Weekend Update 9/23/17

Weekend Update

I am in Bar Harbor Maine this weekend.  What an amazing place.  I am hampered somewhat though by a bad case of poison oak - it is really gross.

Tough week to watch the news.  Puerto Rico got leveled by Maria. We were there for New Years 2017, beautiful island - heart goes out to people who have to rebuild.  And with limited electricity.  Now I see a dam may break.

Then we have Trump bashing the NFL and Steph Curry - doesn't come across as very presidential.

Then Mexico City having a bad earthquake - with hundreds killed.  All of this really has to be stretching resources that can help.  I will be donating to the Red Cross today.

You have found your way to the MFI Diary, a blog where I let readers know my thoughts and performance on real life, real dollar Magic Formula Portfolios (based of course on "The Little Book The Beats The Market" by Joel Greenblatt.  I also spend some effort tracking hypothetical portfolios based on downloads from the official website going back to January 2006.

Of course, I have to have a disclaimer - I am just a guy with a spreadsheet and not a stock advisor.  You should do your own due diligence before acting on anything you read here.

Any opinions you read are my own unless they end up being really bad.

The Past Week

Last week was a good week for me.  Friday was a great day, lead by PSXP news (Phillips 66 Partners to buy assets from Phillips 66 in $2.4B deal).  Here is where I stand year to date:

Component	YTD
Overall	+11.18%
MFI Select	+21.17%
MFI Formula	+8.42%
Miscellaneous	+1.91%
Dividend	+12.77%
R3K	+12.64%
MFI Index	+1.03%

Amazing R3K is up 12.6% on the year.  My two MFI portfolios (Select and Formula) are doing reasonably well.  The MFI Index finally got back into the green.  Here are my MFI stocks during the week:

Stock	Last Week	Current	Dividend	Change
ATHM	65.83	64.17	-	-2.5%
RHI	46.47	48.60	-	4.6%
YY	77.11	80.52	-	4.4%
AKRX	33.10	33.06	-	-0.1%
AMGN	187.47	185.76	-	-0.9%
CA	33.10	32.68	-	-1.3%
ICHR	24.33	24.69	-	1.5%
WNC	20.86	21.29	-	2.1%
SIMO	47.44	45.00	-	-5.1%
MPAA	27.05	28.01	-	3.5%
MD	42.90	42.14	-	-1.8%
GHC	562.80	567.55	-	0.8%
WSTC	23.38	23.51	-	0.6%
QCOM	52.19	52.09	-	-0.2%
KLAC	98.64	100.59	-	2.0%
MSGN	21.25	20.80	-	-2.1%
TGNA	20.97	21.60	-	3.0%
RGR	47.30	51.00		7.8%
TIME	13.05	12.55		-3.8%

Stock	Last Week	Current	Dividend	Change
SYNT	18.09	19.06	-	5.4%
CSCO	32.44	33.37	-	2.9%
HPQ	19.47	19.94	-	2.4%
GILD	82.36	83.27	-	1.1%
GME	20.29	20.01	-	-1.4%
CA	33.10	32.68	-	-1.3%
TGNA	20.97	21.60	-	3.0%
OMC	73.04	75.00	0.56	3.5%
CPLA	68.20	67.35	-	-1.2%
BKE	15.75	15.95	-	1.3%
RGR	47.30	51.00	-	7.8%
LDOS	56.40	58.83	-	4.3%
PBI	12.98	13.58	-	4.6%

You can see looking at the blue table that it was a good week, especially for my maligned Formula stocks.

MFI Select

Now for real money.  MFI Select is a portfolio of 4 tranches, each with 5 stocks that I buy and hold for a year per the "rules" from "The Little Book That Beats the Markets".  I rebooted this portfolio 5 years ago after quitting MFI for a year in 2011.  It has done well.  Here is how a hypothetical $100,000 invested in the first four tranches would have grown since 2012:

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	45.60%	209,503	163,936
2/1/2017	45.20%	212,330	167,146
3/1/2017	48.80%	222,583	173,829
4/1/2017	55.70%	229,473	173,735
5/1/2017	55.80%	231,497	175,712
6/1/2017	53.40%	230,599	177,203
7/1/2017	60.28%	239,060	178,782
8/1/2017	57.76%	239,924	182,163
9/1/2017	68.85%	251,265	182,419
Current	72.01%	257,254	185,244

You can see how well this approach has done in 2017.  From 209,503 to 257,254.  And lead has expanded from 45.6% to 72.0%.  Woo-hoo!

