Another week zips by. You have found your way to the MFI Diary. This is my blog where I discuss many things related to "The Little Book That Beats the Market" by Joel Greenblatt. I have been writing this blog since early 2006 and have tracked my performance with real money and tracking portfolios based on the official Magic Formula Investing (MFI) website. I also have created an MFI Index, which is fifty MFI stocks and is reconstituted once a year.
I should mention that I am just a guy with a spreadsheet. Not a CFA, not an expert... just a guy. So please use what I write for information, but do your own diligence in making stock decisions.
So welcome!
The Past Week
It was a week where things felt they were getting a bit unsettled, but then they were not. Here are
- Job Growth Loses Steam as US Adds 98000 in March
- 22 members of single family killed in Syria chemical attack
- The Fed isn't sure if Trump can deliver on his economic promises
- United States launches 50 cruise missiles at Syria targets: US official
- What the Trump-Xi Meeting Will Mean for Markets
- Senate confirms Gorsuch after invoking 'nuclear option'
- Trump removes Steve Bannon from National Security Council
What did all of this mean to the markets? Russell 3000 was basically flat, down 4 basis points.
Here are how my portfolios stand year to date:
| Component | YTD |
| Overall | +3.35% |
| Select | +5.14% |
| Formula | +1.83% |
| Miscellaneous | +1.74% |
| Dividend | +3.82% |
| R3K | +5.25% |
| MFI Index | -1.84% |
So a bit of a rough week for me. I was up about 4.1% last week. Miscelleous has really taken a hit. REcall it was up over 10% just a few weeks ago. I mentioned several times that it is a higher risk portfolio, with BAC warrants, some leveraged gold and some bio tech. It is depressing how poorly the MFI index is doing. I assume that is why many of you are here - down 1.8% for the year. P-U. Nine of the fifty stocks are down by 20% or more, just a quarter+ into the year.
At least my MFI tranches (real money) are hanging in there as I have avoided some of the MFI traps out there.
Quote of the week: "Life's greatest satisfactions include getting the last laugh, having the last word, and paying the last installment."
MFI Select
I have two groups of MFI stocks with real money. The first (and oldest) is MFI Select. This is 4 baskets of 5 stocks that I buy and hold for a year. I have been doing this since my reboot in August 2012.
This approach has done very well for me. Note I am trying to avoid stocks that are on the screen, but in my view are not a true Jake's Bubble Gum Shop (ie a one hit wonder). To be fair, I have also had several stocks that did very well..
Here is my month by month performance, assuming I put in $100,000 spread over the 4 baskets evenly:
| Date | Differential | MFI Value | R3K Value |
| 12/1/2012 | -2.20% | 99,765 | 101,965 |
| 1/1/2013 | -1.78% | 102,798 | 104,575 |
| 2/1/2013 | -2.26% | 102,594 | 104,856 |
| 3/1/2013 | -2.23% | 102,881 | 105,114 |
| 4/1/2013 | -0.43% | 106,804 | 107,234 |
| 5/1/2013 | 2.00% | 110,423 | 108,423 |
| 6/1/2013 | 4.75% | 115,831 | 111,085 |
