Well, we have made it to the halfway point of 2018. But like Eeyore was a bit disappointed with Piglet's popped balloon, I am a mite disappointed in the performance of my portfolios.
Actually, golf might be a better metaphor. I am hitting enough good shots to keep me coming back to play another round... but when I look at my scorecard, I am just not very excited.
I did create a guide recently for new readers to my blog that point you to some fascinating/interesting
And as a free bonus, I also discuss how my non-MFI investments are doing (generally poorly) in 2nd half of my blog.
Onwards.
Last Month
As my 20 regular readers know, I have decided to only update once a month. I am doing this as it doesn't really add value to look at value investments once a week. You could argue even once a month is too much, but then why have a blog? Here is a table showing how I am faring at the halfway point (the squeamish may want to avert their eyes):
| Component | YTD | 2nd Quarter | Month Change |
| Overall | -0.4% | +2.6% | +0.5% |
| MFI Select | -5.4% | -7.1% | -1.4% |
| MFI Formula | +6.2% | +4.9% | +3.3% |
| MFI Combined | +0.2% | -1.3% | +0.8% |
| Non MFI | -0.8% | +4.8% | +0.3% |
| Dividend Index | -2.2% | +1.4% | +0.9% |
| R3K Index | +3.0% | +3.8% | +0.2% |
| Blended Index | +0.7% | +2.7% | +0.6% |
| MFI Index | +12.8% | +5.7% | +1.5% |
| GARIX | -1.4% | -1.6% | -1.6% |
So let us take our time and walk through this table. First and foremost, I am slightly in the red for the first half (overall) at -0.4%. This compares to my MFI total (my real money) which is up 0.2% (yay!), the MFI Index (50 stocks from website at start of year) up a stunning 12.8%. Then the other MFI benchmark is GARIX, a Gotham mutual fund - down a depressing 1.4%. Tough sledding.
The non MFI benchmarks I use are the Russell 3000, which was up 3% and an index of dividend holdings, down 2.2%. Nothing came easily (except for MFI Index) this far in 2018. You can peruse rest of table - I did do much better in 2nd quarter than first quarter... but that was driven by my non-MFI portfolio. My MFI portfolios, especially Select, really struggled in Q2 (down 7%).
I have made major changes in portfolio composition in June. The biggest change has been moving away from some of my closed end picks and REITs and into Energy. I also closed out my Russell 3000 reconstitution arbitrage... it made a little money, but was not worth the effort at all.
MFI Select
I have two portfolios of real money in MFI. (1) MFI Select and (2) MFI Formula. As the name connotes, MFI Select allows me significant discretion in how I select the stocks. The approach consists of 4 tranches of 5 stocks with each tranche held for a year. The stocks can be from the official screen or my own internal screen. I started this approach back in August 2012 - so almost 6 years now.
I had quit MFI investing back in July 2011, licked my wounds and thought about what doesn't work in MFI. My answer was that there are too many "stinker" stocks, meaning those that drop by 30% or more in value. An analysis I did at the time showed that over time about 14% of stocks have been stinkers. So my new focus was to avoid these stocks - the primary way to do this (in my view) was to weed out stocks that don't have the characteristics of Jake's Bubble Gum Shop from TLBTBTM. Stocks that do not have earnings from the past twelve months that they can replicate are kicked out.
My revised approach has worked well - although you can see from the first table I published it is down 5.4% so far in 2018. But it has hit rough stretches before. Here are the current open 4 tranches:
| 8/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GHC | $591.10 | $586.10 | $3.81 | -0.2% | 12.9% |
| ICHR | $19.80 | $21.22 | $0.00 | 7.2% | 12.9% |
| MD | $43.00 | $43.28 | $0.00 | 0.7% | 12.9% |
| SIMO | $43.05 | $52.89 | $0.90 | 24.9% | 12.9% |
| RHI | $44.15 | $65.10 | $1.04 | 49.8% | 12.9% |
| Totals | 16.5% | 12.9% | |||
| 11/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MSGN | $16.67 | $23.95 | $0.00 | 43.7% | 7.6% |
| CELG | $100.60 | $79.42 | $0.00 | -21.1% | 7.6% |
| EVC | $5.78 | $5.00 | $0.15 | -10.9% | 7.6% |
| SIMO | $46.88 | $52.89 | $0.60 | 14.1% | 7.6% |
| VIAB | $24.41 | $30.16 | $0.60 | 26.0% | 7.6% |
| Totals | 10.4% | 7.6% | |||
| 2/1/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AGX | $43.55 | $40.95 | $0.25 | -5.4% | -2.0% |
| CASA | $18.81 | $16.33 | $0.00 | -13.2% | -2.0% |
| KLAC | $109.80 | $102.53 | $1.34 | -5.4% | -2.0% |
| THO | $136.33 | $97.39 | $0.74 | -28.0% | -2.0% |
| WDC | $87.74 | $77.41 | $1.00 | -10.6% | -2.0% |
| Totals | -12.5% | -2.0% | |||
| 5/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CAAP | $12.19 | $8.44 | $0.00 | -30.8% | 4.1% |
| TGNA | $10.51 | $10.85 | $0.07 | 3.9% | 4.1% |
| DISCA | $23.85 | $27.50 | $0.00 | 15.3% | 4.1% |
| FTSI | $19.39 | $14.24 | $0.00 | -26.6% | 4.1% |
| ICHR | $21.96 | $21.22 | $0.00 | -3.4% | 4.1% |
| Totals | -8.3% | 4.1% |
So you can see my August and November tranches are beating the R3K (Russell 3000) benchmark. But February and May are trailing (badly). And I have the potential for 3 stinkers: CAAP, FTSI and THO. CASA has fallen a ton, it was up 60% at one point and is now down 13%. On the flip side, EVC has rallied quite a bit (it was down 28% at one point).
