It was a bad month. It was a bad quarter. It was a bad year. Pretty depressing, but I have at least seen it before - having been investing in the dot.com crash and the global financial crisis crash. I really don't mind my stocks going down, as Greenblatt tells us, "the market just sometimes goes nuts". But I do mind underperforming the markets by a substantial amount. And that was the case this month/quarter/year.
MFI portfolios have kind of hung in there. It has really been my energy and shipping portfolios, which frankly were two of the worst places to be these past 3 months with oil crashing and trade war jitters hurting shipping. I think it is overblown and am not selling anything. But if we get any material rallies, I will likely right size some of energy and shipping positions.
The Past Month
This past month/quarter/year were so bad, I frankly can't type this blog fast enough. It is making me queasy! It was a tough market, but I frankly exacerbated things by doing some really foolhardy things. Just like golf, I hit the ball best when I actually consciously try to swing easy instead of hard. In investing, I racked up my biggest losses trying to hit the equivalent of 300 yard drives. I just need to focus on fundamentals, keep the ball in the fairway... keep the investments steadily gaining.
Here is my standard table showing how all my portfolios fared as well as my benchmarks. I understand if you decide to avert your eyes.
| Component | YTD | 2nd Half | Month Change |
| Overall | -20.3% | -23.8% | -11.9% |
| MFI Select | -15.7% | -10.3% | -9.6% |
| MFI Formula | +0.3% | -5.9% | -9.5% |
| MFI Combined | -8.0% | -8.2% | -9.6% |
| Non MFI | -26.9% | -26.1% | -13.1% |
| Dividend Index | -4.6% | -2.4% | -4.8% |
| R3K Index | -5.3% | -8.3% | -9.4% |
| Blended Index | -5.1% | -6.2% | -7.8% |
| MFI Index | -0.2% | -13.0% | -11.6% |
| GARIX | -5.3% | -3.9% | -5.0% |
Just a few comments. First the benchmarks. I kind of bashed the Dividend index all year as I felt in a rising rate environment that bond like investments would struggle. not in December as you can see they enjoyed a "flight to safety".
The MFI Index, a group of 50 stocks from official screen that I reconstitute once a year, really faltered the final month - down 11.6%. Brutal, but they had plenty of company. It sadly ended the year (due to final slide) slightly in the red.
The Russell 3000 was off 9.4% for the month and -5.3% for the year. Not good, but I would have been happy to have done that... did I mention I HATE underperforming market, especially substantially?
GARIX, a Greenblatt mutual fund seemed to have benefited a bit in December from having some short positions to offset long positions. It ended year down 5.3% (perhaps slightly better than that as I am typing before final price on 12/31).
Now my stuff.
My two MFI portfolios were kind of good cop/bad cop. My MFI Select, which had been stellar from 2012 through 2017, sucked in 2018. Down 15.7%. My MFI Formula was actually relatively respectable. It is the only green number on YTD board, up 0.3%.
Finally, as mentioned, my non MFI - driven by being overweight shipping and energy, was down 26.9%, all from 2nd half of year. The oil crash really hurt me and I kick myself for not being more proactive. I saw there were issues in November, but convinced myself (via a big dose of confirmation bias) that the crash more "trader" driven than fundamentals driven.
