Another month/year has flown by. And so it is time to look at another monthly tracking portfolio as we hit the end of March 2019.
It is not without thinking that I have picked a picture of diving this month. The drop was sharp in the past 30 days, as I have alluded several times.
As my faithful readers know, I have been tracking the Magic Formula Stocks as described by Joel Greenblatt in The Little Book That Beats the Stock Market since January 2006. Every month I take the top 50 stocks over $100m market cap from his website and track how that portfolio of stocks fares versus the Russell 3000 for the next 12 months. It has been an uphill struggle as the tracking portfolios have under-performed, driven in part by Chinese reverse merger fiascos, for-profit education stocks and home health care stocks all being proverbial albatrosses.
People ask, does MFI not work anymore? I am not sure. Perhaps 12 years isn't long enough. Perhaps it works better at a higher market cap cut off (I believe this to be true). I think too many stocks make the screen over the years by "mistake"... that is they are not true value/cheap stocks. In 2011, we had a bunch of Chinese Reverse Merger stocks that hurt that year and were out and out frauds. Then we have also had a number of stocks that have a one time spike in earnings that fools the formula. Frankly, it might do better if instead of a trailing 12 month income look, it used a trailing 24 month look on income, to filter out the one time spikes.
Onward
Fearless readers will recall we had a 29 month "losing streak".. Then we had a 13 month winning streak. Now we have our third straight loss , "losing" -3.0% to 8.5% this month.
Guess what? Last month 3 open portfolios were leading. Now all open portfolios are trailing, by an average of almost 10 points. That is really bad. Like bad enough it makes you want to throw in the towel or make major changes in market cap. But I don't know, I did start a $3b+ tracking portfolio on March 1st and it was down 2.8%
Here are the 50 stocks in descending performance order (from the portfolio that just hit a year):
| Stock | Initial Price | End Price | Percent Change | Mkt Cap |
| LEE | 1.95 | 3.30 | 69.2% | 111 |
| NTRI | 26.40 | 42.90 | 62.5% | 810 |
| SYNT | 25.53 | 41.00 | 60.6% | 2,118 |
| ESRX | 69.08 | 95.80 | 38.7% | 38,989 |
| CERC | 4.29 | 5.84 | 36.1% | 112 |
| BPT | 19.91 | 26.60 | 33.6% | 511 |
| EGOV | 13.03 | 17.09 | 31.2% | 881 |
| MSB | 23.06 | 29.29 | 27.0% | 338 |
| TGNA | 11.13 | 14.10 | 26.7% | 2,451 |
| DISCA | 21.43 | 27.02 | 26.1% | 12,172 |