CAAP woes are a function of Argentinian economy. I do think they are a baby being thrown out with bathwater. FTSI does worry me a bit - though by all metrics it is insanely cheap. I am a bit worried that the upcoming slowdown in Permian Basin due to pipeline capacity being maxed out will cause some activity to slow down until pipelines are built/expanded.
Here is a table showing overall results over time:
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | 16.5% | 10.4% | -12.5% | -8.3% | -0.5% |
| Previous Tranche | -0.1% | 42.6% | 74.9% | -3.6% | 31.6% |
| Tranche -2 | 2.8% | 8.0% | 10.7% | 19.1% | 10.2% |
| Tranche -3 | 11.2% | 69.4% | -14.3% | -25.2% | 10.3% |
| Tranche -4 | 41.4% | 14.2% | 8.5% | 18.3% | 20.6% |
| Tranche -5 | 14.1% | 43.7% | 78.3% | 33.0% | 42.3% |
| MFI Overall Gain | 114.7% | 373.1% | 180.8% | 23.9% | 173.1% |
| Current Balance | 53,671 | 118,277 | 70,199 | 30,977 | 273,125 |
| R3K Current Tranche | 12.9% | 7.6% | -2.0% | 4.1% | 5.6% |
| R3K Overall Gain | 116.2% | 120.6% | 97.8% | 85.1% | 104.9% |
| R3K Balance | 54,047 | 55,147 | 49,448 | 46,278 | 204,921 |
| Annualized IRR | 13.9% | 31.8% | 21.0% | 4.2% | 17.7% |
This table essentially has aggregated results for every tranche I have had (open or closed). The open ones are in the "Current Tranche" row and should be the same numbers as in the detailed tables I published further up. So the five May 2018 stocks are down 8.3%. You can see my 4 current tranches are down an aggregate 0.5% (boo) and the Russell 3000 current is up 5.6%. So i am definitely trailing in the open stock department.
But overall, my current balance is 273,125 (this assumes I started with a hypothetical $100,000 and then always roll over money at anniversary dates) compared to Russell 3000 overall at 204,921. And the final row shows my annualized IRR (Internal rate of return) is 17.7%. Yes, it was over 20% back in March/April - but 17.7% is still very respectable.
Here is a table showing the change of hypothetical $100,000 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 |
| 4/1/2018 | 96.21% | 293,665 | 197,451 |
| Current | 68.20% | 273,125 | 204,921 |
So you see the same figures at bottom (273.125 to 204,921 for benchmark). But you can also see I have dropped 7% since April 1st while the benchmark has gained 4%. If you look back in time at this table, you'll see other quarters where I struggled. It happens. I still have full confidence in this approach.
Finally, here is a table showing the past month movement by stock:
| Stock | Last Month | Current | Dividend | Change |
| ICHR | 24.88 | 21.22 | - | -14.7% |
| SIMO | 48.63 | 52.89 | - | 8.8% |
| CASA | 19.21 | 16.33 | - | -15.0% |
| MSGN | 19.30 | 23.95 | - | 24.1% |
| VIAB | 27.10 | 30.16 | 0.20 | 12.0% |
| DISCA | 21.09 | 27.50 | - | 30.4% |
| AGX | 38.70 | 40.95 | - | 5.8% |
| KLAC | 113.23 | 102.53 | - | -9.4% |
| FTSI | 18.94 | 14.24 | - | -24.8% |
| CAAP | 11.94 | 8.44 | - | -29.3% |
| WDC | 83.51 | 77.41 | - | -7.3% |
| TGNA | 10.37 | 10.85 | 0.07 | 5.3% |
| RHI | 63.68 | 65.10 | - | 2.2% |
| THO | 92.60 | 97.39 | - | 5.2% |
| CELG | 78.68 | 79.42 | - | 0.9% |
| EVC | 4.00 | 5.00 | 0.05 | 26.3% |
| MD | 45.85 | 43.28 | - | -5.6% |
| GHC | 580.85 | 586.10 | - | 0.9% |
So you can see media stocks, like VIAB, MSGN, and DISCA really popped this month - helped a great deal by courts ruling T could buy TWX. But most my tech names (WDC, CASA, KLAC, and ICHR) struggled. CAAP and FTSI we've already discussed. I still like the portfolio, after a dreadful May, June was not too bad and I see some names here that could rally.