Some Tables
Ok, now that that mea culpa is done, let us look at a few tables. First, here are the 40 securities from the Dividend Index:
| Ticker | 12/30/2017 | Current | Dividend | YTD Change | Monthly Change | Yield |
| AMLP | 10.79 | 8.74 | 0.82 | -11.4% | -8.5% | 9.31% |
| NML | 9.38 | 6.67 | 0.61 | -22.4% | -11.4% | 9.90% |
| EPD | 26.51 | 24.58 | 1.68 | -0.9% | -6.4% | 7.00% |
| ET | 14.00 | 13.22 | 2.26 | 10.6% | -9.3% | 9.25% |
| FDD | 13.73 | 11.95 | 0.44 | -9.8% | -5.0% | 4.34% |
| VGK | 59.15 | 48.62 | 1.13 | -15.9% | -5.5% | 4.41% |
| DDAIF | 84.57 | 52.67 | 3.25 | -33.9% | -6.7% | 8.56% |
| NVS | 83.96 | 85.81 | 2.75 | 5.5% | -6.2% | 3.49% |
| NOBL | 64.04 | 60.54 | 1.00 | -3.9% | -8.6% | 2.39% |
| VYM | 85.63 | 77.94 | 1.86 | -6.8% | -9.6% | 3.27% |
| MRK | 56.27 | 76.47 | 1.44 | 38.5% | -3.6% | 2.60% |
| PEP | 119.92 | 110.48 | 3.22 | -5.2% | -9.4% | 3.25% |
| VNQ | 82.98 | 74.58 | 2.93 | -6.6% | -9.0% | 5.22% |
| RQI | 12.65 | 10.35 | 0.88 | -11.3% | -12.7% | 9.36% |
| TCO | 65.43 | 45.51 | 1.88 | -27.6% | -14.0% | 5.82% |
| SLG | 100.93 | 79.08 | 2.33 | -19.3% | -18.0% | 4.13% |
| T | 38.88 | 28.54 | 1.96 | -21.6% | -8.6% | 7.09% |
| VZ | 52.93 | 56.22 | 2.24 | 10.4% | -6.8% | 4.25% |
| CHL | 50.54 | 47.99 | 1.60 | -1.9% | -3.5% | 4.52% |
| DTEGY | 17.66 | 16.98 | 0.68 | 0.0% | -3.1% | 4.52% |
| DSU | 11.70 | 9.79 | 0.76 | -9.9% | -5.7% | 8.33% |
| HIO | 5.07 | 4.38 | 0.32 | -7.3% | -3.3% | 7.26% |
| MUB | 110.74 | 109.02 | 2.52 | 0.7% | 0.9% | 2.42% |
| PRHYX | 6.76 | 6.15 | 0.33 | -4.1% | -2.5% | 5.40% |
| NEA | 13.75 | 12.32 | 0.66 | -5.6% | -0.9% | 5.38% |
| JNK | 36.72 | 33.60 | 1.98 | -3.1% | -3.3% | 5.89% |
| VWITX | 14.13 | 13.91 | 0.37 | 1.1% | 0.9% | 2.80% |
| PHMIX | 9.09 | 8.90 | 0.38 | 2.1% | 0.3% | 2.80% |
| UTG | 30.94 | 29.41 | 1.76 | 0.7% | -6.2% | 4.20% |
| XLU | 52.65 | 52.91 | 1.26 | 2.9% | -4.8% | 3.33% |
| DUK | 84.11 | 86.26 | 3.56 | 6.8% | -2.6% | 4.22% |
| EIX | 63.24 | 56.72 | 1.63 | -7.7% | 2.5% | 4.31% |
| PFF | 38.07 | 34.23 | 2.16 | -4.4% | -2.7% | 6.33% |
| JPC | 10.34 | 8.35 | 0.72 | -12.4% | -7.1% | 8.97% |
| WFC-PL | 1,309.99 | 1,261.90 | 56.25 | 0.6% | -0.1% | 5.80% |
| TIP | 114.08 | 109.51 | 2.52 | -1.8% | 0.2% | 2.85% |
| SHY | 83.85 | 83.62 | 0.95 | 0.9% | 0.4% | 1.72% |
| TLT | 126.86 | 121.51 | 3.06 | -1.8% | 5.4% | 2.63% |
| Totals | - | - | - | -4.6% | -5.1% | 5.19% |
Looking at the Monthly change column pretty much tells the story of December. I suspect if you looked hard, you'd find that the names with the most debt struggled the most. RQI, TCO, VNQ and SLG are all in the realty REIT arena and are helped a lot by low interest rates.
EPD, NML, ET and AMLP are all in the MLP space... aka "Most Likely to Puke". Again, generally heavily reliant on debt.
XLU, DUK and EIX are utilities and they seemed to hold ok as well as preferred stocks PFF and WFC-PL. I will note my preferred stocks (TOO-PE and GLOP-PB) were crushed this quarter... unfairly in my view, we'll find out if my view is right or wrong and I actually added DLNG-PB yesterday at 17.36 and yielding 12.7%.
Finally, as you might expect, the safest harbor was things directly related to US Treasury: TIP, SHY and TLT.