| AGX | 41.63 | 49.95 | 20.0% | 668 |
| AMGN | 165.59 | 189.98 | 14.7% | 123,871 |
| CSVI | 44.26 | 50.75 | 14.7% | 626 |
| JNPR | 23.70 | 26.47 | 11.7% | 8,893 |
| AMCX | 51.70 | 56.76 | 9.8% | 3,158 |
| CJREF | 4.04 | 4.43 | 9.7% | 965 |
| UIS | 10.75 | 11.67 | 8.6% | 543 |
| CELG | 89.21 | 94.34 | 5.8% | 67,737 |
| UTHR | 112.36 | 117.37 | 4.5% | 5,142 |
| SYX | 21.68 | 22.64 | 4.4% | 1,059 |
| OMC | 70.27 | 72.99 | 3.9% | 16,721 |
| RPXC | 10.69 | 10.48 | -2.0% | 531 |
| HRB | 24.43 | 23.94 | -2.0% | 5,314 |
| MSGN | 22.60 | 21.75 | -3.8% | 1,701 |
| SP | 35.60 | 34.12 | -4.2% | 792 |
| EGRX | 52.69 | 50.49 | -4.2% | 841 |
| IPG | 22.19 | 21.01 | -5.3% | 8,825 |
| ABC | 84.68 | 79.52 | -6.1% | 18,837 |
| VIAB | 30.21 | 28.07 | -7.1% | 12,502 |
| IDCC | 72.26 | 65.98 | -8.7% | 2,548 |
| HPQ | 21.33 | 19.43 | -8.9% | 35,576 |
| GILD | 72.89 | 65.01 | -10.8% | 98,535 |
| MPAA | 21.43 | 18.87 | -11.9% | 409 |
| BIIB | 273.82 | 236.38 | -13.7% | 57,886 |
| INVA | 16.67 | 14.03 | -15.8% | 1,699 |
| QTRH | 1.40 | 1.11 | -20.6% | 172 |
| AEIS | 63.90 | 49.68 | -22.3% | 2,531 |
| ASYS | 7.32 | 5.33 | -27.2% | 108 |
| EVC | 4.46 | 3.24 | -27.4% | 423 |
| NHTC | 17.97 | 12.96 | -27.9% | 216 |
| TRNC | 16.42 | 11.79 | -28.2% | 553 |
| VEC | 37.24 | 26.59 | -28.6% | 414 |
| SQBG | 2.09 | 1.28 | -38.8% | 132 |
| DLX | 72.44 | 43.72 | -39.6% | 3,549 |
| MIK | 19.71 | 11.42 | -42.1% | 3,586 |
| TUP | 45.28 | 25.58 | -43.5% | 2,470 |
| ACOR | 23.65 | 13.29 | -43.8% | 1,095 |
| CNCE | 22.90 | 12.07 | -47.3% | 562 |
| NLS | 13.45 | 5.56 | -58.7% | 408 |
| MDCA | 7.20 | 2.25 | -68.7% | 421 |
8 of the 50 (16%) were down 30% or more. 15 of the 50 (30%) were down 20% or more. And this is in a market up 8%. Brutal.
Here are all tracking portfolios back to 2006:
| Date | MFI | R3K | Lead |
| 1/6/2006 | 16.0% | 10.9% | 1 |
| 2/17/2006 | 21.2% | 14.6% | 1 |
| 3/29/2006 | 13.0% | 9.6% | 1 |
| 4/7/2006 | 10.3% | 12.1% | 0 |
| 5/12/2006 | 20.4% | 18.6% | 1 |
| 5/31/2006 | 29.2% | 23.3% | 1 |
| 6/30/2006 | 22.4% | 20.0% | 1 |
| 7/31/2006 | 19.7% | 17.3% | 1 |
| 8/31/2006 | 13.0% | 13.3% | 0 |
| 9/28/2006 | 12.7% | 14.6% | 0 |
| 10/27/2006 | 10.3% | 12.0% | 0 |
| 11/29/2006 | -0.3% | 4.8% | 0 |
| 12/28/2006 | -6.9% | 3.4% | 0 |
| 1/26/2007 | -10.2% | -6.6% | 0 |
| 2/27/2007 | -3.7% | -1.0% | 0 |
| 3/26/2007 | -9.8% | -5.5% | 0 |
| 4/27/2007 | -10.9% | -5.0% | 0 |
| 5/29/2007 | -11.5% | -6.3% | 0 |
| 7/3/2007 | -30.0% | -15.6% | 0 |
| 7/30/2007 | -19.9% | -11.5% | 0 |
| 8/30/2007 | -12.5% | -8.7% | 0 |
| 9/27/2007 | -19.0% | -18.2% | 0 |
