Wow, what a week. I have been on a relaxing cruise... so only was able to read updates about some of the daily swings/gyrations of the market.
My portfolio officially hit correction mode, down over 10% from high, this week. It is never "fun" to see your stocks lose value. But all in all, it didn't really bother me (maybe it was the margaritas). To me it is more opportunity than a problem. I have hoarded a healthy pile of cash and see values aplenty out there for first time in some time. If you have been buying on margin... you may be starting to have a problem.
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). (PS - I continue to struggle to make this link work. You can instead go to Blog archive on left margin of this blog and you will find a link in October 2017). 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.
Onwards.
Last Week
I am now in the red for 2018 (down 4.6%). Hard to believe just three weeks ago I was like +6%. Ironically, when market is dropping, I have been outperforming on a relative basis. And no, that doesn't really make me feel better.
| Component | YTD | Week Change |
| Overall | -4.6% | -3.9% |
| MFI Select | -1.3% | -5.1% |
| MFI Formula | -0.2% | -1.9% |
| MFI Combined | -0.8% | -3.6% |
| Miscellaneous | -10.9% | -5.1% |
| Dividend | -4.6% | -3.6% |
| Dividend Index | -4.1% | -3.1% |
| R3K Index | -2.3% | -5.2% |
| Blended Index | -2.9% | -4.5% |
| MFI Index | +2.0% | -3.5% |
| GARIX | -1.1% | -4.9% |
Well, I suspect the sherlock holmes readers out there will spot that my Misc portfolio is causing me some problems. Not surprising as it is the riskiest part of my investments and generally will not shine in a selloff.
Overall, you can see I am down 4.6%, 3.9% of that coming these past 5 days. MFI is holding up the best, just down 0.8% in 2018. That is actually pretty good. Other MFI benchmarks are MFI Index (up 2.0%!!!) and GARIX, down 1.1%.
I did buy some shipping stocks this week. I added to NMM, bought GLNG and SBLK in anticipation of earnings.
MFI Select
My MFI Select portfolio is one of two real money MFI portfolios I have. I started it in August 2012 and it consists of 4 tranches with 5 stocks each. I hold each tranche for a year and then invest balance in five new stocks. I often add $ at reinvestment.
As you can see from table above, it was down 5.1% on the week. Ugh. Now down 1.3% on the year. Never easy, right? Here are how the stocks did during the week... see if you can spot the problems!
| Stock | Last Week | Current | Dividend | Change |
| MSGN | 25.80 | 23.25 | - | -9.9% |
| SIMO | 49.56 | 44.61 | 0.30 | -10.0% |
| VIAB | 32.22 | 32.87 | - | 2.0% |
| CASA | 20.61 | 18.04 | - | -12.5% |
| KLAC | 106.52 | 100.90 | - | -5.3% |
| THO | 131.20 | 127.57 | - | -2.8% |
| AGX | 42.10 | 39.50 | - | -6.2% |
| WDC | 85.25 | 80.59 | - | -5.5% |
| EVC | 6.70 | 6.50 | - | -3.0% |
| ICHR | 28.50 | 21.34 | - | -25.1% |
| CELG | 99.80 | 92.51 | - | -7.3% |
| RHI | 56.24 | 53.22 | - | -5.4% |
| MD | 51.48 | 53.94 | - | 4.8% |
| QCOM | 66.07 | 63.99 | - | -3.1% |
| GHC | 591.15 | 577.00 | - | -2.4% |
| TGNA | 23.36 | 22.41 | - | -4.1% |
Wow, ICHR, which was $34.35 on the 23rd of January has plummeted to $21.34. CASA, SIMO and essentially MSGN were also down double digits. MD and VIAB were only two names to be in the black for the week - I suspect both are acquisition targets.
