| QCOM | $54.93 | $64.57 | $1.14 | 19.6% | 8.3% |
| Totals | -11.7% | 8.3% | |||
| 8/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GHC | $591.10 | $558.65 | $1.27 | -5.3% | 5.4% |
| ICHR | $19.80 | $27.98 | $0.00 | 41.3% | 5.4% |
| MD | $43.00 | $44.47 | $0.00 | 3.4% | 5.4% |
| SIMO | $43.05 | $47.17 | $0.00 | 9.6% | 5.4% |
| RHI | $44.15 | $52.90 | $0.24 | 20.4% | 5.4% |
| Totals | 13.9% | 5.4% |
So one can see that except for the egg that is my May tranche, the open tranches have done quite well. My Nov 2016 tranche will be closed this upcoming week. I will post my new five stocks here.
This table shows at a higher level how every tranche has done since August 2012:
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 13.9% | 44.1% | 44.4% | -11.7% | 22.5% |
| Previous Tranche | -0.1% | 8.0% | 10.7% | 19.1% | 15.5% |
| 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 | 109.9% | 332.9% | 164.9% | 23.7% | 157.9% |
| Current Balance | 52,474 | 108,227 | 66,223 | 30,933 | 257,857 |
| R3K Current Tranche | 5.4% | 20.5% | 14.2% | 8.3% | 12.1% |
| R3K Overall Gain | 101.9% | 105.3% | 84.7% | 72.8% | 91.2% |
| R3K Balance | 50,476 | 51,327 | 46,178 | 43,204 | 191,185 |
| Annualized IRR | 15.2% | 34.1% | 22.6% | 4.8% | 19.2% |
You can see that for whatever reason, my November tranches have been steller (no pressure) 43.7%, 14.2%, 69.4%, 8.0% and now 44.1%. That has taken a hypothetical 25,000 to $108,227 in 5 years, which is an annualized IRR of 34.1%.
In reality, I did not start with $25,000 per tranche and I have regularly added $ to tranches at anniversary dates. I do not plan to add to November this week as even with the additions to other tranches this year, it remains my largest tranche (44% helps).
Here is what I would have month by month (assuming I started with 100k and never added money):
| 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 |
| 10/1/2017 | 75.60% | 262,489 | 186,886 |
| 11/1/2017 | 68.17% | 259,061 | 190,888 |
| Current | 66.67% | 257,857 | 191,185 |
MFI Formula
This is my 2nd real money portfolio. I started it in October 2014. It also has 4 tranches of 5 stocks each. But here I pick via a formula and random number generator. Here is a blog discussing the formula (). The tables in this blog are pretty powerful arguments for thinking about market cap and dividend yield as strong predictors of future results.
Same tables.
| 12/30/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GILD | $71.69 | $73.77 | $1.56 | 5.1% | 16.1% |
| HPQ | $15.00 | $21.23 | $0.53 | 45.1% | 16.1% |
| TGNA | $21.33 | $20.10 | $0.28 | -4.5% | 16.1% |
| CA | $31.99 | $32.45 | $0.77 | 3.8% | 16.1% |
| SYNT | $19.79 | $23.39 | $0.00 | 18.2% | 16.1% |
| Totals | 13.5% | 16.1% | |||
| 4/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $18.45 | $19.00 | $0.75 | 7.0% | 10.1% |
| CSCO | $33.76 | $33.99 | $0.87 | 3.3% | 10.1% |
| GILD | $67.50 | $73.77 | $1.04 | 10.8% | 10.1% |
| OMC | $85.53 | $67.55 | $1.10 | -19.7% | 10.1% |
| SYNT | $16.76 | $23.39 | $0.00 | 39.5% | 10.1% |
| Totals | 8.2% | 10.1% | |||
| 7/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $30.98 | $33.99 | $0.29 | 10.7% | 6.9% |
| GME | $20.95 | $16.43 | $0.38 | -19.8% | 6.9% |
| HPQ | $17.60 | $21.23 | $0.13 | 21.4% | 6.9% |
| RGR | $60.70 | $49.35 | $0.23 | -18.3% | 6.9% |
| SYNT | $16.21 | $23.39 | $0.00 | 44.3% | 6.9% |
| Totals | 7.6% | 6.9% | |||
| 10/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| DIN | $43.14 | $46.63 | $0.00 | 8.1% | 2.3% |
| GILD | $82.85 | $73.77 | $0.00 | -11.0% | 2.3% |
| GME | $20.50 | $16.43 | $0.00 | -19.9% | 2.3% |
| HPQ | $20.22 | $21.23 | $0.00 | 5.0% | 2.3% |
| OMC | $74.80 | $67.55 | $0.00 | -9.7% | 2.3% |
| Totals | -5.5% | 2.3% |
Bit of a struggle.