| 7/1/2013 | 4.29% | 114,888 | 110,597 |
| 8/1/2013 | 6.91% | 124,799 | 117,889 |
| 9/1/2013 | 10.46% | 124,536 | 114,079 |
| 10/1/2013 | 19.67% | 138,655 | 118,990 |
| 11/1/2013 | 19.75% | 143,514 | 123,764 |
| 12/1/2013 | 23.70% | 150,105 | 126,405 |
| 1/1/2014 | 26.63% | 157,138 | 130,503 |
| 2/1/2014 | 24.70% | 150,619 | 125,918 |
| 3/1/2014 | 25.66% | 158,116 | 132,458 |
| 4/1/2014 | 30.38% | 162,991 | 132,616 |
| 5/1/2014 | 29.65% | 162,428 | 132,779 |
| 6/1/2014 | 31.44% | 167,001 | 135,559 |
| 7/1/2014 | 39.23% | 177,971 | 138,740 |
| 8/1/2014 | 31.13% | 167,054 | 135,922 |
| 9/1/2014 | 35.90% | 177,792 | 141,892 |
| 10/1/2014 | 29.38% | 168,321 | 138,944 |
| 11/1/2014 | 26.14% | 168,810 | 142,666 |
| 12/1/2014 | 30.22% | 176,420 | 146,198 |
| 1/1/2015 | 28.17% | 174,306 | 146,140 |
| 2/1/2015 | 20.63% | 162,833 | 142,201 |
| 3/1/2015 | 25.15% | 175,476 | 150,324 |
| 4/1/2015 | 29.95% | 178,565 | 148,612 |
| 5/1/2015 | 37.31% | 186,655 | 149,348 |
| 6/1/2015 | 51.53% | 202,897 | 151,371 |
| 7/1/2015 | 62.69% | 211,437 | 148,743 |
| 8/1/2015 | 40.75% | 192,117 | 151,369 |
| 9/1/2015 | 36.41% | 178,603 | 142,195 |
| 10/1/2015 | 43.12% | 181,175 | 138,052 |
| 11/1/2015 | 69.02% | 217,959 | 148,936 |
| 12/1/2015 | 73.49% | 223,435 | 149,946 |
| 1/1/2016 | 63.33% | 209,514 | 146,186 |
| 2/1/2016 | 49.49% | 187,428 | 137,934 |
| 3/1/2016 | 56.48% | 194,415 | 137,934 |
| 4/1/2016 | 47.34% | 195,770 | 148,430 |
| 5/1/2016 | 46.38% | 194,301 | 147,923 |
| 6/1/2016 | 51.44% | 201,999 | 150,558 |
| 7/1/2016 | 50.41% | 201,092 | 150,680 |
| 8/1/2016 | 52.72% | 207,223 | 154,501 |
| 9/1/2016 | 67.04% | 222,481 | 155,446 |
| 10/1/2016 | 42.98% | 198,563 | 155,582 |
| 11/1/2016 | 41.86% | 195,726 | 153,863 |
| 12/1/2016 | 45.92% | 202,775 | 156,859 |
| 1/1/2017 | 47.19% | 209,503 | 162,313 |
| 2/1/2017 | 47.65% | 212,330 | 164,675 |
| 3/1/2017 | 52.99% | 222,583 | 169,589 |
| 4/1/2017 | 54.43% | 224,094 | 169,663 |
| Current | 51.88% | 221,080 | 169,201 |
So you can see it was not a great week, my hypothetical dropping from $224k to $221K. Here are the individual stocks during the week:
| Stock | Last Week | Current | Dividend | Change |
| RHI | 48.83 | 45.24 | - | -7.4% |
| ATHM | 31.77 | 29.55 | - | -7.0% |
| CA | 31.72 | 31.88 | - | 0.5% |
| AMGN | 164.07 | 163.38 | - | -0.4% |
| MPAA | 30.73 | 28.44 | - | -7.5% |
| AKRX | 24.08 | 29.77 | - | 23.6% |
| MSGN | 23.35 | 24.20 | - | 3.6% |
| VLO | 66.29 | 65.57 | - | -1.1% |
| BRCD | 12.47 | 12.51 | - | 0.3% |
| YY | 46.11 | 45.97 | - | -0.3% |
| CSCO | 33.80 | 32.96 | - | -2.5% |
| KLAC | 95.07 | 96.54 | - | 1.5% |
| RGR | 53.55 | 56.00 | - | 4.6% |
| GILD | 67.92 | 66.58 | - | -2.0% |
| CBI | 30.75 | 30.36 | - | -1.3% |
| GNC | 7.36 | 6.65 | - | -9.6% |
| WNC | 20.69 | 20.30 | - | -1.9% |
First, thanks goodness for AKRX. Up 23%, with the bulk of it on Friday. Volume was heavy all week and then FRiday went through the roof as mid-day rumors broke that they might get bought. The rumors turned to fact, they were in negotiations (Fresenius Says It's in Talks to Buy Generic Drugmaker Akorn). The stock was up another 10% after hours Friday when this came out.