Here are my 4 tranches of 5 stocks that are open:

11/15/2016	Start	Current	Dividend	Pct Gain	R3K Gain
MPAA	$26.55	$28.01	$0.00	5.5%	16.8%
ATHM	$22.61	$64.17	$0.00	183.8%	16.8%
AMGN	$145.14	$185.76	$3.15	30.2%	16.8%
RHI	$43.23	$48.60	$0.94	14.6%	16.8%
CA	$31.11	$32.68	$0.77	7.5%	16.8%
Totals				48.3%	16.8%
2/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
AKRX	$19.10	$33.06	$0.00	73.1%	10.6%
YY	$41.08	$80.52	$0.00	96.0%	10.6%
KLAC	$85.11	$100.59	$1.67	20.2%	10.6%
WNC	$17.65	$21.29	$0.06	21.0%	10.6%
RGR	$52.75	$51.00	$1.15	-1.1%	10.6%
Totals				41.8%	10.6%
5/6/2017	Start	Current	Dividend	Pct Gain	R3K Gain
WSTC	$24.15	$23.51	$0.00	-2.7%	4.9%
TGNA	$25.75	$21.60	$0.14	-15.6%	4.9%
TIME	$15.05	$12.55	$0.04	-16.3%	4.9%
MSGN	$23.55	$20.80	$0.00	-11.7%	4.9%
QCOM	$54.93	$52.09	$1.14	-3.1%	4.9%
Totals				-9.9%	4.9%
8/15/2017	Start	Current	Dividend	Pct Gain	R3K Gain
GHC	$591.10	$567.55	$0.00	-4.0%	2.1%
ICHR	$19.80	$24.69	$0.00	24.7%	2.1%
MD	$43.00	$42.14	$0.00	-2.0%	2.1%
SIMO	$43.05	$45.00	$0.00	4.5%	2.1%
RHI	$44.15	$48.60	$0.24	10.6%	2.1%
Totals				6.8%	2.1%

Both February and November being up over 40% is really helping.  May was just 5 bad picks, they are all in the red.  The 10 stocks I did not pick are up over 7%, lead by YRD at 84%. Darn it.  Then my August picks are off to a snappy start.

Here is a table showing how I have done since 2012:

Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	6.8%	48.3%	41.8%	-9.9%	21.7%
Previous Tranche	-0.1%	8.0%	10.7%	19.1%	15.9%
Tranche -2	2.8%	69.4%	-14.3%	-25.2%	8.2%
Tranche -3	11.2%	14.2%	8.5%	18.3%	13.0%
Tranche -4	41.4%	43.7%	78.3%	33.0%	49.1%
Tranche -5	14.1%	0.0%	0.0%	0.0%	3.5%
MFI Overall Gain	96.8%	345.7%	160.2%	26.3%	157.3%
Current Balance	49,200	111,427	65,058	31,569	257,254
R3K Current Tranche	2.1%	16.8%	10.6%	4.9%	8.6%
R3K Overall Gain	95.6%	99.0%	79.0%	67.4%	85.2%
R3K Balance	48,898	49,742	44,746	41,859	185,244
Annualized IRR	14.2%	36.0%	22.9%	5.5%	19.6%

The 19.6% annualized IRR is solid.

MFI Formula

This is my newer real money MFI portfolio, I started it 3 years ago and it has underperformed the benchmarks a bit.  But my backtesting shows it will work, so I will give it time.  This portfolio is comprised of stocks that have at least a 2.4% dividend yield,

Here are the 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
5/1/2017	1.11%	120,403	119,296
6/1/2017	-2.65%	117,824	120,472
7/1/2017	-2.40%	119,144	121,545
8/1/2017	-1.96%	121,873	123,828
9/1/2017	-6.09%	117,879	123,973
Current	-3.13%	122,764	125,891

You can see that I am bouncing back a bit in September after a horrible August.