MFI Formula
As I mentioned earlier, my two real money MFI portfolios are (1) Select and (2) Formula. Formula also consists of 4 tranches with 5 stocks in each tranche. i started it in october 2014. It is the opposite of Select - here I pick all my stocks via a formula and a random number generator. I do tend to get the same stocks picked in multiple tranches, but I am ok with that. I do have a July Tranche that I will be closing at the end of next week. I plan to start a new tranche and will likely increase my real $ allocation to it. I have confidence this approach works. Here are the 4 open tranches:
| 7/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $30.98 | $43.03 | $0.91 | 41.8% | 14.4% |
| GME | $20.95 | $14.57 | $1.52 | -23.2% | 14.4% |
| HPQ | $17.60 | $22.69 | $0.53 | 31.9% | 14.4% |
| RGR | $60.70 | $56.00 | $0.99 | -6.1% | 14.4% |
| SYNT | $16.21 | $32.09 | $0.00 | 98.0% | 14.4% |
| Totals | 28.5% | 14.4% | |||
| 10/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| DIN | $43.14 | $74.80 | $2.23 | 78.6% | 9.6% |
| GILD | $82.85 | $70.84 | $1.66 | -12.5% | 9.6% |
| GME | $20.50 | $14.57 | $1.14 | -23.4% | 9.6% |
| HPQ | $20.22 | $22.69 | $0.40 | 14.2% | 9.6% |
| OMC | $74.80 | $76.27 | $1.75 | 4.3% | 9.6% |
| Totals | 12.2% | 9.6% | |||
| 1/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AMGN | $177.11 | $184.59 | $2.64 | 5.7% | 2.5% |
| GME | $18.06 | $14.57 | $0.76 | -15.1% | 2.5% |
| GILD | $71.64 | $70.84 | $1.14 | 0.5% | 2.5% |
| HRB | $26.34 | $22.78 | $0.49 | -11.7% | 2.5% |
| OMC | $72.81 | $76.27 | $1.20 | 6.4% | 2.5% |
| Totals | -2.8% | 2.5% | |||
| 4/3/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AMGN | $166.46 | $184.59 | $1.32 | 11.7% | 5.8% |
| VIAB | $29.20 | $30.16 | $0.20 | 4.0% | 5.8% |
| GILD | $72.71 | $70.84 | $0.57 | -1.8% | 5.8% |
| TUP | $47.32 | $41.24 | $0.69 | -11.4% | 5.8% |
| EGOV | $13.29 | $15.55 | $0.08 | 17.6% | 5.8% |
| Totals | 4.0% | 5.8% |
At least in the open tranche department, you can quickly see that MFI Formula is doing better than MFI Select. Again, only 2 of 4 tranches are leading, but I am not getting Moose Stomped in any of them by the benchmark. And you can see I have no stinkers (thanks to recent rally in GME). SYNT has been a great, great pick - up almost 100% in the July tranche. I do still also have a lot of confidence in GME - I see where PE is looking at them... that could easily take them to $20 (Sycamore Partners said to be interested in GameStop). I actually hope Mr Random picks GME again for me when I pick new July tranche.