But, despite the AKRX spike, we were down. Oh, one other rumor was MSGN (MSG Networks is looking to sell). We shall see.
Here are my tranches:
| 5/6/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BRCD | $7.97 | $12.51 | $0.17 | 59.0% | 17.7% |
| CBI | $37.82 | $30.36 | $0.00 | -19.7% | 17.7% |
| HSII | $18.51 | $25.05 | $0.39 | 37.4% | 17.7% |
| RHI | $38.51 | $45.24 | $0.90 | 19.8% | 17.7% |
| UTHR | $107.99 | $122.53 | $0.00 | 13.5% | 17.7% |
| Totals | 22.0% | 17.7% | |||
| 8/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CSCO | $31.20 | $32.96 | $0.26 | 6.5% | 9.3% |
| GNC | $19.79 | $6.65 | $0.38 | -64.5% | 9.3% |
| VLO | $54.73 | $65.57 | $1.30 | 22.2% | 9.3% |
| MSGN | $16.68 | $24.20 | $0.00 | 45.1% | 9.3% |
| GILD | $79.33 | $66.58 | $1.46 | -14.2% | 9.3% |
| Totals | -1.0% | 9.3% | |||
| 11/15/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| MPAA | $26.55 | $28.44 | $0.00 | 7.1% | 9.1% |
| ATHM | $22.61 | $29.55 | $0.00 | 30.7% | 9.1% |
| AMGN | $145.14 | $163.38 | $1.00 | 13.3% | 9.1% |
| RHI | $43.23 | $45.24 | $0.46 | 5.7% | 9.1% |
| CA | $31.11 | $31.88 | $0.26 | 3.3% | 9.1% |
| Totals | 12.0% | 9.1% | |||
| 2/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| AKRX | $19.10 | $29.77 | $0.00 | 55.9% | 3.4% |
| YY | $41.08 | $45.97 | $0.00 | 11.9% | 3.4% |
| KLAC | $85.11 | $96.54 | $0.54 | 14.1% | 3.4% |
| WNC | $17.65 | $20.30 | $0.00 | 15.0% | 3.4% |
| RGR | $52.75 | $56.00 | $0.44 | 7.0% | 3.4% |
| Totals | 20.8% | 3.4% |
So May 6th has less than a month to go and looks to have a good chance at being a winner. August is a mess, despite nice MSGN pick. November looks good and the Febtruary is spectacular so far as AKRX is up over 50% (exclusive of happy hour bump) and I (so far) managed to avoid stinkers (the real key).
Here is an overall summary:
| Category/Tranche | August | November | February | May | Total |
| Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
| Current Tranche | -1.0% | 12.0% | 20.8% | 22.0% | 13.3% |
| Previous Tranche | 2.8% | 8.0% | 10.7% | -25.2% | -3.3% |
| Tranche -2 | 11.2% | 69.4% | -14.3% | 18.3% | 21.2% |
| Tranche -3 | 41.4% | 14.2% | 8.5% | 33.0% | 24.3% |
| Tranche -4 | 14.1% | 43.7% | 78.3% | 0.0% | 34.0% |
| MFI Overall Gain | 82.6% | 236.6% | 121.6% | 43.5% | 121.1% |
| Current Balance | 45,652 | 84,156 | 55,403 | 35,868 | 221,080 |
| R3K Current Tranche | 9.3% | 9.1% | 3.4% | 17.7% | 9.9% |
| R3K Overall Gain | 82.6% | 86.0% | 67.2% | 56.5% | 69.2% |
| R3K Balance | 41,779 | 46,495 | 41,812 | 39,116 | 169,201 |
| Annualized IRR | 13.8% | 31.8% | 20.9% | 9.6% | 19.0% |
Current picks are still strong, despite August issues. I am starting to think about May picks - I actually have some ideas I am excited about.