Here are the four open tranches:
| 5/6/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| WSTC | $24.15 | $23.50 | $0.00 | -2.7% | 10.1% |
| TGNA | $25.75 | $22.41 | $0.21 | -12.1% | 10.1% |
| TIME | $15.05 | $18.50 | $0.08 | 23.5% | 10.1% |
| MSGN | $23.55 | $23.25 | $0.00 | -1.3% | 10.1% |
| QCOM | $54.93 | $63.99 | $1.71 | 19.6% | 10.1% |
| Totals | 5.4% | 10.1% | |||
| 8/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GHC | $591.10 | $577.00 | $2.54 | -2.0% | 7.1% |
| ICHR | $19.80 | $21.34 | $0.00 | 7.8% | 7.1% |
| MD | $43.00 | $53.94 | $0.00 | 25.4% | 7.1% |
| SIMO | $43.05 | $44.61 | $0.60 | 5.0% | 7.1% |
| RHI | $44.15 | $53.22 | $0.48 | 21.6% | 7.1% |
| Totals | 11.6% | 7.1% | |||
| 11/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MSGN | $16.67 | $23.25 | $0.00 | 39.5% | 2.1% |
| CELG | $100.60 | $92.51 | $0.00 | -8.0% | 2.1% |
| EVC | $5.78 | $6.50 | $0.05 | 13.3% | 2.1% |
| SIMO | $46.88 | $44.61 | $0.30 | -4.2% | 2.1% |
| VIAB | $24.41 | $32.87 | $0.20 | 35.5% | 2.1% |
| Totals | 15.2% | 2.1% |
| 2/1/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AGX | $43.55 | $39.50 | $0.00 | -9.3% | -7.0% |
| CASA | $18.81 | $18.04 | $0.00 | -4.1% | -7.0% |
| KLAC | $109.80 | $100.90 | $0.00 | -8.1% | -7.0% |
| THO | $136.33 | $127.57 | $0.00 | -6.4% | -7.0% |
| WDC | $87.74 | $80.59 | $0.00 | -8.1% | -7.0% |
| Totals | -7.2% | -7.0% |
Funny, in my May tranche, WSTC and now TIME no longer exist as public companies. So their results are frozen.
Here is a table showing overall Select results:
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 11.6% | 15.2% | -7.2% | 5.4% | 5.3% |
| Previous Tranche | -0.1% | 42.6% | 74.9% | 19.1% | 36.0% |
| Tranche -2 | 2.8% | 8.0% | 10.7% | -25.2% | -0.9% |
| Tranche -3 | 11.2% | 69.4% | -14.3% | 18.3% | 21.2% |
| Tranche -4 | 41.4% | 14.2% | 8.5% | 33.0% | 24.3% |
| Tranche -5 | 14.1% | 43.7% | 78.3% | 0.0% | 34.0% |
| MFI Overall Gain | 105.7% | 393.9% | 197.9% | 47.6% | 186.3% |
| Current Balance | 51,416 | 123,463 | 74,463 | 36,912 | 286,254 |
| R3K Current Tranche | 7.1% | 2.1% | -7.0% | 10.1% | 3.1% |
| R3K Overall Gain | 105.2% | 109.3% | 87.7% | 75.6% | 94.5% |
| R3K Balance | 51,300 | 52,334 | 46,916 | 43,906 | 194,457 |
| Annualized IRR | 14.0% | 35.6% | 24.2% | 8.5% | 20.6% |
Even with the 5% drop this past week, my annualized IRR is over 20%.