Here is table showing aggregated results:
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | 12.2% | -2.8% | 4.0% | 28.5% | 8.8% |
| Previous Tranche | 7.0% | 16.5% | 21.3% | 26.7% | 18.1% |
| Tranche -2 | 5.5% | 9.3% | 25.2% | -12.5% | 6.9% |
| Tranche -3 | 0.5% | 11.0% | -0.2% | 0.0% | 2.8% |
| MFI Overall Gain | 27.3% | 37.3% | 57.6% | 42.5% | 41.2% |
| Current Balance | 317,966 | 343,217 | 394,236 | 355,844 | 1,411,263 |
| R3K Current Tranche | 9.6% | 2.5% | 5.8% | 14.4% | 8.1% |
| R3K Overall Gain | 47.0% | 38.2% | 37.1% | 33.2% | 38.9% |
| R3K Balance | 367,221 | 345,426 | 343,096 | 332,758 | 1,388,500 |
| Annualized IRR | 6.6% | 9.5% | 15.0% | 12.5% | 10.9% |
So you can see the hypothetical $1,000,000 at start (not sure why I use $1m here are $100,000 for MFI Select) has grown to a respectable $1,411,263. That is 10.9% annualized IRR. And the current four tranches are up an aggregate 8.8% which is beating benchmark (8.1%). That is a solid achievement in today's world where value investing is struggling. Note the next time you see this table, the July current tranche will have hit one year and will roll down to to previous tranche row and I'll have a new current tranche for July. The current tranche will miss the 26.7% gain!
Side note, I can't believe my January tranche is down 2.8% when the MFI Index (which also started around January 1st) is up 13%. Here is how $100,000 has grown quarter by quarter:
| 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 |
| 4/1/2018 | -0.16% | 133,734 | 133,898 |
| Current | 2.28% | 141,126 | 138,849 |
So, back in the lead... it has been an epic battle with the benchmark. But 2018 has been good for MFI Formula going from 131,460 to 141,126.
Here are the individual stocks for the month:
| Stock | Last Month | Current | Dividend | Change |
| GILD | 67.40 | 70.84 | 0.57 | 5.9% |
| AMGN | 179.62 | 184.59 | - | 2.8% |
| OMC | 72.08 | 76.27 | 0.60 | 6.6% |
| GME | 13.20 | 14.57 | 0.38 | 13.3% |
| HPQ | 22.03 | 22.69 | 0.13 | 3.6% |
| VIAB | 27.10 | 30.16 | - | 11.3% |
| EGOV | 15.35 | 15.55 | 0.08 | 1.8% |
| TUP | 42.16 | 41.24 | 0.68 | -0.6% |
| DIN | 63.45 | 74.80 | - | 17.9% |
| SYNT | 31.50 | 32.09 | - | 1.9% |
| HRB | 27.45 | 22.78 | 0.25 | -16.1% |
| CSCO | 42.71 | 43.03 | - | 0.7% |
| RGR | 61.25 | 56.00 | - | -8.6% |
Wow, that is a great month. Note that I list the stocks (roughly) in descending order of size. So the "bad" stocks for the month HRB and RGR, are two of my smallest holdings. GME rallied on PE news, VIAB on general media frenzy (despite getting dumped by CBS) and DIN (it seems to me) has been helped by favorable publicity by Ihop starting to sell burgers.
MFI Index
I do maintain an index of 50 MFI stocks that I reconstitute once a year. That index has been great this year (up about 13%). Here is how it has done year by year since 2006 versus benchmark:
| Annual | Inception to Date | |||
| Year | Russell | MFI | Russell ITD | MFI ITD |
| 2006 | 11.4% | 15.0% | 11.4% | 15.0% |
| 2007 | 4.1% | -6.7% | 16.0% | 7.3% |
| 2008 | -37.0% | -38.0% | -27.0% | -33.4% |
| 2009 | 32.5% | 45.2% | -3.3% | -3.3% |
| 2010 | 18.4% | 22.8% | 14.5% | 18.7% |
| 2011 | -0.6% | -10.5% | 13.9% | 6.2% |
| 2012 | 16.4% | 9.7% | 32.6% | 16.6% |
| 2013 | 33.0% | 51.7% | 76.3% | 76.8% |
| 2014 | 12.3% | 12.1% | 98.0% | 98.1% |
| 2015 | 0.4% | -8.9% | 98.7% | 80.4% |
| 2016 | 12.5% | 13.2% | 123.5% | 104.2% |
| 2017 | 20.8% | 4.7% | 170.1% | 113.9% |
| 2018 | 3.0% | 12.8% | 178.2% | 141.3% |
So since 2006 (in total) my MFI Index is trailing benchmark 141.3% to 178.2%. I know, that is a bit disappointing. We were leading going in to 2015, but it has been very tough sledding of late for value stocks.