MFI Formula
These are stocks picked by formula rather than my selecting. Formula is based on my backtesting - stocks have to have yield of 2.4% or greater and be in upper 2/3 in market cap. I then randomly select 5 names. I did start a new tranche on Monday. Given how it did Monday, I would have been better selling my retiring tranche on Monday and starting new tranche Tuesday. Oh well.
Same tables.
Same tables.
| Date | Differential | Value | R3K Value |
| 10/1/2014 | 0.00% | 100,000 | 100,000 |
| 11/1/2014 | 1.63% | 102,288 | 100,658 |
| 12/1/2014 | 0.30% | 101,375 | 101,075 |
| 1/1/2015 | -0.33% | 100,664 | 100,995 |
| 2/1/2015 | 1.67% | 101,281 | 99,611 |
| 3/1/2015 | 3.62% | 106,073 | 102,454 |
| 4/1/2015 | 5.09% | 106,781 | 101,695 |
| 5/1/2015 | 5.78% | 107,859 | 102,077 |
| 6/1/2015 | 5.08% | 108,213 | 103,134 |
| 7/1/2015 | 4.82% | 106,423 | 101,604 |
| 8/1/2015 | 3.71% | 107,112 | 103,404 |
| 9/1/2015 | 4.38% | 101,523 | 97,139 |
| 10/1/2015 | 6.39% | 100,703 | 94,312 |
| 11/1/2015 | 2.93% | 104,835 | 101,907 |
| 12/1/2015 | -3.48% | 99,443 | 102,926 |
| 1/1/2016 | -3.36% | 96,830 | 100,012 |
| 2/1/2016 | -0.72% | 93,797 | 94,367 |
| 3/1/2016 | 4.07% | 98,588 | 94,367 |
| 4/1/2016 | 0.34% | 102,371 | 101,548 |
| 5/1/2016 | -1.91% | 99,774 | 101,200 |
| 6/1/2016 | -0.42% | 103,145 | 103,568 |
| 7/1/2016 | -0.19% | 103,022 | 103,216 |
| 8/1/2016 | 2.56% | 109,419 | 106,857 |
| 9/1/2016 | -0.34% | 106,704 | 107,048 |
| 10/1/2016 | -0.85% | 106,377 | 107,230 |
| 11/1/2016 | 0.42% | 105,421 | 105,003 |
| 12/1/2016 | 1.62% | 110,705 | 109,088 |
| 1/1/2017 | 1.57% | 113,406 | 111,832 |
| 2/1/2017 | 1.32% | 114,809 | 113,486 |
| 3/1/2017 | -5.09% | 112,930 | 118,024 |
| 4/1/2017 | -1.86% | 116,227 | 118,091 |
| Current | -2.78% | 114,877 | 117,662 |
You can see I lost a little ground first week of April.
| Stock | Last Week | Current | Dividend | Change |
| CPLA | 85.03 | 84.75 | - | -0.3% |
| GILD | 67.92 | 66.58 | - | -2.0% |
| SYNT | 16.83 | 16.89 | - | 0.4% |
| CSCO | 33.80 | 32.96 | - | -2.5% |
| TGNA | 25.62 | 25.29 | - | -1.3% |
| HPQ | 17.88 | 17.37 | - | -2.9% |
| CA | 31.72 | 31.88 | - | 0.5% |
| PBI | 13.11 | 12.99 | - | -0.9% |
| OMC | 86.24 | 85.72 | - | -0.6% |
| BKE | 18.25 | 17.50 | - | -4.1% |
| LDOS | 51.14 | 50.63 | - | -1.0% |
| ILG | 20.96 | 21.19 | - | 1.1% |
| VIAB | 46.62 | 45.27 | - | -2.9% |
| HRB | 23.25 | 23.40 | - | 0.6% |
| GME | 22.55 | 21.66 | -3.9% |
wow - not a great picture. Not many stocks up last week. BKE right out of the chute stunk (same store sales were down 10%... and that actually caused the stock to go up!).