Now for a listing of the 50 stocks comprising my MFI Index.
| Stock | Start | Current | YTD Change | Last Month |
| AMAG | 13.25 | 15.19 | 14.6% | -15.8% |
| AMCX | 54.08 | 54.88 | 1.5% | -8.3% |
| ABC | 91.82 | 75.92 | -17.3% | -15.7% |
| AMGN | 173.90 | 199.95 | 15.0% | -5.2% |
| AGX | 45.00 | 38.84 | -13.7% | -12.2% |
| BIVV | 53.92 | 105.00 | 94.7% | 0.0% |
| HRB | 26.22 | 26.36 | 0.5% | -5.0% |
| BPT | 20.10 | 27.00 | 34.3% | -7.5% |
| ABCD | 5.68 | 14.48 | 154.9% | 0.0% |
| CPLA | 77.40 | 104.86 | 35.5% | 0.0% |
| CASA | 17.76 | 13.13 | -26.1% | -15.6% |
| CSCO | 38.30 | 44.61 | 16.5% | -9.2% |
| CNCE | 25.87 | 12.55 | -51.5% | -12.4% |
| CJREF | 9.21 | 4.17 | -54.7% | -3.9% |
| DLX | 76.84 | 39.64 | -48.4% | -22.7% |
| DIN | 50.73 | 69.86 | 37.7% | -23.3% |
| DISCA | 22.38 | 24.74 | 10.5% | -19.5% |
| EGRX | 53.42 | 40.29 | -24.6% | -20.1% |
| EVC | 7.15 | 3.11 | -56.5% | -8.0% |
| ESRX | 74.64 | 92.33 | 23.7% | -9.0% |
| GME | 17.95 | 14.10 | -21.4% | -4.5% |
| GILD | 71.64 | 64.83 | -9.5% | -12.0% |
| HSII | 24.55 | 31.71 | 29.2% | -14.4% |
| HPQ | 21.01 | 20.99 | -0.1% | -10.3% |
| INVA | 14.19 | 17.45 | 23.0% | -4.4% |
| IDCC | 76.15 | 67.83 | -10.9% | -11.5% |
| IPG | 20.16 | 21.47 | 6.5% | -11.0% |
| KLAC | 105.07 | 92.33 | -12.1% | -8.3% |
| LEE | 2.35 | 2.11 | -10.2% | -5.8% |
| MCFT | 22.22 | 18.70 | -15.8% | -27.8% |
| MPAA | 24.99 | 16.64 | -33.4% | -7.3% |
| MSGN | 20.25 | 23.56 | 16.3% | 0.0% |
| NHTC | 15.19 | 19.01 | 25.1% | -12.7% |
| NLS | 13.35 | 10.90 | -18.4% | -15.6% |
| EGOV | 16.60 | 12.80 | -22.9% | -3.3% |
| OMC | 72.83 | 75.64 | 3.9% | -4.0% |
| PTN | 0.86 | 0.71 | -17.5% | -12.5% |
| PDLI | 2.74 | 2.90 | 5.8% | -5.5% |
| PCOA | 575.00 | 690.00 | 20.0% | 0.0% |
| PBI | 11.18 | 6.66 | -40.4% | -26.0% |
| SRNE | 3.80 | 2.40 | -36.8% | -30.6% |
| SP | 37.10 | 29.54 | -20.4% | -2.5% |
| SYNT | 22.99 | 41.00 | 78.3% | 0.0% |
| TGNA | 14.08 | 11.15 | -20.8% | -17.4% |
| MEET | 2.82 | 4.63 | 64.2% | 14.9% |
| TVTY | 36.55 | 24.81 | -32.1% | -39.4% |
| TPCO | 17.59 | 11.34 | -35.5% | -22.3% |
| UTHR | 147.95 | 108.90 | -26.4% | -7.8% |
| VEC | 30.85 | 21.58 | -30.0% | -10.9% |
| VIAB | 30.81 | 26.50 | -14.0% | -15.8% |
| Total | 21,371 | -0.2% |
10 of the 50 names were down 30% or more. That is a bit higher than historical "stinker" rate (around 14%). We did have some nice wins as BIVV, ABCD, SYNT, PCOA and ESRX were all sold.