Here are the current stocks in my index and how they've done for the year. This index is purely for tracking, I have not bought the index as a basket of stocks with real money. I would think individually about the stocks and whether income can be replicated.
| Stock | Start | 29-Mar | Current | YTD Change | Last Quarter |
| AMAG | 13.25 | 20.15 | 19.50 | 47.2% | -3.2% |
| AMCX | 54.08 | 51.70 | 62.20 | 15.0% | 20.3% |
| ABC | 91.82 | 86.59 | 86.03 | -6.3% | -0.6% |
| AMGN | 173.90 | 171.80 | 187.23 | 7.7% | 9.0% |
| AGX | 45.00 | 42.95 | 41.45 | -7.9% | -3.5% |
| BIVV | 53.92 | 105.00 | 105.00 | 94.7% | 0.0% |
| HRB | 26.22 | 25.65 | 23.27 | -11.3% | -9.3% |
| BPT | 20.10 | 25.15 | 32.40 | 61.2% | 28.8% |
| ABCD | 5.68 | 11.20 | 11.15 | 96.3% | -0.4% |
| CPLA | 77.40 | 87.78 | 99.56 | 28.6% | 13.4% |
| CASA | 17.76 | 29.34 | 16.33 | -8.1% | -44.3% |
| CSCO | 38.30 | 43.18 | 43.65 | 14.0% | 1.1% |
| CNCE | 25.87 | 22.90 | 16.83 | -34.9% | -26.5% |
| CJREF | 9.21 | 4.89 | 4.13 | -55.2% | -15.5% |
| DLX | 76.84 | 74.31 | 66.81 | -13.1% | -10.1% |
| DIN | 50.73 | 66.21 | 76.06 | 49.9% | 14.9% |
| DISCA | 22.38 | 21.43 | 27.50 | 22.9% | 28.3% |
| EGRX | 53.42 | 52.69 | 75.66 | 41.6% | 43.6% |
| EVC | 7.15 | 4.75 | 5.10 | -28.7% | 7.4% |
| ESRX | 74.64 | 69.08 | 77.21 | 3.4% | 11.8% |
| GME | 17.95 | 12.96 | 15.29 | -14.8% | 18.0% |
| GILD | 71.64 | 75.96 | 71.98 | 0.5% | -5.2% |
| HSII | 24.55 | 31.38 | 35.26 | 43.6% | 12.4% |
| HPQ | 21.01 | 22.05 | 22.96 | 9.3% | 4.1% |
| INVA | 14.19 | 16.67 | 13.80 | -2.7% | -17.2% |
| IDCC | 76.15 | 73.95 | 81.60 | 7.2% | 10.3% |
| IPG | 20.16 | 23.24 | 23.86 | 18.4% | 2.7% |
| KLAC | 105.07 | 109.60 | 103.87 | -1.1% | -5.2% |
| LEE | 2.35 | 1.95 | 2.85 | 21.3% | 46.2% |
| MCFT | 22.22 | 25.20 | 28.95 | 30.3% | 14.9% |
| MPAA | 24.99 | 21.43 | 18.71 | -25.1% | -12.7% |
| MSGN | 20.25 | 22.60 | 23.95 | 18.3% | 0.0% |
| NHTC | 15.19 | 19.14 | 25.28 | 66.4% | 32.1% |
| NLS | 13.35 | 13.45 | 15.70 | 17.6% | 16.7% |
| EGOV | 16.60 | 13.30 | 15.71 | -5.4% | 18.1% |
| OMC | 72.83 | 73.27 | 77.47 | 6.4% | 5.7% |
| PTN | 0.86 | 1.09 | 0.97 | 12.9% | -11.0% |
| PDLI | 2.74 | 2.94 | 2.34 | -14.6% | -20.4% |
| PCOA | 575.00 | 645.00 | 685.00 | 19.1% | 6.2% |
| PBI | 11.18 | 11.08 | 8.95 | -20.0% | -19.3% |
| SRNE | 3.80 | 5.15 | 7.20 | 89.5% | 39.8% |
| SP | 37.10 | 35.60 | 37.20 | 0.3% | 4.5% |
| SYNT | 22.99 | 25.53 | 32.09 | 39.6% | 25.7% |
| TGNA | 14.08 | 11.46 | 10.99 | -21.9% | -4.1% |
| MEET | 2.82 | 2.09 | 4.48 | 58.9% | 114.4% |
| TVTY | 36.55 | 39.65 | 35.20 | -3.7% | -11.2% |
| TRNC | 17.59 | 16.42 | 17.28 | -1.8% | 5.2% |
| UTHR | 147.95 | 112.36 | 113.15 | -23.5% | 0.7% |
| VEC | 30.85 | 37.24 | 30.82 | -0.1% | -17.2% |
| VIAB | 30.81 | 31.26 | 30.56 | -0.8% | -2.2% |
| Total | 21,371 | 12.8% |
Non MFI
For those of you here to read about MFI. I am done. I also have a chunk of my assets in other portfolios. These have struggled a bit for the year (down 0.8%) but they had a great 2nd quarter, up 4.8%. I make many of picks by reading and subscribing to many sources on the internet.
I measure my approach here primarily in baskets of stocks. I have four basket groupings I'll list here (1) Energy, (2) Shipping, (3) Small Banks and (4) Bio Tech. Obviously, you should do your own research as I am far from an expert in these fields.