Here is a table showing how $100,000 invested at start would have grown quarter by quarter:
| Date | Differential | MFI Value | R3K Value |
| 1/1/2013 | -1.78% | 102,798 | 104,575 |
| 4/1/2013 | -0.43% | 106,804 | 107,234 |
| 7/1/2013 | 4.29% | 114,888 | 110,597 |
| 10/1/2013 | 19.67% | 138,655 | 118,990 |
| 1/1/2014 | 26.63% | 157,138 | 130,503 |
| 4/1/2014 | 30.38% | 162,991 | 132,616 |
| 7/1/2014 | 39.23% | 177,971 | 138,740 |
| 10/1/2014 | 29.38% | 168,321 | 138,944 |
| 1/1/2015 | 28.17% | 174,306 | 146,140 |
| 4/1/2015 | 29.95% | 178,565 | 148,612 |
| 7/1/2015 | 62.69% | 211,437 | 148,743 |
| 10/1/2015 | 43.12% | 181,175 | 138,052 |
| 1/1/2016 | 63.33% | 209,514 | 146,186 |
| 4/1/2016 | 47.34% | 195,770 | 148,430 |
| 7/1/2016 | 50.41% | 201,092 | 150,680 |
| 10/1/2016 | 42.98% | 198,563 | 155,582 |
| 1/1/2017 | 45.60% | 209,503 | 163,936 |
| 4/1/2017 | 55.70% | 229,473 | 173,735 |
| 7/1/2017 | 60.28% | 239,060 | 178,782 |
| 10/1/2017 | 75.60% | 262,489 | 186,886 |
| 1/1/2018 | 92.19% | 291,114 | 198,926 |
| Current | 91.80% | 286,254 | 194,457 |
MFI Formula
This is my second real money MFI portfolio. While "Select", as it suggests is very free form in how i pick the names - "Formula" is the opposite. I pick all stocks by a formula and a random number generator. It has generally trailed the benchmark, but it is tightening back up. I do still believe strongly in this approach and will be adding about 30 to 35% to my tranches in 2018. Same tables:
| Stock | Last Week | Current | Dividend | Change |
| GILD | 81.73 | 79.32 | - | -2.9% |
| OMC | 74.91 | 76.95 | - | 2.7% |
| GME | 16.23 | 16.17 | - | -0.4% |
| SYNT | 22.25 | 21.48 | - | -3.5% |
| CSCO | 40.93 | 39.53 | - | -3.4% |
| HPQ | 22.48 | 20.11 | - | -10.5% |
| AMGN | 187.01 | 173.46 | - | -7.2% |
| HRB | 25.46 | 24.92 | - | -2.1% |
| BKE | 19.60 | 21.40 | - | 9.2% |
| DIN | 53.96 | 53.91 | - | -0.1% |
| RGR | 50.65 | 49.55 | - | -2.2% |
You can see that the stocks held up better here. OMC and BKE both solidly in the black. And only one double digit loser.
| 4/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $18.45 | $21.40 | $2.75 | 30.9% | 11.9% |
| CSCO | $33.76 | $39.53 | $1.16 | 20.5% | 11.9% |
| GILD | $67.50 | $79.32 | $1.56 | 19.8% | 11.9% |
| OMC | $85.53 | $76.95 | $1.65 | -8.1% | 11.9% |
| SYNT | $16.76 | $21.48 | $0.00 | 28.2% | 11.9% |
| Totals | 18.3% | 11.9% | |||
| 7/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $30.98 | $39.53 | $0.58 | 29.5% | 8.6% |
| GME | $20.95 | $16.17 | $0.76 | -19.2% | 8.6% |
| HPQ | $17.60 | $20.11 | $0.27 | 15.8% | 8.6% |
| RGR | $60.70 | $49.55 | $0.44 | -17.6% | 8.6% |
| SYNT | $16.21 | $21.48 | $0.00 | 32.5% | 8.6% |
| Totals | 8.2% | 8.6% | |||
| 10/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| DIN | $43.14 | $53.91 | $0.97 | 27.2% | 4.0% |
| GILD | $82.85 | $79.32 | $0.52 | -3.6% | 4.0% |
| GME | $20.50 | $16.17 | $0.38 | -19.3% | 4.0% |
| HPQ | $20.22 | $20.11 | $0.13 | 0.1% | 4.0% |
| OMC | $74.80 | $76.95 | $0.55 | 3.6% | 4.0% |
| Totals | 1.6% | 4.0% | |||
| 1/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AMGN | $177.11 | $173.46 | $0.00 | -2.1% | -2.8% |
| GME | $18.06 | $16.17 | $0.00 | -10.4% | -2.8% |
| GILD | $71.64 | $79.32 | $0.00 | 10.7% | -2.8% |
| HRB | $26.34 | $24.92 | $0.00 | -5.4% | -2.8% |
| OMC | $72.81 | $76.95 | $0.00 | 5.7% | -2.8% |
| Totals | -0.3% | -2.8% |
Hanging in there. The April tranche is pretty good.
