Saturday, November 04, 2017

MFI Weekend Update 11/4/17

Weekend Update

Good morning.  Back home in CT.  I have my coffee and set to write about the past week.  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 (Guide To New Readers).  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

This was just a bad week for me.  Again.  Value stocks are generally just struggling.  Over the past month, IWF (Russell Growth) is up 3.8% while IWD (Russell Value) is flat.  Is it any wonder I am losing ground?  And MFI is under greater duress, I show that my MFI Index (a grouping of 50 stocks reconstituted once a year) was down 3% just during the week.

AMCX - 9.6%
AGTC  -10.5%
HRB  -8.2%
DHX  -14.6%
GME  -6.1%
ICON  -67.0%
MPAA  -7.1%
MSGN  -13.5%
MYGN  -18.4%
PBI  -18.1%

Wow! If that doesn't get your attention, not sure what will.  Just a dreadful group of stocks. Thankfully, I only owned two of them (GME and MSGN) - but my MFI Index now stands basically flat for the year.  My MFI holdings were down 1% this week.  Here is a table showing quarterly and YTD results.


 Component   YTD   4th Q 
 Overall  +11.92% -1.40%
 MFI Select  +22.26% -1.58%
 MFI Formula  +11.32% +1.60%
 Miscellaneous  +6.08% -0.86%
 Dividend  +10.49% -2.93%
 R3K  +16.50% +2.52%
 MFI Index  +0.25% -3.86%
 GARIX  +6.40% +1.44%


So pretty much everyone is trailing the R3K benchmark (IWV).  My dividend portfolio (not associated with MFI) is down 2.9% this quarter.  NS is down 21%!  TK and SBRA are both down a bit more than 10%.  Tough sledding.

MFI Select

This is the first of my 2 real money MFI portfolios.  It was started August 2012 after I had quit MFI for a year from frustration.  My reboot used greater discipline and analysis of past MFI stocks to try and weed out "stinker stocks" (stocks that drop 30% or more, which I view as the biggest problem with MFI. Here are how my stocks did during the week.


 Portfolio   Stock   Last Week   Current   Dividend   Change 
 Select   ATHM              56.95         59.56                       -   4.6%
 Select   RHI              52.84         52.34                       -   -0.9%
 Select   YY              85.34         90.51                       -   6.1%
 Select   ICHR              31.08         29.77                       -   -4.2%
 Select   AKRX              32.52         33.15                       -   1.9%
 Select   AMGN            175.28       173.44                       -   -1.0%
 Select   SIMO              47.26         47.98                       -   1.5%
 Select   MPAA              29.07         26.99                       -   -7.1%
 Select   CA              32.87         32.65                       -   -0.7%
 Select   WNC              22.42         19.71                       -   -12.1%
 Select   KLAC            108.07       106.30                       -   -1.6%
 Select   MD              44.28         43.37                       -   -2.1%
 Select   WSTC              23.50         23.50                       -   0.0%
 Select   GHC            575.20       548.00                       -   -4.7%
 Select   QCOM              54.57         61.81                       -   13.3%
 Select   MSGN              19.70         17.05                       -   -13.5%
 Select   RGR              51.50         50.80                       -   -1.4%
 Select   TGNA              20.55         19.85 -3.4%
 Select   TIME              11.95         10.70 -10.5%

Wow,  that is really bad.  Recall that these are generally in descending order of size.  But 4 were down 7% or more.  Only the rumors that AVGO is looking at QCOM kept this from being a rout.

Here are the 4 tranches:


11/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 MPAA  $26.55 $26.99 $0.00 1.7% 20.7%
 ATHM  $22.61 $59.56 $0.00 163.4% 20.7%
 AMGN  $145.14 $173.44 $3.15 21.7% 20.7%
 RHI  $43.23 $52.34 $0.94 23.2% 20.7%
 CA  $31.11 $32.65 $0.77 7.4% 20.7%
 Totals  43.5% 20.7%
2/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 AKRX  $19.10 $33.15 $0.00 73.6% 14.4%
 YY  $41.08 $90.51 $0.00 120.3% 14.4%
 KLAC  $85.11 $106.30 $1.67 26.9% 14.4%
 WNC  $17.65 $19.71 $0.18 12.7% 14.4%
 RGR  $52.75 $50.80 $1.15 -1.5% 14.4%
 Totals  46.4% 14.4%
5/6/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 WSTC  $24.15 $23.50 $0.00 -2.7% 8.6%
 TGNA  $25.75 $19.85 $0.14 -22.4% 8.6%
 TIME  $15.05 $10.70 $0.04 -28.6% 8.6%
 MSGN  $23.55 $17.05 $0.00 -27.6% 8.6%
 QCOM  $54.93 $61.81 $1.14 14.6% 8.6%
 Totals  -13.3% 8.6%
8/15/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 GHC  $591.10 $548.00 $1.27 -7.1% 5.7%
 ICHR  $19.80 $29.77 $0.00 50.4% 5.7%
 MD  $43.00 $43.37 $0.00 0.9% 5.7%
 SIMO  $43.05 $47.98 $0.00 11.5% 5.7%
 RHI  $44.15 $52.34 $0.24 19.1% 5.7%
 Totals  14.9% 5.7%

