Monthly Tracking Portfolio - November 23rd, 2012

November 23rd 2012 Monthly Tracking Portfolio

Another month has zipped by. 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.

 Fearless readers will recall we had a 29 month "losing streak"..  This month-end extended the winning streak to 6! It went up an excellent 45.7 %,stomping the R3K, which was up a less excellent 32.1%!  I will note that this portfolio ran an extra week as I like to start a new one the last Friday of every month. Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
GTAT	3.36	9.81	192.0%	2.61	400
SAVE	16.85	45.87	172.2%	16.47	1,222
CPLA	27.42	65.72	139.7%	26.96	351
ESI	17.00	38.99	129.4%	11.69	397
QCOR	25.72	58.01	125.5%	24.56	1,543
EXPR	12.21	24.61	101.6%	13.70	1,059
WCRX	11.55	22.93	98.5%	10.85	2,993
RPXC	8.80	16.52	87.7%	8.60	459
STX	26.20	49.04	87.2%	25.16	10,533
GME	26.16	48.25	84.4%	22.30	3,273
DLX	28.76	49.69	72.8%	28.62	1,500
UIS	16.36	27.47	67.9%	15.68	718
JCOM	28.61	47.97	67.7%	29.70	1,317
USNA	43.98	73.11	66.2%	30.51	638
SAI	10.55	17.42	65.1%	N/A	3,974
RTN	54.35	88.68	63.2%	52.24	18,546
AFAM	17.42	27.90	60.2%	17.66	179
HSII	11.40	18.24	60.0%	12.20	212
CA	21.34	33.00	54.6%	21.67	10,122
DELL	9.31	13.86	48.9%	8.69	16,560
PETS	10.61	15.78	48.7%	10.69	222
VG	2.24	3.31	47.8%	2.25	499
LPS	24.11	35.11	45.6%	21.23	2,078
POZN	5.43	7.90	45.5%	4.26	164
MSFT	26.89	38.13	41.8%	26.26	233,289
NATR	13.55	19.19	41.6%	12.91	238
USMO	10.53	14.69	39.5%	10.94	241
APOL	18.86	26.29	39.4%	15.98	2,117
PDLI	7.03	9.77	39.0%	6.50	1,441
AGX	17.39	23.45	34.8%	13.90	248
BAH	13.08	17.49	33.7%	12.51	1,918
NTI	19.17	25.40	32.5%	17.83	403
TZOO	17.28	21.48	24.3%	17.42	274
GNI	60.03	73.68	22.7%	61.50	107
VCI	24.67	29.36	19.0%	23.69	1,006
MANT	24.27	28.77	18.5%	23.20	928
KLIC	10.68	12.62	18.2%	10.08	792
CSCO	18.29	21.25	16.2%	18.95	100,059
HFC	42.66	47.98	12.5%	38.98	9,257
MSB	20.91	22.30	6.6%	17.07	295
DMRC	17.65	18.73	6.1%	17.92	128
CF	207.90	217.38	4.6%	169.33	13,210
BDSI	4.77	4.80	0.6%	3.52	146
INTX	8.05	7.74	-3.9%	7.71	157
TNAV	7.51	7.04	-6.3%	4.91	309
IDCC	39.60	33.89	-14.4%	31.83	1,695
NSU	4.27	3.27	-23.4%	2.65	881
STRA	49.44	37.15	-24.9%	36.50	587
EGY	8.09	6.05	-25.2%	5.03	468
POOSF	5.19	-	-100.0%	-	420

This is the first tracking portfolio in decades (ok maybe not that long) where the For profit Education Stocks were NOT a drag.  The 4 of them were up on average by a whopping 71%. And there were six stocks up 100% or more (including GTAT).  I do think things are continuing to change.  You can see that in the next table!

Here is a listing of every portfolio I have tracked:

Average of Percent Change
Date	Total	IWV
1/6/2006	16.0%	10.9%
2/17/2006	21.2%	14.6%
3/29/2006	13.0%	9.6%
4/7/2006	10.3%	12.1%
5/12/2006	20.4%	18.6%
5/31/2006	29.2%	23.3%
6/30/2006	22.4%	20.0%
7/31/2006	19.7%	17.3%
8/31/2006	13.0%	13.3%
9/28/2006	12.7%	14.6%
10/27/2006	10.3%	12.0%
11/29/2006	-0.3%	4.8%
12/28/2006	-6.9%	3.4%
1/26/2007	-10.2%	-6.6%
2/27/2007	-3.7%	-1.0%
3/26/2007	-9.8%	-5.5%
4/27/2007	-10.9%	-5.0%
5/29/2007	-11.5%	-6.3%
7/3/2007	-30.0%	-15.6%
7/30/2007	-19.9%	-11.5%
8/30/2007	-12.5%	-8.7%
9/27/2007	-19.0%	-18.2%
11/2/2007	-40.4%	-34.3%
11/28/2007	-40.1%	-38.3%
12/28/2007	-36.3%	-40.0%
1/25/2008	-36.4%	-35.9%
2/26/2008	-51.7%	-41.5%
3/24/2008	-40.9%	-36.8%
4/25/2008	-25.6%	-31.0%
5/28/2008	-22.2%	-33.6%
7/2/2008	-11.7%	-25.3%
7/29/2008	-10.5%	-20.9%
8/29/2008	-13.8%	-17.9%
9/26/2008	-4.3%	-10.0%
10/31/2008	18.7%	13.9%
11/26/2008	50.9%	27.7%
12/26/2008	48.9%	32.3%
1/23/2009	59.3%	36.4%
2/27/2009	92.8%	55.6%
3/27/2009	85.8%	48.1%
4/24/2009	69.7%	45.8%
5/29/2009	31.8%	22.8%
6/29/2009	21.3%	24.0%
7/29/2009	19.5%	15.9%
8/28/2009	7.4%	8.8%
9/25/2009	12.6%	12.4%
10/30/2009	22.7%	18.3%
11/27/2009	24.3%	13.6%
12/31/2009	23.7%	18.1%
1/22/2010	19.0%	20.6%
2/26/2010	18.6%	23.6%
3/25/2010	10.0%	15.4%
4/23/2010	7.1%	11.4%
5/28/2010	19.3%	25.4%
6/29/2010	16.7%	25.7%
7/29/2010	5.4%	20.1%
9/2/2010	7.3%	10.1%
9/24/2010	-4.3%	0.3%
10/29/2010	-2.9%	10.4%
11/26/2010	-8.5%	1.4%
1/3/2011	-11.4%	0.1%
1/28/2011	-7.6%	4.9%
2/25/2011	-5.5%	5.0%
3/24/2011	-4.4%	7.4%
4/21/2011	-16.0%	3.2%
5/27/2011	-12.0%	-0.4%
6/24/2011	-9.5%	5.0%
7/29/2011	-4.3%	8.1%
8/26/2011	12.0%	21.6%
9/30/2011	23.5%	29.6%
10/28/2011	0.4%	11.5%
11/25/2011	13.9%	24.0%
12/29/2011	9.9%	15.9%
1/27/2012	7.4%	16.6%
2/24/2012	7.8%	13.3%
3/23/2012	9.1%	15.2%
4/27/2012	10.5%	15.3%
5/25/2012	26.5%	27.5%
6/22/2012	26.1%	24.6%
7/27/2012	30.4%	25.7%
8/24/2012	26.0%	19.8%
9/28/2012	39.3%	22.1%
10/26/2012	48.3%	28.9%
11/23/2012	45.7%	32.1%
12/31/2012	48.9%	29.4%
1/25/2013	41.4%	22.5%
2/22/2013	40.3%	21.3%
3/28/2013	38.0%	16.7%
4/26/2013	28.8%	16.0%
5/24/2013	21.3%	11.2%
6/28/2013	20.5%	13.2%
7/29/2013	13.0%	8.0%
8/30/2013	12.2%	11.0%
9/27/2013	8.6%	6.5%
10/25/2013	3.7%	2.3%

As noted, this is the sixth straight portfolio to win after 29 straight losses! (that is hard to do... it ain't random).  However ALL 11 open portfolios are leading the Russell 3000 (by an average of more than 11 points.

Subsets

I also keep 2 subsets of the larger portfolios:  (1) dividend stocks (those with a yield per Yahoo of at least 2.6%) and (2) new stocks (those new to the tracking portfolios in past 12 months.  The dividend portfolio was most excellent, up about 37.5%.  The new portfolio was solid okay, up 35.9%.  Finally, I like to track cash as it is more "honest" than percentages as if you go up by 25% and then down by 25%, that is a different result than up by 5% then down by 5%.  So I track what you would have to day if you had spread $100,000 over the first twelve portfolios evenly.

Category	Value
Total	167,823
Total New	170,030
Total Dividend	381,965
Total Russell 3K	164,019

I am sure my eagle eyed readers have noted that the "Total" is now beating the Russell 3000 total.  It has been a long and arduous road, but MFI (by my measure) is officially  beating the benchmark!