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | 1.6% | -0.3% | 18.3% | 8.2% | 6.3% |
| Previous Tranche | 7.0% | 16.5% | 25.2% | 26.7% | 19.2% |
| Tranche -2 | 5.5% | 9.3% | -0.2% | -12.5% | 0.5% |
| Tranche -3 | 0.5% | 11.0% | 0.0% | 0.0% | 2.9% |
| MFI Overall Gain | 15.2% | 40.9% | 47.7% | 20.0% | 30.9% |
| Current Balance | 287,849 | 352,170 | 369,402 | 299,620 | 1,309,041 |
| R3K Current Tranche | 4.0% | -2.8% | 11.9% | 8.6% | 5.4% |
| R3K Overall Gain | 39.5% | 31.1% | 30.5% | 26.5% | 31.9% |
| R3K Balance | 348,489 | 327,734 | 326,606 | 315,848 | 1,318,676 |
| Annualized IRR | 4.3% | 11.6% | 14.5% | 7.2% | 9.4% |
9.4% annualized IRR, not stellar, but not terrible (this started October 2014). Current 4 tranches leading benchmark 6.3% to 5.4%.
| Date | Differential | Value | R3K Value |
| 10/1/2014 | 0.00% | 100,000 | 100,000 |
| 1/1/2015 | -0.33% | 100,664 | 100,995 |
| 4/1/2015 | 5.09% | 106,781 | 101,695 |
| 7/1/2015 | 4.82% | 106,423 | 101,604 |
| 10/1/2015 | 6.39% | 100,703 | 94,312 |
| 1/1/2016 | -3.36% | 96,830 | 100,012 |
| 4/1/2016 | 0.34% | 102,371 | 101,548 |
| 7/1/2016 | -0.19% | 103,022 | 103,216 |
| 10/1/2016 | -0.85% | 106,377 | 107,230 |
| 1/1/2017 | 1.57% | 113,406 | 111,832 |
| 4/1/2017 | -1.86% | 116,227 | 118,091 |
| 7/1/2017 | -2.40% | 119,144 | 121,545 |
| 10/1/2017 | -2.56% | 124,448 | 127,007 |
| 1/1/2018 | -3.63% | 131,460 | 135,086 |
| Current | -0.96% | 130,904 | 131,868 |
So the quarter by quarter numbers illustrate that MFI Formula is now less than 1 percentage point behind the benchmark. Maybe next week we will take the lead!
Dividend Portfolio
For those of you who read for MFI, c'est fini. Now I will briefly document my other two legs of investing stool.
As the "experts" say this sell off is due to expectations of higher interest rates, it does make sense that dividend stocks might lose value. But one really lost value this week, see if you can spot it.
| Dividend Stocks | Start | Current | Divvy | Overall Pct Gain | Weekly Pct Gain | 12/30/17 Price | Yield |
| OIBAX | 5.91 | 6.00 | 0.19 | 4.7% | -1.3% | 5.96 | 4.0% |
| TK | 7.37 | 7.60 | 0.10 | 4.5% | -6.1% | 9.32 | 2.9% |
| KCLI | 48.89 | 43.31 | 0.60 | -10.2% | -1.1% | 45.25 | 2.5% |
| KNOP | 21.30 | 19.85 | 0.52 | -4.4% | -0.7% | 20.75 | 10.5% |
| GLOP-PB | 25.36 | 24.85 | - | -2.0% | -1.8% | 25.36 | 8.2% |
| CPLP | 3.54 | 3.04 | 0.16 | -9.6% | -5.9% | 3.36 | 10.5% |
| TGP | 18.28 | 18.35 | 0.14 | 1.2% | -5.9% | 20.15 | 3.1% |
| NS | 37.98 | 24.29 | 1.92 | -31.0% | -24.7% | 29.95 | 9.9% |
| LADR | 13.01 | 14.36 | 0.62 | 15.1% | 0.5% | 13.63 | 8.8% |
| JQC | 8.18 | 8.06 | 0.67 | 6.8% | -0.7% | 8.22 | 7.1% |
| PSXP | 47.39 | 49.26 | 1.71 | 7.6% | -4.6% | 52.35 | 5.5% |
| FDEU | 18.40 | 18.00 | 1.06 | 3.6% | -7.2% | 18.83 | 8.1% |
| ISBC | 13.25 | 13.24 | 0.24 | 1.8% | -4.1% | 13.88 | 2.7% |