| 11/2/2007 | -40.4% | -34.3% | 0 |
| 11/28/2007 | -40.1% | -38.3% | 0 |
| 12/28/2007 | -36.3% | -40.0% | 1 |
| 1/25/2008 | -36.4% | -35.9% | 0 |
| 2/26/2008 | -51.7% | -41.5% | 0 |
| 3/24/2008 | -40.9% | -36.8% | 0 |
| 4/25/2008 | -25.6% | -31.0% | 1 |
| 5/28/2008 | -22.2% | -33.6% | 1 |
| 7/2/2008 | -11.7% | -25.3% | 1 |
| 7/29/2008 | -10.5% | -20.9% | 1 |
| 8/29/2008 | -13.8% | -17.9% | 1 |
| 9/26/2008 | -4.3% | -10.0% | 1 |
| 10/31/2008 | 18.7% | 13.9% | 1 |
| 11/26/2008 | 50.9% | 27.7% | 1 |
| 12/26/2008 | 48.9% | 32.3% | 1 |
| 1/23/2009 | 59.3% | 36.4% | 1 |
| 2/27/2009 | 92.8% | 55.6% | 1 |
| 3/27/2009 | 85.8% | 48.1% | 1 |
| 4/24/2009 | 69.7% | 45.8% | 1 |
| 5/29/2009 | 31.8% | 22.8% | 1 |
| 6/29/2009 | 21.3% | 24.0% | 0 |
| 7/29/2009 | 19.5% | 15.9% | 1 |
| 8/28/2009 | 7.4% | 8.8% | 0 |
| 9/25/2009 | 12.6% | 12.4% | 1 |
| 10/30/2009 | 22.7% | 18.3% | 1 |
| 11/27/2009 | 24.3% | 13.6% | 1 |
| 12/31/2009 | 23.7% | 18.1% | 1 |
| 1/22/2010 | 19.0% | 20.6% | 0 |
| 2/26/2010 | 18.6% | 23.6% | 0 |
| 3/25/2010 | 10.0% | 15.4% | 0 |
| 4/23/2010 | 7.1% | 11.4% | 0 |
| 5/28/2010 | 19.3% | 25.4% | 0 |
| 6/29/2010 | 16.7% | 25.7% | 0 |
| 7/29/2010 | 5.4% | 20.1% | 0 |
| 9/2/2010 | 7.3% | 10.1% | 0 |
| 9/24/2010 | -4.3% | 0.3% | 0 |
| 10/29/2010 | -2.9% | 10.4% | 0 |
| 11/26/2010 | -8.5% | 1.4% | 0 |
| 1/3/2011 | -11.4% | 0.1% | 0 |
| 1/28/2011 | -7.6% | 4.9% | 0 |
| 2/25/2011 | -5.5% | 5.0% | 0 |
| 3/24/2011 | -4.4% | 7.4% | 0 |
| 4/21/2011 | -16.0% | 3.2% | 0 |
| 5/27/2011 | -12.0% | -0.4% | 0 |
| 6/24/2011 | -9.5% | 5.0% | 0 |
| 7/29/2011 | -4.3% | 8.1% | 0 |
| 8/26/2011 | 12.0% | 21.6% | 0 |
| 9/30/2011 | 23.5% | 29.6% | 0 |
| 10/28/2011 | 0.4% | 11.5% | 0 |
| 11/25/2011 | 13.9% | 24.0% | 0 |
| 12/29/2011 | 9.9% | 15.9% | 0 |
| 1/27/2012 | 7.4% | 16.6% | 0 |
| 2/24/2012 | 7.8% | 13.3% | 0 |
| 3/23/2012 | 9.1% | 15.2% | 0 |
| 4/27/2012 | 10.5% | 15.3% | 0 |
| 5/25/2012 | 23.4% | 27.5% | 0 |
| 6/22/2012 | 26.1% | 24.6% | 1 |
| 7/27/2012 | 30.4% | 25.7% | 1 |
| 8/24/2012 | 26.0% | 19.8% | 1 |
| 9/28/2012 | 39.3% | 22.1% | 1 |
| 10/26/2012 | 48.3% | 28.9% | 1 |
| 11/23/2012 | 45.7% | 32.1% | 1 |
| 12/31/2012 | 52.3% | 33.0% | 1 |
| 1/25/2013 | 39.5% | 22.0% | 1 |
| 2/22/2013 | 46.5% | 26.4% | 1 |
| 3/28/2013 | 40.1% | 21.2% | 1 |
| 4/26/2013 | 35.0% | 20.5% | 1 |
| 5/24/2013 | 20.4% | 19.2% | 1 |
| 6/28/2013 | 26.9% | 24.1% | 1 |
| 7/29/2013 | 17.8% | 19.0% | 0 |
| 8/30/2013 | 17.5% | 24.6% | 0 |
| 9/27/2013 | 12.9% | 17.7% | 0 |
| 10/25/2013 | 11.8% | 15.4% | 0 |
| 11/29/2013 | 12.3% | 15.6% | 0 |
| 12/31/2013 | 12.7% | 11.9% | 1 |