MFI Select
I have two real $ MFI portfolios. The first (and oldest) is MFI Select. It was started in August 2012 and consists of four tranches, with each tranche consisting of 5 stocks. Each tranche is bought and held for a year. It is pretty free form, so I allow myself to pick whatever value stocks I want. They can be from official screen or my own screen I run monthly... which tends to have more choices.
As you can see from the table at start of this blog, it was terrible in 2018. down 15.7%. Here are the current 4 tranches:
| 2/1/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AGX | $43.55 | $37.84 | $0.75 | -11.4% | -9.9% |
| CASA | $18.81 | $13.13 | $0.00 | -30.2% | -9.9% |
| KLAC | $109.80 | $89.49 | $2.84 | -15.9% | -9.9% |
| THO | $136.33 | $52.00 | $1.52 | -60.7% | -9.9% |
| WDC | $87.74 | $36.97 | $2.00 | -55.6% | -9.9% |
| Totals | -34.8% | -9.9% | |||
| 5/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CAAP | $12.19 | $6.63 | $0.00 | -45.6% | -4.3% |
| TGNA | $10.51 | $10.87 | $0.21 | 5.5% | -4.3% |
| DISCA | $23.85 | $24.74 | $0.00 | 3.7% | -4.3% |
| FTSI | $19.39 | $7.11 | $0.00 | -63.3% | -4.3% |
| ICHR | $21.96 | $16.30 | $0.00 | -25.8% | -4.3% |
| Totals | -25.1% | -4.3% | |||
| 8/15/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AGX | $39.45 | $37.84 | $0.25 | -3.4% | -12.0% |
| AMCX | $60.97 | $54.88 | $0.00 | -10.0% | -12.0% |
| CJREF | $3.08 | $3.50 | $0.06 | 15.7% | -12.0% |
| GME | $15.50 | $12.62 | $0.76 | -13.7% | -12.0% |
| SGH | $31.12 | $29.70 | $0.00 | -4.6% | -12.0% |
| Totals | -3.2% | -12.0% | |||
| 11/15/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AGX | $43.15 | $37.84 | $0.00 | -12.3% | -6.8% |
| DXC | $62.00 | $53.17 | $0.00 | -14.2% | -6.8% |
| MU | $38.49 | $31.73 | $0.00 | -17.6% | -6.8% |
| SGH | $29.67 | $29.70 | $0.00 | 0.1% | -6.8% |
| WDC | $44.92 | $36.97 | $0.50 | -16.6% | -6.8% |
| Totals | -12.1% | -6.8% |
OMG. What a train wreck February and May have been thus far. One of my main goals with all my MFI picks is to avoid "stinkers", stocks dropping 30% or more. I have 5 in my 20 stocks here, I am not sure I have had more than 5 total in all my previous tranches. There is still time for some recoveries, but wow.
WDC going from $87 to $37. That is unbelievable. THO from $136 to $52. And FTSI, when US is increasing oil and gas by leaps and bounds falling from $19 to $7. Yikes. Just 3 of my 20 picks are in the green. Here is a summary table of all tranches:
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | -3.2% | -12.1% | -34.8% | -25.1% | -19.7% |
| Previous Tranche | 27.8% | -0.6% | 74.9% | -3.6% | 44.3% |
| Tranche -2 | -0.1% | 42.6% | 10.7% | 19.1% | 18.1% |
| Tranche -3 | 2.8% | 8.0% | -14.3% | -25.2% | -7.2% |
| Tranche -4 | 11.2% | 69.4% | 8.5% | 18.3% | 26.8% |
| Tranche -5 | 41.4% | 14.2% | 78.3% | 33.0% | 41.7% |
| Tranche -6 | 14.1% | 43.7% | 0.0% | 0.0% | 14.5% |
| MFI Overall Gain | 128.1% | 274.3% | 109.4% | 1.2% | 128.2% |
| Current Balance | 57,021 | 93,574 | 52,353 | 25,298 | 228,246 |
| R3K Current Tranche | -12.0% | -6.8% | -9.9% | -4.3% | -8.3% |
| R3K Overall Gain | 98.5% | 103.4% | 81.9% | 70.1% | 88.5% |
| R3K Balance | 49,627 | 50,851 | 45,466 | 42,536 | 188,479 |
| Annualized IRR | 13.8% | 24.0% | 13.3% | 0.2% | 12.8% |
Several points. In bottom RH corner, you will note my annualized IRR has dropped to 12.8%. It was north of 20% at start of year. My 4 current tranches are down an average of 19.7% (can you spell B-E-A-R?) versus the Russell 3000 down 8.3%. That is pretty crappy.