But here is elevator pitch on each area.
Energy - we are in a transition period moving from fossil fuels to solar and wind. Electric vehicles are quickly becoming very viable. Solar is now (from what I read) getting to be cheaper than traditional energy and will start being embraced everywhere. Oil is interesting, while it will be replaced by alternatives, we still need it globally. But companies are not willing to make LT investments in expensive oil as demand could fall off a lot by 2025. So, companies that can produce quicker/faster cheap oil make make a lot of money next 3 to 5 years as supply growth will be constrained.
Shipping is an under-followed area. It is the ultimate commodity, so when you have too many ships or trade drops off, then prices can really drop. But right now, pricing is improving. And new ships are becoming a lot more expensive to build. Finally, there are new shipping environmental regulations coming in 2020 that may incent more scrapping of old ships (and the demand for scrap steel is high) and may also incent shipping companies to have their ships go more slowly.
Small Banks is an area I believe will see consolidation. They are also large beneficiaries of tax reform and not as impacted by global trade wars and such.
Biotech - exciting area with all the new gene editing potential out there. These stocks can be homerun in nature but can also crash and burn. It is an area I would suggest to putting in too much money as it is certainly risky.
Energy
| Ticker | Bought | Current | Dividend | Gain | Weight |
| APA | 40.57 | 46.75 | - | 15.2% | 0.8% |
| AR | 19.09 | 21.35 | - | 11.8% | 0.8% |
| CHK | 4.49 | 5.24 | - | 16.8% | 0.8% |
| ECA | 12.40 | 13.05 | - | 5.2% | 2.8% |
| ETP | 19.22 | 19.04 | - | -0.9% | 1.4% |
| FSLR | 51.46 | 52.66 | - | 2.3% | 1.1% |
| KMI | 16.73 | 17.67 | - | 5.6% | 2.3% |
| OXY | 83.04 | 83.68 | 0.37 | 1.2% | 1.5% |
| PXD | 194.94 | 189.24 | - | -2.9% | 0.7% |
| RRC | 15.96 | 16.73 | - | 4.8% | 0.8% |
| SEDG | 47.39 | 47.85 | - | 1.0% | 1.2% |
| SN | 4.00 | 4.52 | - | 13.0% | 0.8% |
| SPWR | 7.69 | 7.67 | - | -0.3% | 0.7% |
| SWN | 4.74 | 5.30 | - | 11.8% | 0.8% |
| WPX | 17.81 | 18.03 | - | 1.2% | 1.1% |
You'll see a mixture here of solar, oil and gas. I also have a few pipeline plays. This portfolio has done really well the past month.
Shipping
| Ticker | Bought | Current | Dividend | Gain |
| ANW | 1.37 | 0.66 | - | -51.6% |
| CPLP | 3.50 | 3.06 | 0.22 | -6.4% |
| DLNG | 8.10 | 8.18 | - | 0.9% |
| GLOP-PB | 25.36 | 25.53 | 0.84 | 4.0% |
| NMM | 1.97 | 1.89 | 0.02 | -3.0% |
| SSW | 6.06 | 7.50 | 0.59 | 33.5% |
| TGP | 17.89 | 16.85 | 0.23 | -4.5% |
| TK | 8.45 | 7.75 | 0.09 | -7.2% |
| TOO | 2.33 | 2.64 | 0.02 | 13.9% |
ANW has really hurt my over past month+. They have had a management takeover, which I thought would be a catalyst for great things (and perhaps it still will be). But the first thing they have done is go through everything with fine tooth comb, and they did find a chunk of receivables were there appears to have been fraud. So now they're under a cloud of worry, lenders may pull financing and perhaps other issues will be uncovered. If those things happen, I suppose common shareholders may be holding a serious bag of a smelly substance, But there is also a chance that there is not much else, some of fraudulent funds can be recovered, lenders can be convinced it isn't in their best interest to close up credit. Then stock could appreciate substantially. Stay tuned.
CPLP, DLNG and GLOP-PB are are frankly income plays. I have moved away from closed end funds and REITs, so some of these shipping names, MFI Formula, smalls banks, some mutual funds (which I don't track here) and pipelines will be amongst my primary income providers.
NMM is a dry bulk shipping company that appears to have missed the train on rising dry bulk rates. They also pay a 4% dividend. This is one of my largest holdings, so I am cheering for a catalyst.
SSW looks great, up 33%. But this was a stock I used covered calls on (something I rarely do) and am now regretting. I am capped at $7.50 and the stock has soared to $10. I could have made a boatload (I know, groan) of cash here instead of 33%. At least I get next month's dividend while I wait for call date. When I get called out, that will free up a chunk of money for me to invest elsewhere.