Still decent overall, but TIME and MSGN are starting to slip into stinker territory.

 Category/Tranche   August   November   February   May   Total 
 Initial Investment         25,000             25,000           25,000        25,000         100,000
 Current Tranche  14.9% 43.5% 46.4% -13.3% 22.6%
 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  111.8% 331.2% 168.6% 21.4% 158.3%
 Current Balance         52,962           107,796           67,154        30,353         258,265
 R3K Current Tranche  5.7% 20.7% 14.4% 8.6% 12.3%
 R3K Overall Gain  102.4% 105.8% 85.1% 73.2% 91.6%
 R3K Balance         50,588             51,439           46,280        43,299         191,606
 Annualized IRR  15.4% 34.2% 23.1% 4.4% 19.3%

This table summarizes all tranches back to 2012. Overall annualized IRR is still above 19%.

 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 66.66%        258,265            191,606

Here are month by month tallies, assuming I started at $100,000 back in 2012.  You can see Q4 is off to a slow start versus the benchmark.

MFI Formula

My second real money portfolio.  Started in October 2014.  While Select allows me free form in stock picks, the Formula approach is based upon a formula and random number generator.  While not a disaster, this approach is trailing the benchmark so far.  Same tables.


 Portfolio   Stock   Last Week   Current   Dividend   Change 
 Formula   SYNT              22.82         23.61                       -   3.5%
 Formula   HPQ              21.50         21.47                       -   -0.1%
 Formula   GILD              77.07         73.46                       -   -4.7%
 Formula   CSCO              34.43         34.47                       -   0.1%
 Formula   OMC              68.56         66.21                       -   -3.4%
 Formula   GME              19.34         18.10                       -   -6.4%
 Formula   CA              32.87         32.65                       -   -0.7%
 Formula   DIN              48.39         47.36                       -   -2.1%
 Formula   TGNA              20.55         19.85                       -   -3.4%
 Formula   BKE              17.25         17.75                       -   2.9%
 Formula   RGR              51.50         50.80                       -   -1.4%

12/30/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 GILD  $71.69 $73.46 $1.56 4.7% 16.4%
 HPQ  $15.00 $21.47 $0.53 46.7% 16.4%
 TGNA  $21.33 $19.85 $0.28 -5.6% 16.4%
 CA  $31.99 $32.65 $0.77 4.5% 16.4%
 SYNT  $19.79 $23.61 $0.00 19.3% 16.4%
 Totals  13.9% 16.4%
4/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 BKE  $18.45 $17.75 $0.75 0.3% 10.3%
 CSCO  $33.76 $34.47 $0.87 4.7% 10.3%
 GILD  $67.50 $73.46 $1.04 10.4% 10.3%
 OMC  $85.53 $66.21 $1.10 -21.3% 10.3%
 SYNT  $16.76 $23.61 $0.00 40.9% 10.3%
 Totals  7.0% 10.3%
7/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 CSCO  $30.98 $34.47 $0.29 12.2% 7.1%
 GME  $20.95 $18.10 $0.38 -11.8% 7.1%
 HPQ  $17.60 $21.47 $0.13 22.7% 7.1%
 RGR  $60.70 $50.80 $0.23 -15.9% 7.1%
 SYNT  $16.21 $23.61 $0.00 45.7% 7.1%
 Totals  10.6% 7.1%
10/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 DIN  $43.14 $47.36 $0.00 9.8% 2.6%
 GILD  $82.85 $73.46 $0.00 -11.3% 2.6%
 GME  $20.50 $18.10 $0.00 -11.7% 2.6%
 HPQ  $20.22 $21.47 $0.00 6.2% 2.6%
 OMC  $74.80 $66.21 $0.00 -11.5% 2.6%
 Totals  -3.7% 2.6%

That October 1st tranche is telling, down 3.7% so far.  That is very consistent with the MFI Index I listed at start of this blog, down 3.86% for the quarter.  I'm telling you, we are in a bull market overall, but value stocks not so much.


