Monday, December 31, 2018

Say Good Bye To 2018

Say Good-Bye To 2018

It was not a good year for me on the investing front.  Terrible in fact.  I will publish final numbers tomorrow, but I have been "diving" this past quarter.

But, as I have said before... a drop in the market actually can be good if you are a net buyer of stocks.  If you make the assumption that the stock market will be X in 2030, irregardless of how it gets there - then you are better off to have some drops along the way and use those as buying (not selling) opportunities.  And I have been selling nothing.

I read a great blog this mornings that comments that this quarter was the 14th worst quarter since 1926.  Guess what?  The five year return after the 13 worse quarters on average has been +91%.  It is no fun going through these bumpy times, but a longer term view really can be invaluable.  Here is a link to that blog (
Buying When Stocks Are Down Big).

My Baker's Dirty Dozen

As a reminder, on 12/21 I created a Baker's Dirty Dozen stock list, of stocks I felt had been way oversold during 2018.  So far, they have done well since I created list:


 Stock   Start   Current   Dividend   Gain/Loss 
 AMCX          52.23          54.72                    -   4.8%
 AMAT          30.31          32.38                    -   6.8%
 DLX          37.11          38.34                    -   3.3%
 DXC          50.48          52.95                    -   4.9%
 KLAC          85.67          88.63                    -   3.5%
 LRCX       127.16        135.42                    -   6.5%
 MU          30.32          31.57                    -   4.1%
 SGH          28.75          29.64                    -   3.1%
 WDC          35.90          36.74                    -   2.3%
 ECA            5.38             5.82                    -   8.2%
 GLNG          21.72          21.63                    -   -0.4%
 T          28.31          28.46                    -   0.5%
 TGP          11.82          10.80                    -   -8.6%
 Total  3.0%


I do believe there is gold in them thar hills for those with the courage to find it.  I would not go "all in", always best to keep some powder dry as stocks can always drop more.  But if you have a 3 to 5 year time horizon and you buy quality names, my belief is that everything will be alright.

Have a safe and happy New Year!

Friday, December 28, 2018

New MFI Formula Tranche (Dry Run)

New MFI Formula Tranche (Dry Run)

Next Wednesday I will be replacing my January 1st MFI Formula tranche.  As my readers know, I have 4 MFI Formula tranches (each at quarter start/close dates).  Each tranche consists of 5 MFI stocks that I buy and hold for a year.

For my MFI Formula portfolio, I have a filtering/formulaic approach.  I thought it might be helpful if I do a dry run so readers can see how I pick the five stocks.

Before I do that though, a quick shout out to the tranche about to call it a wrap:


1/2/2018  Start   Current   Dividend   Pct Gain   R3K Gain 
 AMGN  $177.11 $190.33 $5.28 10.4% -6.6%
 GME  $18.06 $12.18 $1.52 -24.1% -6.6%
 GILD  $71.64 $62.94 $1.71 -9.8% -6.6%
 HRB  $26.34 $25.12 $0.99 -0.9% -6.6%
 OMC  $72.81 $72.15 $1.80 1.6% -6.6%
 Totals  -4.5% -6.6%


Hard to be excited about down 4.5%.  But I wish my entire portfolio was down just 4.5% in 2018.  No stinkers (stocks down 30% or more), although GME gave it a run.

Now on to new tranche (dry run).

Step 1

First I run the official screen.  I have been running 50 stocks at 133m.  I will continue that in 2019.