TGP, TK and TOO are all members of the TK group. In aggregate, this is also a huge position for me (like NMM). They have been getting their balance sheets in ship shape (I know, groan) recently, so this has pushed back some potential catalysts of increased distributions etc... but they all have great characteristics of increasing cash flows for the next 18 months. So I believe my patience will be rewarded (I added last week to TK at $7.59 and TGP at $16.08 as they have been greatly unloved).
Small Banks
| Bank | Start | Current | Dividends | Change | 2018 Change | Yield |
| ACBI | 16.99 | 19.65 | - | 15.6% | 11.6% | 0.0% |
| ASB | 25.69 | 27.30 | 0.30 | 7.5% | 7.5% | 2.1% |
| FBIZ | 23.69 | 26.00 | 0.28 | 11.0% | 17.5% | 2.1% |
| FULT | 18.81 | 16.50 | 0.35 | -10.4% | -7.8% | 2.8% |
| FNB | 14.47 | 13.42 | 0.24 | -5.6% | -2.9% | 3.5% |
| MSBI | 32.96 | 34.26 | 0.44 | 5.3% | 5.5% | 2.5% |
| NRIM | 37.47 | 39.55 | 0.69 | 7.4% | 16.8% | 2.4% |
| PACW | 48.30 | 49.42 | 1.10 | 4.6% | -1.9% | 4.6% |
| SONA | 17.13 | 17.84 | 0.16 | 5.1% | 11.3% | 2.1% |
| WNEB | 10.88 | 11.00 | 0.08 | 1.8% | 0.9% | 1.5% |
| FUNC | 17.60 | 20.45 | 0.09 | 16.7% | 17.5% | 1.7% |
| ISBC | 14.26 | 12.79 | 0.18 | -9.0% | -7.9% | 2.6% |
| OFED | 29.68 | 28.94 | 0.20 | -1.8% | 0.8% | 1.4% |
| Total | 3.7% | 5.3% | 2.3% |
I view this purely as a basket. I can't speak much to any one name. They are hard to trade as their liquidity is not very high. I do think consolidation is likely in this space, but I've been saying that for quite a while and it has been pretty much crickets.
Bio Tech
| Ticker | Bought | Current | Dividend | Gain |
| ACAD | 16.54 | 15.27 | - | -7.7% |
| AUPH | 5.53 | 5.63 | 0.20 | 5.3% |
| FENC | 11.57 | 10.44 | - | -9.8% |
| GBT | 38.33 | 45.61 | 19.0% | |
| OMER | 19.60 | 18.14 | - | -7.5% |
| SELB | 12.03 | 13.25 | - | 10.1% |
| SGMO | 16.42 | 14.20 | - | -13.5% |
| TTOO | 8.50 | 7.74 | 0.24 | -6.1% |
These are high risk, volatile names. Not for the faint of heart. I actually just sold GBT this week for a decent short term profit. But I still like the name and will look to buy on pullbacks. That is really a key strategy for me here. I will sell when a stock moves up a lot on a catalyst and then buy on a major drop that looks overdone. So my stats here won't really tell that story. I will occasionally sell calls or puts, that is why you see some numbers under dividend column.
Puts
It is not a huge part of my portfolio, but going forward I do plan to sell a couple sets of puts a month. Just because I think they're getting an attractive price and I am fine holding stock should I have to.
| Ticker | Put Date | Strike price | premium | Current Share price | Income | Current Put | Gain |
| SPWR | September | $8.00 | $1.70 | $7.67 | 4,420 | $1.35 | $910 |
| FSLR | August | $50.00 | $2.80 | $52.66 | 2,800 | $2.45 | $350 |
| SPWR | July | $8.00 | $1.40 | $7.67 | 3,640 | $0.68 | $1,872 |
| OMER | July | $16.00 | $0.95 | $18.14 | 2,850 | $0.45 | $1,500 |
| PXD | August | $195.00 | $10.90 | $189.24 | 3,270 | $10.70 | $60 |
| PXD | August | $195.00 | $14.89 | $189.24 | 4,467 | $10.70 | $1,257 |
So if SPWR is still $7.67 come July 20th, I will have to buy them for $8.00. But I will get the $1.40 in premium from selling the puts and so my basis will be $6.60 per share. I am not showing these premiums anywhere in my numbers yet, they will only drop in after the put expires.
Other Stuff
I do still have substantial holdings in some names that I will likely be looking to exit over next quarter (KCLI, NRZ, WLFC and SLSDF). I also have some other income names that I will likely retain, but may not list here often as they aren't all that exciting (LADR, T, CTL and TGONF), but they help provide cash flow so we can go out to dinner occasionally.