 Category/Tranche   October   January   April   July   Total 
 Initial Investment      249,820        249,939     250,180      249,728         999,667
 Current Tranche  -3.7% 13.9% 7.0% 10.6% 6.9%
 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  9.2% 38.1% 33.6% 22.6% 25.9%
 Current Balance      272,781        345,286     334,158      306,243      1,258,468
 R3K Current Tranche  2.6% 16.4% 10.3% 7.1% 9.1%
 R3K Overall Gain  37.6% 30.1% 28.7% 24.7% 30.3%
 R3K Balance      343,632        325,093     322,090      311,463      1,302,277
 Annualized IRR  2.9% 12.0% 11.8% 9.1% 8.9%

 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 -4.38%        125,847            130,229

Ugh. Trailing by 4.38%. Recall that after SYNT shot up 26% that I actually burst into a short-lived lead.

Dividend & Misc Portfolios

These are my non-MFI portfolios.  The dividend portfolio is my largest portfolio and is structured to create income stream for me as I just retired.  As I noted, it is struggling a bit recently.  I really don't think about that much.  I only worry when dividends are at risk or get cut.  In fact, with SBRA and NS drops of late, I think I will turn dividend reinvesting back on for them.


 Dividend Stocks  Start  Current   Divvy   Overall Pct Gain   Weekly Pct Gain   9/30/17 Price   Yield 
 FDEU    18.40       18.85      0.69 6.2% -0.3%        19.42 7.7%
 EVG    14.46       14.13      0.18 -1.0% -0.4%        14.24 6.5%
 PSXP    47.39       49.77      1.03 7.2% -3.0%        52.56 5.2%
 KCLI    49.31       49.00      0.49 0.4% -0.7%        49.75 2.2%
 LADR    13.01       13.70      0.30 7.6% 1.0%        13.78 8.8%
 ISBC    13.25       13.77      0.06 4.4% -2.1%        13.64 2.6%
 NS    41.04       32.00           -   -22.0% -7.0%        40.59 13.7%
 RLJ-PA    28.45       27.83      0.49 -0.5% -1.3%        27.82 7.0%
 JQC      8.20         8.25      1.54 19.4% -1.6%           8.49 6.9%
 TK      5.79         7.94      0.10 38.9% -3.9%           8.93 2.8%
 DSL    19.47       20.81      1.50 14.6% 0.0%        21.25 8.6%
 OIBAX      5.85         5.89      0.44 8.1% 0.2%           5.95 4.4%
 OCSI      8.68         8.72      0.19 2.7% -2.2%           8.80 8.7%
 RILY    15.58       16.55      0.13 7.1% -0.9%        17.05 1.6%
 SBRA    23.13       19.33      0.52 -14.2% -6.2%        21.94 10.8%
 TGONF    11.04       12.86      1.79 32.7% 0.5%        12.80 5.4%
 VTIBX    10.92       10.98      0.03 0.8% 0.4%        10.89 1.0%
 GLDI      9.29         8.93      0.19 -1.8% 0.1%           9.07 12.1%
 CPLP      3.54         3.27      0.08 -5.4% -4.9%           3.50 9.8%
 NRZ    16.22       17.50      0.88 13.3% -2.2%        16.73 11.4%
 DHF      3.34         3.46      0.14 7.7% 0.0%           3.53 8.2%
 BKE    14.15       17.75      0.25 27.2% 2.9%        16.85 5.6%
 CA    34.79       32.65      0.26 -5.4% -0.7%        17.85 3.1%
 O    25.38       55.18    20.66 198.8% 2.3%        57.19 4.6%
 Totals  5.9% -1.5% 6.7%

My Misc portfolio has higher risk stocks and some warrants.  It has struggled a bit.  I do not plan to allocate any more cash there.

2 comments:

Casey Clarke said...

Hello there! I found your blog while I was doing some research and considering starting my own Magic Formula blog. I couldn't access the new readers information for some reason. I see you track a ton of information and I'm very curious to understand how you have it all broken down.

I'd like to discuss MFI if you get a chance!

Marsh_Gerda said...

Casey - it'd be nice to have a new magic formula blog. It strikes me as odd that you cannot access my guide to new readers. I will try reposting it.