Sad to say, it is pretty crappy for MFI across the board. I will publish my tracking portfolios data later today, but a sneak peek shows the 12 tracking portfolios down an average of 13.8% and getting beaten by index an average of 5 points. The struggle is real.
You can see my February 2018 tranche of -34.8% is the worst tranche on the board. May 2015 was down 25.2%. To put that in perspective, for my tracking portfolios (50 stocks tracked for a year once a month) - I did have a stretch of 8 straight worse than -30% in the throes of the financial crisis. The very worst being February 2008, down 41.5%. My Feb tranche still has a month to recover, I am hoping for a bit of a January effect. We shall see.
Finally, here is a table that shows how $100,000 spread equally over first 4 tranches starting in August 2012 would have grown:
| 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 |
| 7/1/2018 | 68.20% | 273,125 | 204,921 |
| 10/1/2018 | 65.80% | 284,097 | 218,297 |
| Current | 39.77% | 228,246 | 188,479 |
You can see how stunningly a bad year this was as we shrunk from 291,114 at start of year to 228.246... with virtually all of that drop in Q4. Enough!!!
MFI Formula
My 2nd real money MFI portfolio is MFI Formula. I started this in October of 2014. The basis for it was my observation that larger stocks that pay dividends from the official screen tend to perform better. So I have a formula of the formula. In left side bar, if you click of New MFI Formula Tranche (Dry Run), you can see exactly how I do it.
As I mentioned, this approach actually made money in 2018... so perhaps there is something to the concept.
| 1/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AMGN | $177.11 | $194.67 | $5.28 | 12.9% | -5.8% |
| GME | $18.06 | $12.62 | $1.52 | -21.7% | -5.8% |
| GILD | $71.64 | $62.55 | $1.71 | -10.3% | -5.8% |
| HRB | $26.34 | $25.37 | $0.99 | 0.1% | -5.8% |
| OMC | $72.81 | $73.24 | $1.80 | 3.1% | -5.8% |
| Totals | -3.2% | -5.8% | |||
| 4/3/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AMGN | $166.46 | $194.67 | $3.96 | 19.3% | -2.7% |
| VIAB | $29.20 | $25.70 | $0.60 | -9.9% | -2.7% |
| GILD | $72.71 | $62.55 | $1.14 | -12.4% | -2.7% |
| TUP | $47.32 | $31.57 | $2.04 | -29.0% | -2.7% |
| EGOV | $13.29 | $12.48 | $0.24 | -4.3% | -2.7% |
| Totals | -7.2% | -2.7% | |||
| 7/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CJREF | $3.90 | $3.50 | $0.25 | -3.8% | -7.8% |
| GILD | $70.80 | $62.55 | $0.57 | -10.8% | -7.8% |
| IPG | $22.80 | $20.63 | $0.42 | -7.7% | -7.8% |
| KLAC | $102.03 | $89.49 | $1.50 | -10.8% | -7.8% |
| TUP | $40.09 | $31.57 | $1.36 | -17.9% | -7.8% |
| Totals | -10.2% | -7.8% | |||
| 10/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CJREF | $3.36 | $3.50 | $0.06 | 6.0% | -14.2% |
| GILD | $78.13 | $62.55 | $0.00 | -19.9% | -14.2% |
| IPG | $22.80 | $20.63 | $0.21 | -8.6% | -14.2% |
| PETS | $31.56 | $23.26 | $0.27 | -25.4% | -14.2% |
| VIAB | $32.21 | $25.70 | $0.20 | -19.6% | -14.2% |
| Totals | -13.5% | -14.2% |
So even though it finished in the green in 2018, all four open tranches are in the negatives (note the 4 tranches that closed in 2018, which are part of my composite 2018 making money were up an average of 22.3%).