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | -5.5% | 13.5% | 8.2% | 7.6% | 6.0% |
| Previous Tranche | 7.0% | 9.3% | 25.2% | 26.7% | 16.5% |
| Tranche -2 | 5.5% | 11.0% | -0.2% | -12.5% | 1.0% |
| Tranche -3 | 0.5% | 0.0% | 0.0% | 0.0% | 0.1% |
| MFI Overall Gain | 7.2% | 37.7% | 35.1% | 19.4% | 24.8% |
| Current Balance | 267,761 | 344,227 | 337,948 | 298,139 | 1,248,074 |
| R3K Current Tranche | 2.3% | 16.1% | 10.1% | 6.9% | 8.8% |
| R3K Overall Gain | 37.2% | 29.8% | 28.5% | 24.4% | 30.0% |
| R3K Balance | 342,869 | 324,380 | 321,380 | 310,774 | 1,299,402 |
| Annualized IRR | 2.3% | 11.8% | 12.2% | 7.8% | 8.5% |
Obviously a much lower overall IRR (8.5%) versus my Select approach (over 19%). But I still have confidence.
| 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 |
| 10/1/2017 | -2.56% | 124,448 | 127,007 |
| 11/1/2017 | -3.85% | 125,890 | 129,739 |
| Current | -5.13% | 124,807 | 129,942 |
You can see November is not off to a great start.
Miscellaneous and Dividend
These are two portfolios of mine that are not MFI centric. The dividend portfolio is designed to help provide me and my family an income stream as I am now retired. So I am not so concerned with capital gains as I am with dividends. I did sell my BKE and CA this week and added KNOP.
| Dividend Stocks | Start | Current | Divvy | Overall Pct Gain | Weekly Pct Gain | 9/30/17 Price | Yield |
| TK | 6.20 | 9.12 | 0.08 | 48.6% | 14.9% | 8.93 | 2.4% |
| CPLP | 3.54 | 3.26 | 0.08 | -5.6% | -0.3% | 3.50 | 9.8% |
| EVG | 14.46 | 14.02 | 0.18 | -1.8% | -0.8% | 14.24 | 6.5% |
| KNOP | 21.44 | 20.90 | - | -2.5% | -2.5% | 21.44 | 10.0% |
| LADR | 13.01 | 13.65 | 0.30 | 7.3% | -0.4% | 13.78 | 9.2% |
| FDEU | 18.40 | 18.60 | 0.69 | 4.9% | -1.3% | 19.42 | 7.8% |
| KCLI | 49.31 | 48.60 | 0.49 | -0.4% | -0.8% | 49.75 | 2.2% |
| ISBC | 13.25 | 13.21 | 0.15 | 0.9% | -4.1% | 13.64 | 2.7% |
| RLJ-PA | 28.45 | 27.72 | 0.49 | -0.8% | -0.4% | 27.82 | 7.1% |
| PSXP | 47.39 | 48.14 | 1.03 | 3.8% | -3.3% | 52.56 | 5.4% |
| SBRA | 22.34 | 19.46 | 0.41 | -11.1% | 0.7% | 21.94 | 9.2% |
| OIBAX | 5.85 | 5.90 | 0.44 | 8.3% | 0.2% | 5.95 | 4.4% |
| JQC | 8.20 | 8.20 | 1.54 | 18.8% | -0.6% | 8.49 | 7.0% |
| DSL | 19.47 | 20.58 | 1.50 | 13.4% | -1.1% | 21.25 | 8.7% |
| OCSI | 8.68 | 8.60 | 0.19 | 1.3% | -1.4% | 8.80 | 8.8% |
| RILY | 15.58 | 16.50 | 0.13 | 6.8% | -0.3% | 17.05 | 1.6% |
| NS | 41.04 | 31.73 | 1.10 | -20.0% | -0.8% | 40.59 | 13.8% |
| TGONF | 11.04 | 13.07 | 1.79 | 34.6% | 1.6% | 12.80 | 5.4% |
| VTIBX | 10.92 | 10.96 | 0.03 | 0.6% | -0.2% | 10.89 | 1.0% |
| TGP | 18.12 | 18.00 | - | -0.6% | -0.4% | 17.85 | 3.1% |
| GLDI | 9.29 | 8.94 | 0.19 | -1.6% | 0.1% | 9.07 | 12.1% |
| NRZ | 16.22 | 17.27 | 0.88 | 11.9% | -1.3% | 16.73 | 11.6% |
| DHF | 3.34 | 3.38 | 0.16 | 6.0% | -2.3% | 3.53 | 8.2% |
| O | 25.38 | 56.27 | 20.66 | 203.1% | 2.0% | 57.19 | 4.5% |
| Totals | 5.1% | 0.1% | 6.7% |
These are generally listed in descending order of size. I have gone a bit long on some shipping stocks (TK, CPLP and KNOP). This is a space that as economies start to reflate, that I view as good opportunities.
My Miscellaneous portfolio is a hodgepodge of stocks. Definitely the most risky profile of all my portfolios. I do have some biotech plays, which frankly have not worked that well. I have SLSDF, which is also down a ton - but they report earnings Monday morning and I am quite hopeful when I consider how their peers have done. I do have a couple small banks, FUNC and OFED - just a safe place to park cash as they both trade a low price to book values. I have a few energy plays (EXXI and SN) as energy is one of the most beaten down areas and oil prices have been steadily rising. I also bought URA this week as the Uranium space saw a major player shutter a mine this week, which should impact the supply/demand equation. I own MTG, which is a mortgage insurer. I like this space as there are not that many mortgage insurers, I think that people are starting to buy more houses and they have had a great run on profitability (due to heightened underwriting standards) post financial crisis.
Have a great weekend.
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