| EVG | 14.46 | 13.76 | 0.41 | -2.0% | 0.3% | 14.35 | 6.7% |
| RILY | 15.58 | 19.25 | 0.21 | 24.9% | 4.1% | 18.10 | 2.5% |
| RLJ-PA | 28.45 | 25.58 | 0.98 | -6.7% | -0.7% | 27.01 | 7.7% |
| NRZ | 16.56 | 16.30 | 1.17 | 5.5% | -4.7% | 17.88 | 12.3% |
| SBRA | 22.28 | 16.66 | 0.91 | -21.1% | -5.5% | 18.77 | 10.8% |
| DSL | 19.47 | 19.96 | 1.99 | 12.8% | -0.9% | 20.19 | 9.0% |
| OCSI | 8.68 | 7.73 | 0.38 | -6.5% | -5.5% | 8.40 | 9.8% |
| TGONF | 11.04 | 13.05 | 1.79 | 34.4% | -2.3% | 13.30 | 5.4% |
| AMID | 13.25 | 12.10 | 0.41 | -5.6% | -14.8% | 13.35 | 13.6% |
| TOO | 2.33 | 2.25 | 0.01 | -3.2% | -5.5% | 2.36 | 1.8% |
| O | 25.72 | 48.90 | 21.28 | 172.8% | -4.6% | 57.02 | 5.2% |
| Totals | 0.5% | -3.8% | 6.6% |
NS announced they are merging with general partner NSH and axing dividend 40%. That is not what you want to hear and NS sold off hard this week. My view is selloff was way over done. But doubt I will add more shares. AMID also went down 14.8%, so it does seem MLPs in the energy space are under duress.
My small banks hung in there, down 3.1%.
| Bank | Start | Current | Dividends | Change | Yield |
| ACBI | 16.99 | 17.05 | - | 0.3% | 0.0% |
| ASB | 25.69 | 23.90 | - | -6.9% | 2.5% |
| FBIZ | 23.69 | 24.05 | 0.14 | 2.1% | 2.3% |
| FULT | 18.81 | 18.05 | 0.11 | -3.4% | 2.5% |
| FNB | 14.47 | 13.75 | - | -5.0% | 3.4% |
| MSBI | 32.96 | 30.50 | - | -7.4% | 2.9% |
| NRIM | 37.47 | 34.05 | 0.21 | -8.6% | 2.7% |
| PACW | 48.30 | 51.60 | - | 6.8% | 4.0% |
| SONA | 17.13 | 15.89 | 0.08 | -6.7% | 2.0% |
| WNEB | 10.88 | 9.95 | - | -8.5% | 1.6% |
| Total | -3.7% | 2.4% |
Miscellaneous
Not doing very well here, though as I mentioned I did add some $ here at end of week. Here are some of biggest losers (yuck).
EXXI was down 19%. This is really turning out to be a ginormous mistake.
FUNC was down 13%. It was such a bloodbath week, I had not even noticed that. Weird. I think that is a yahoo finance error. Yahoo finance shows 15.10, but other sources show it closed at 16.85! I am too lazy to override, so should have a great week next week.
WLL was down 16%. I am seeing the energy trend with EXXI, WLL, NS and AMID all selling off. I do think I may look to this space next week. It has dropped way, way too much.
Speaking of big drops, my gold stocks crashed and burned.
| Miner | Start | Current | Change | 2018 Change |
| TORXF | 9.90 | 9.16 | -7.5% | -3.6% |
| SAND | 4.48 | 4.58 | 2.2% | -8.2% |
| NSU | 2.38 | 2.17 | -8.8% | -11.1% |
| KLDX | 2.41 | 1.57 | -34.9% | -39.8% |
| KL | 14.49 | 13.29 | -8.3% | -13.5% |
| GSS | 0.87 | 0.69 | -20.1% | -22.2% |
| FSM | 4.24 | 4.28 | 0.9% | -18.0% |
| EXK | 2.14 | 2.11 | -1.4% | -11.7% |
| BTG | 2.61 | 2.71 | 3.8% | -12.6% |
| EGO | 1.18 | 1.14 | -3.4% | -20.3% |
| Total | -7.7% | -16.1% |
Down 16% for the year.
Enough depressing stuff. Next week hopefully better.
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