10/3/2016	Start	Current	Dividend	Pct Gain	R3K Gain
CPLA	$58.15	$67.35	$1.64	18.6%	17.7%
LDOS	$43.01	$58.83	$1.28	39.8%	17.7%
GME	$27.70	$20.01	$1.51	-22.3%	17.7%
PBI	$18.15	$13.58	$0.75	-21.0%	17.7%
CSCO	$31.72	$33.37	$1.10	8.7%	17.7%
Totals				4.7%	17.7%
12/30/2016	Start	Current	Dividend	Pct Gain	R3K Gain
GILD	$71.69	$83.27	$1.56	18.3%	12.5%
HPQ	$15.00	$19.94	$0.53	36.5%	12.5%
TGNA	$21.33	$21.60	$0.28	2.6%	12.5%
CA	$31.99	$32.68	$0.77	4.5%	12.5%
SYNT	$19.79	$19.06	$0.00	-3.7%	12.5%
Totals				11.7%	12.5%
4/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$18.45	$15.95	$0.50	-10.8%	6.6%
CSCO	$33.76	$33.37	$0.58	0.6%	6.6%
GILD	$67.50	$83.27	$1.04	24.9%	6.6%
OMC	$85.53	$75.00	$1.10	-11.0%	6.6%
SYNT	$16.76	$19.06	$0.00	13.7%	6.6%
Totals				3.5%	6.6%
7/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$30.98	$33.37	$0.00	7.7%	3.5%
GME	$20.95	$20.01	$0.38	-2.7%	3.5%
HPQ	$17.60	$19.94	$0.13	14.0%	3.5%
RGR	$60.70	$51.00	$0.23	-15.6%	3.5%
SYNT	$16.21	$19.06	$0.00	17.6%	3.5%
Totals				4.2%	3.5%

Nice to see the July portfolio leading.  The October portfolio has just a week left.

Category/Tranche	October	January	April	July	Total
Initial Investment	249,820	249,939	250,180	249,728	999,667
Current Tranche	4.7%	11.7%	3.5%	4.2%	6.1%
Previous Tranche	5.5%	9.3%	25.2%	26.7%	16.1%
Tranche -2	0.5%	11.0%	-0.2%	-12.5%	-0.3%
MFI Overall Gain	11.0%	35.4%	29.2%	15.6%	22.8%
Current Balance	277,336	338,490	323,185	288,627	1,227,639
R3K Current Tranche	17.7%	12.5%	6.6%	3.5%	10.1%
R3K Overall Gain	33.0%	25.8%	24.5%	20.6%	25.9%
R3K Balance	332,155	314,317	311,374	301,057	1,258,903
Annualized IRR	3.6%	11.7%	10.9%	6.7%	8.2%

Dividends and Miscellaneous

My Misc portfolio is higher risk and my smallest portfolio. It is now at least back in the black at almost 2%.  The dividend portfolio is actually my largest and does have some bond type securities.  It has done really well this year.  Here are my dividend  portfolio holdings:

Stock	Initial	Current	Div/Sh	Gain/Loss	Yield
EVG	14.46	14.36	0.10	0.0%	6.4%
FDEU	18.40	19.29	0.48	7.5%	20.4%
KCLI	49.31	49.75	0.22	1.3%	2.4%
PSXP	47.39	51.40	0.38	9.3%	4.8%
LADR	13.01	13.61	0.30	7.0%	8.8%
NS	41.04	40.02	-	-2.5%	10.9%
RLJ-PA	28.45	27.80	-	-2.3%	7.1%
OIBAX	5.85	5.99	0.40	9.2%	4.0%
FSFR	8.68	8.88	0.19	4.6%	8.6%
DSL	19.47	21.16	1.35	15.6%	8.5%
JQC	8.20	8.35	0.65	9.8%	7.5%
TK	5.24	8.81	0.06	69.1%	2.5%
RILY	15.58	16.75	0.13	8.4%	1.6%
ISBC	13.15	13.46	0.08	3.0%	2.4%
VTIBX	10.92	10.91	0.01	0.0%	1.1%
GLDI	9.29	9.17	0.10	-0.2%	9.0%
CPLP	3.57	3.56	-	-0.3%	9.0%
TGONF	10.91	12.32	1.76	29.1%	5.7%
NRZ	16.22	16.89	0.38	6.5%	11.8%
SBRA	23.53	22.21	0.65	-2.9%	6.5%
DHF	3.34	3.50	0.12	8.2%	8.1%
BKE	14.15	15.95	-	12.7%	6.3%
O	25.26	57.57	20.53	209.2%	4.4%

Some of my newer positions are off to a slow start: NS, RLJ-PA and CPLP.  But frankly I am just happy to sit back and watch the dividends flow in.  It is a high yielding portfolio at 7.1%, so there is definitely some risk here.

Off to hike in Acadia.

Have a great weekend.