Ticker Market Cap Price Dividend Yield
ACOR                       740         14.85                     -   0.00%
AEIS                   1,604         42.69                     -   0.00%
ALSN                   5,552         43.63                0.60 1.38%
AMAT                 29,568         31.55                0.80 2.54%
AGX                       590         37.59                1.00 2.66%
HRB                   5,105         25.12                0.99 3.95%
BPT                       423         20.25                5.29 26.14%
CECO                       797         11.20                     -   0.00%
CASA                   1,056         12.69                     -   0.00%
CELG                 43,681         62.81                     -   0.00%
CJREF                       678           3.21                0.24 7.48%
DLX                   1,801         38.44                1.20 3.13%
DXC                 14,663         53.44                0.76 1.42%
ESIO                   1,039         29.95                     -   0.00%
FTSI                       740           6.76                     -   0.00%
GME                   1,267         12.18                1.52 12.50%
GILD                 81,933         62.94                2.28 3.63%
EAF                   3,376         11.31                0.23 2.07%
HSII                       579         31.19                0.52 1.67%
HPQ                 31,633         20.38                0.58 2.84%
IDT                       143           5.99                0.37 6.18%
IMMR                       272           8.77                     -   0.00%
INVA                   1,898         16.96                     -   0.00%
IDCC                   2,250         65.85                1.42 2.15%
IPG                   7,822         20.41                0.84 4.12%
KLAC                 13,172         88.30                2.83 3.21%
LRCX                 20,993      133.28                3.79 2.84%
LGORF                   1,090           2.08                     -   0.00%
LTRPA                   1,187         15.89                     -   0.00%
MCFT                       349         18.40                     -   0.00%
MSB                       310         23.70                2.79 11.77%
MKSI                   3,324         63.22                0.78 1.24%
MSGN                   1,723         22.92                     -   0.00%
NHTC                       219         19.80                0.58 2.94%
NKTR                   5,673         33.17                     -   0.00%
EGOV                       815         12.31                0.32 2.59%
OMC                 16,093         72.15                2.40 3.32%
PETS                       490         23.93                1.04 4.35%
STX                 10,847         38.44                2.52 6.55%
SIGA                       569           7.00                     -   0.00%
SP                       640         28.56                     -   0.00%
STRL                       285         10.25                     -   0.00%
TVTY                       992         24.92                     -   0.00%
TUP                   1,566         31.57                2.72 8.61%
HEAR                       207         14.59                     -   0.00%
UIS                       577         11.41                     -   0.00%
UTHR                   4,979      105.30                     -   0.00%
VEC                       236         21.45                     -   0.00%
VIAB                 10,589         25.89                0.80 3.10%
WDC                 10,673         36.89                2.00 5.42%

Step 2

Exclude stocks with yield under 2.4%.

Number Ticker Market Cap Price Dividend Yield
1 AMAT              29,568         31.55              0.80 2.54%
2 AGX                    590         37.59              1.00 2.66%
3 HRB                 5,105         25.12              0.99 3.95%
4 BPT                    423         20.25              5.29 26.14%
5 CJREF                    678           3.21              0.24 7.48%
6 DLX                 1,801         38.44              1.20 3.13%
7 GME                 1,267         12.18              1.52 12.50%
8 GILD              81,933         62.94              2.28 3.63%
9 HPQ              31,633         20.38              0.58 2.84%
10 IDT                    143           5.99              0.37 6.18%
11 IPG                 7,822         20.41              0.84 4.12%
12 KLAC              13,172         88.30              2.83 3.21%
13 LRCX              20,993      133.28              3.79 2.84%
14 MSB                    310         23.70              2.79 11.77%
15 NHTC                    219         19.80              0.58 2.94%
16 EGOV                    815         12.31              0.32 2.59%
17 OMC              16,093         72.15              2.40 3.32%
18 PETS                    490         23.93              1.04 4.35%
19 STX              10,847         38.44              2.52 6.55%
20 TUP                 1,566         31.57              2.72 8.61%
21 VIAB              10,589         25.89              0.80 3.10%
22 WDC              10,673         36.89              2.00 5.42%

Step 3

Exclude stocks with market cap under 740m (the 16 smallest stocks from original pull).


Number Ticker Market Cap Price Dividend Yield
1 AMAT              29,568         31.55              0.80 2.54%
2 HRB                 5,105         25.12              0.99 3.95%
3 DLX                 1,801         38.44              1.20 3.13%
4 GME                 1,267         12.18              1.52 12.50%
5 GILD              81,933         62.94              2.28 3.63%
6 HPQ              31,633         20.38              0.58 2.84%
7 IPG                 7,822         20.41              0.84 4.12%
8 KLAC              13,172         88.30              2.83 3.21%
9 LRCX              20,993      133.28              3.79 2.84%
10 EGOV                    815         12.31              0.32 2.59%
11 OMC              16,093         72.15              2.40 3.32%
12 STX              10,847         38.44              2.52 6.55%
13 TUP                 1,566         31.57              2.72 8.61%
14 VIAB              10,589         25.89              0.80 3.10%
15 WDC              10,673         36.89              2.00 5.42%
Step 4

Throw out one name if desired.  While this is a formulaic approach, I do allow myself the optionality to throw out one name.  I am trying to remove my biases, so I should not throw out a name just because I don't like it... it should be because I don't believe past 12 month income is reflective (at all) of future income.  In this event, I have wearied of GME... but will not throw it out.

Step 5

Run a random number generator to pick 5 names.

Random # Stock
6 HPQ
2 HRB
3 DLX
9 LRCX
10 EGOV

I do plan in 2019 to continue to divert a larger and larger part of my overall money into MFI.  I have not decided how much yet.  But I do believe it works for me.