Dividend Index
Just a little housekeeping, here are the 40 stocks/securities in the dividend index (based on Barron's article) I created at start of year. They also have not fared so well in first 6 months:
Dividend Index
Just a little housekeeping, here are the 40 stocks/securities in the dividend index (based on Barron's article) I created at start of year. They also have not fared so well in first 6 months:
| Ticker | 12/30/2017 | Current | Dividend | YTD Change | Monthly Change | Yield |
| AMLP | 10.79 | 10.15 | 0.41 | -2.1% | 0.2% | 8.24% |
| NML | 9.38 | 8.77 | 0.33 | -3.0% | -0.3% | 7.53% |
| EPD | 26.51 | 27.67 | 0.84 | 7.5% | -0.7% | 6.14% |
| ETP | 17.92 | 19.04 | 1.13 | 12.6% | 2.6% | 11.80% |
| FDD | 13.73 | 13.19 | 0.29 | -1.8% | -5.8% | 4.93% |
| VGK | 59.15 | 56.13 | 0.75 | -3.8% | -4.5% | 3.44% |
| DDAIF | 84.57 | 64.20 | 3.25 | -20.2% | -15.5% | 6.98% |
| NVS | 83.96 | 75.54 | 2.75 | -6.8% | -0.7% | 3.93% |
| NOBL | 64.04 | 62.34 | 0.67 | -1.6% | -0.8% | 2.21% |
| VYM | 85.63 | 83.05 | 1.24 | -1.6% | -1.4% | 2.96% |
| MRK | 56.27 | 60.70 | 0.96 | 9.6% | 2.7% | 3.18% |
| PEP | 119.92 | 108.87 | 1.61 | -7.9% | 8.5% | 3.07% |
| VNQ | 82.98 | 81.46 | 1.95 | 0.5% | 4.8% | 4.28% |
| RQI | 12.65 | 12.02 | 0.48 | -1.2% | 4.7% | 5.90% |
| TCO | 65.43 | 58.76 | 1.25 | -8.3% | 9.7% | 4.36% |
| SLG | 100.93 | 100.53 | 1.55 | 1.1% | 4.9% | 3.21% |
| T | 38.88 | 32.11 | 0.98 | -14.9% | -1.2% | 6.18% |
| VZ | 52.93 | 50.31 | 1.12 | -2.8% | 3.7% | 4.67% |
| CHL | 50.54 | 44.39 | 0.80 | -10.6% | -2.7% | 4.62% |
| DTEGY | 17.66 | 15.44 | 0.68 | -8.8% | -0.9% | 4.96% |
| DSU | 11.70 | 11.18 | 0.41 | -0.9% | -1.1% | 5.49% |
| HIO | 5.07 | 4.82 | 0.17 | -1.5% | 0.8% | 5.72% |
| MUB | 110.74 | 109.04 | 1.26 | -0.4% | 0.2% | 2.29% |
| PRHYX | 6.76 | 6.50 | 0.15 | -1.6% | -0.6% | 5.40% |
| NEA | 13.75 | 13.01 | 0.36 | -2.8% | 0.4% | 5.37% |
| JNK | 36.72 | 35.48 | 0.99 | -0.7% | -0.6% | 5.50% |
| VWITX | 14.13 | 13.89 | 0.19 | -0.4% | 0.2% | 2.80% |
| PHMIX | 9.09 | 9.08 | 0.19 | 2.0% | 0.4% | 2.80% |
| UTG | 30.94 | 28.91 | 0.96 | -3.5% | 2.5% | 4.20% |
| XLU | 52.65 | 51.96 | 0.84 | 0.3% | 2.9% | 3.38% |
| DUK | 84.11 | 79.08 | 1.78 | -3.9% | 4.3% | 4.49% |
| EIX | 63.24 | 63.27 | 1.09 | 1.8% | 0.5% | 3.64% |
| PFF | 38.07 | 37.71 | 1.08 | 1.9% | 1.5% | 5.54% |
| JPC | 10.34 | 9.33 | 0.39 | -6.0% | -4.4% | 6.21% |
| WFC-PL | 1,309.99 | 1,259.00 | 37.50 | -1.0% | -0.7% | 5.80% |
| TIP | 114.08 | 112.87 | 1.26 | 0.0% | 0.8% | 2.72% |
| SHY | 83.85 | 83.37 | 0.47 | 0.0% | 0.0% | 1.24% |
| TLT | 126.86 | 121.72 | 1.53 | -2.8% | 1.8% | 2.56% |
| Totals | - | - | - | -2.2% | 0.4% | 4.68% |
Thanks for reading. Interested in thoughts.
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