| 1/31/2014 | 14.2% | 13.0% | 1 |
| 2/28/2014 | 15.4% | 13.9% | 1 |
| 3/28/2014 | 6.1% | 12.3% | 0 |
| 4/25/2014 | 8.6% | 15.8% | 0 |
| 5/30/2014 | 5.9% | 11.7% | 0 |
| 6/27/2014 | 2.5% | 9.2% | 0 |
| 7/25/2014 | 3.3% | 8.7% | 0 |
| 8/29/2014 | -2.2% | 1.0% | 0 |
| 9/26/2014 | -0.6% | -0.9% | 1 |
| 10/31/2014 | 4.3% | 4.4% | 0 |
| 11/28/2014 | -2.9% | 2.9% | 0 |
| 12/31/2014 | -9.3% | 0.3% | 0 |
| 1/30/2015 | -12.4% | -2.8% | 0 |
| 2/27/2015 | -19.0% | -7.3% | 0 |
| 3/27/2015 | -17.1% | -1.9% | 0 |
| 4/24/2015 | -15.4% | -0.8% | 0 |
| 5/29/2015 | -14.1% | 0.1% | 0 |
| 6/26/2015 | -8.7% | 0.4% | 0 |
| 7/30/2015 | 3.96% | 4.02% | 0 |
| 8/28/2015 | 5.6% | 10.2% | 0 |
| 9/25/2015 | 6.5% | 13.8% | 0 |
| 10/30/2015 | 2.0% | 4.0% | 0 |
| 11/27/2015 | 8.9% | 8.4% | 1 |
| 12/31/2015 | 13.7% | 12.6% | 1 |
| 1/29/2016 | 22.6% | 22.4% | 1 |
| 2/26/2016 | 27.8% | 25.4% | 1 |
| 3/24/2016 | 26.5% | 19.6% | 1 |
| 4/22/2016 | 13.7% | 14.8% | 0 |
| 5/27/2016 | 14.3% | 15.6% | 0 |
| 6/30/2016 | 23.2% | 16.1% | 1 |
| 7/29/2016 | 17.1% | 16.0% | 1 |
| 8/26/2016 | 10.6% | 14.6% | 0 |
| 9/30/2016 | 18.6% | 18.5% | 1 |
| 10/28/2016 | 18.3% | 24.1% | 0 |
| 11/25/2016 | 7.4% | 19.2% | 0 |
| 12/30/2016 | 4.7% | 20.5% | 0 |
| 1/27/2017 | 10.5% | 27.2% | 0 |
| 2/24/2017 | 7.6% | 17.4% | 0 |
| 3/31/2017 | 6.4% | 13.6% | 0 |
| 4/28/2017 | 5.8% | 13.8% | 0 |
| 5/26/2017 | 11.1% | 15.1% | 0 |
| 6/29/2017 | 11.1% | 14.7% | 0 |
| 7/28/2017 | 12.5% | 16.1% | 0 |
| 8/25/2017 | 28.8% | 21.5% | 1 |
| 9/29/2017 | 20.0% | 17.3% | 1 |
| 10/27/2017 | 11.8% | 4.0% | 1 |
| 11/24/2017 | 9.8% | 7.0% | 1 |
| 12/29/2017 | -3.4% | -5.4% | 1 |
| 1/26/2018 | -7.5% | -5.6% | 0 |
| 2/23/2018 | 0.4% | 3.7% | 0 |
| 3/29/2018 | -3.0% | 8.5% | 0 |
| 4/27/2018 | -6.7% | 7.3% | 0 |
| 5/25/2018 | -8.7% | 4.8% | 0 |
| 6/29/2018 | -8.4% | 4.5% | 0 |
| 7/27/2018 | -7.6% | 1.1% | 0 |
| 8/31/2018 | -11.3% | -2.2% | 0 |
| 9/28/2018 | -11.5% | -2.4% | 0 |
| 10/26/2018 | -1.7% | 7.6% | 0 |
| 11/30/2018 | -3.9% | 3.5% | 0 |
| 12/31/2018 | 7.9% | 13.9% | 0 |
| 1/25/2019 | -3.1% | 6.6% | 0 |
| 2/26/2019 | -8.5% | 1.2% | 0 |
Note of the 11 open ones (the final 11), 12/31/18 is the only one in the black. And I wonder why my MFI portfolios (real money) have been struggling.
Picking stocks with a 2.6% dividend or higher does help, for March 2018 it changed the -3.0% above to +4.3%. That still seems to be the path to go, although admittedly some high dividend names (TUP, GME and PBI) have been crushed as well.
I am just going to end there.
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