| 7/1/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| ILG | $16.76 | $21.19 | $0.39 | 28.8% | 13.0% |
| VIAB | $44.00 | $45.27 | $0.60 | 4.3% | 13.0% |
| CPLA | $53.22 | $84.75 | $1.21 | 61.5% | 13.0% |
| HRB | $23.62 | $23.40 | $0.66 | 1.9% | 13.0% |
| PBI | $17.69 | $12.99 | $0.56 | -23.4% | 13.0% |
| Totals | 14.6% | 13.0% | |||
| 10/3/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| CPLA | $58.15 | $84.75 | $0.82 | 47.2% | 10.0% |
| LDOS | $43.01 | $50.63 | $0.00 | 17.7% | 10.0% |
| GME | $27.70 | $21.66 | $0.75 | -19.1% | 10.0% |
| PBI | $18.15 | $12.99 | $0.38 | -26.4% | 10.0% |
| CSCO | $31.72 | $32.96 | $0.81 | 6.5% | 10.0% |
| Totals | 5.2% | 10.0% | |||
| 12/30/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GILD | $71.69 | $66.58 | $0.52 | -6.4% | 5.1% |
| HPQ | $15.00 | $17.37 | $0.13 | 16.7% | 5.1% |
| TGNA | $21.33 | $25.29 | $0.14 | 19.2% | 5.1% |
| CA | $31.99 | $31.88 | $0.26 | 0.5% | 5.1% |
| SYNT | $19.79 | $16.89 | $0.00 | -14.7% | 5.1% |
| Totals | 3.1% | 5.1% | |||
| 4/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
| BKE | $18.25 | $17.50 | $0.00 | -4.1% | -0.4% |
| CSCO | $33.91 | $32.96 | $0.29 | -1.9% | -0.4% |
| GILD | $67.87 | $66.58 | $0.00 | -1.9% | -0.4% |
| OMC | $86.24 | $85.72 | $0.00 | -0.6% | -0.4% |
| SYNT | $16.80 | $16.89 | $0.00 | 0.5% | -0.4% |
| Totals | -1.6% | -0.4% |
While not terrible, you can look at these tables and see that it is a struggle. The 5 "Formula" stocks I did not pick (via Mr Random) were down 50 basis points. It is a marathon as they say... but I am behind.
| Category/Tranche | October | January | April | July | Total |
| Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
| Current Tranche | 5.2% | 3.1% | -1.6% | 14.6% | 4.4% |
| Previous Tranche | 5.5% | 9.3% | 25.2% | -12.5% | 7.1% |
| Tranche -2 | 0.5% | 11.0% | -0.2% | - | 2.8% |
| MFI Overall Gain | 11.5% | 25.0% | 22.8% | 0.3% | 14.9% |
| Current Balance | 278,480 | 312,449 | 307,341 | 250,501 | 1,148,771 |
| R3K Current Tranche | 10.0% | 5.1% | -0.4% | 13.0% | 7.0% |
| R3K Overall Gain | 24.3% | 17.5% | 16.3% | 12.7% | 17.7% |
| R3K Balance | 310,474 | 293,708 | 290,880 | 281,546 | 1,176,607 |
| Annualized IRR | 4.4% | 10.3% | 10.7% | 0.2% | 6.4% |
So current tranches are up 4.4% versus R3K 7.0%. I would suggest that 2.5 point spread is pretty typical for MFI portfolios started over past year (from my tracking work). So at least I am doing about "MFI average" here.
Dividends and Miscellaneous
While I am having a little sellers remorse in closing out some of my big dividend holdings the previous week - I am sleeping well at night. I am going to predict that someday this year I will get a better entry point. I did also pare down my BAC warrants during the week at $11.10 by 30%. I have been using that 30% as a bit of a swing/channel trade. So far it has worked pretty well.
Have a great day. Here is an investing quote for the road:
Posts
No comments:
Post a Comment