Unlike the 5 "stinkers I have in open tranches in MFI Select, you'll note I have no stocks down by 30% or more here. Mission accomplished in that sense at least. And 5 of 20 stocks are up.
Here is table summarizing all tranches in aggregate:
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | -13.5% | -3.2% | -7.2% | -10.2% | -8.3% |
| Previous Tranche | 18.5% | 16.5% | 21.3% | 37.3% | 22.3% |
| Tranche -2 | 7.0% | 9.3% | 25.2% | 26.7% | 17.0% |
| Tranche -3 | 5.5% | 11.0% | -0.2% | -12.5% | 1.0% |
| Tranche -4 | 0.5% | 0.0% | 0.0% | 0.0% | 0.1% |
| MFI Overall Gain | 15.7% | 36.8% | 40.5% | 36.8% | 32.4% |
| Current Balance | 289,063 | 341,952 | 351,513 | 341,524 | 1,324,052 |
| R3K Current Tranche | -14.2% | -5.8% | -2.7% | -7.8% | -7.6% |
| R3K Overall Gain | 35.1% | 27.1% | 26.1% | 26.0% | 28.6% |
| R3K Balance | 337,538 | 317,607 | 315,353 | 314,578 | 1,285,075 |
| Annualized IRR | 3.5% | 8.1% | 9.5% | 9.3% | 7.6% |
Annualized IRR down to 7.6% (was 11 to 12% a few months back). My current tranche is down 8.3% versus 7.6% for benchmark, so open tranches trailing benchmark slightly. That is actually pretty impressive compared to MFI in aggregate.
Finally, here is the $100,000 growth over time:
| 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 |
| 7/1/2018 | 2.28% | 141,126 | 138,849 |
| 10/1/2018 | -0.85% | 147,963 | 148,808 |
| Current | 3.90% | 132,405 | 128,506 |
So 2018, in a relative sense, was pretty successful. I went from trailing the benchmark by 3.63 percentage points at start of year to leading by 3.9 points. Woo-hoo (I think)!
Non MFI
For those of you who came for MFI... you can feel free to leave. For those of you who want a primer in how NOT to invest, read on. Greenblatt says in his book that investing on your own without MFI is "like running through a dynamite factory with a lit match. Well, he was certainly right for my non MFI this year.
As noted earlier, this part of my portfolio was down almost 27% in 2018. I did everything wrong. I sold stocks too early, that ended up getting bought (XXII). I sold stocks too slowly that went bankrupt due to fraud (ANW). I was overweight in sectors that got crushed (energy and shipping).
I say this every year, but this time I mean it... -26.8% is an expensive lesson for me. I have set up a game plan to de-risk and shrink this portfolio in 2019. I will probably keep half of the proceeds in cash and other half funnel into MFI.
I am not going to list my open positions and their results as it is just too humiliating right now. But I will list where I am skating to.
Basket of Shipping Preferred Stocks
I have accumulated a basket of shipping preferred stocks, some of which have floating interest rate features.
DLNG-PB and
Right now they are yielding a composite 10.5%. Clearly there is risk when you stretch for yield. But shipping (and even preferreds) are beaten down pretty far. If a trade deal emerges and oil prices move back above $60, we should get a strong rebound.
Non Shipping Non Energy Names
My other holdings include
OIBAX
T
CTL
LADR
NRZ
KCLI
TGONF
NTR and
O.
All pay dividends and are intended to help keep the lights on in retirement.
Shipping/Energy
While I have admittedly gone overweight here, this is not the time to sell in my opinion. Many have dividends and have some decent upside potential. My core positions (which I may pare back on rallies) include
ECA
OXY
AR on the energy side and
TGP
TK
NMM
GLNG and
CPLP on the shipping side.
I think that is a wrap. Have a great 2019 and thanks for reading!
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1 comment:
For starting period 2018/01, S&P plunged 6.24%. The Magic Formula Mega stocks did better with a loss of 1.92% (AMGN and CSCO +12&13%, MO -31%). Dividend stocks with yield over 5% crashed 20% (PBI, GME, CJREF very big losers, BPT +7%, only DIN +33%).
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