The markets kept up their general Jekyll and Hyde routine going this week. "Go right! No, the other right!". It felt like I went through the blender, but all-in-all with a strong Friday it was a decent week.
The theme for the year continues, my MFI (and all MFI approaches) portfolios continue to do very well, but my Misc approach is weighing down overall results.
You have found your way to the MFI Diary. This is a blog following the investment approach described by Joel Greenblatt in The Little Book That Beats The Market. I have been writing this blog and following his investment approach since early 2006.
I did create a guide recently for new readers to my blog that point you to some key/interesting posts. I encourage you to give it a whirl Guide To New Readers). (PS - I continue to struggle to make this link work. You can instead go to Blog archive on left margin of this blog and you will find a link in October 2017). 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.
Onwards.
Last Week
It does get frustrating when you see your speculative stocks get crushed all the time. And it is also frustrating to either buy the wrong stock or sell the wrong stock. I decided to sell WLL at start of week as I try to reduce my Misc portfolio, which has been a drag. And then right after I sell, they have great earnings and pop 25%. Did I mention that is frustrating?
Then the Misc stock I decided to hold, OMER, got crushed like a cigarette under the heel of a shoe. They are primarily valued on a drug in development (OMS721). But their one commercial drug, Omidria is struggling. So Omer is down 41% in past three weeks (29% drop this past week). Did I mention that this is frustrating?
Here is a table summarizing the past week:
Component | YTD | Week Change |
Overall | -1.4% | +0.7% |
MFI Select | +2.7% | +0.7% |
MFI Formula | +6.1% | +0.8% |
MFI Combined | +4.3% | +0.7% |
Miscellaneous | -9.5% | +0.2% |
Dividend | -2.1% | +0.9% |
Dividend Index | -2.4% | -0.1% |
R3K Index | +2.6% | +0.6% |
Blended Index | +0.6% | +0.3% |
MFI Index | +9.5% | +0.9% |
GARIX | +2.4% | +0.6% |
So you can see that Misc was up 0.2% on the week despite the OMER crash and the mistake of selling WLL. But still down 9.5% on the year. However, my two real money MFI portfolios were up 0.7% on the week and now at 4.3% on the year (MFI Index is up 9.5% on the year).
MFI Select
Regular readers of the almost world famous MFI Diary will know that I have two real $ MFI
portfolios: Select and Formula. I started Select in August 2012 after ending my MFI investing a year earlier (August 2011) from frustration (there is that word again). MFI in total has struggled as too many stocks fall in the stinker category and drop 30% or more in a year (I have found that standard deviation amongst MFI stocks is much higher than the broader market). So both my MFI approaches attempt to minimize how many stinkers I pick. Select is as it sounds, I can Select whatever stocks I want, either from official screens or my own internal screens. I try to find true MFI stocks, those that have earnings that can be replicated,,, as opposed to one time payments or ending stream of revenues.
Both my MFI portfolios consist of 4 tranches of 5 stocks apiece. I buy and hold the stocks for a year. i have a great deal of conviction, last year I added about 30% more cash to each tranche at anniversary dates. And I am doing that again this year. Here are the 4 open tranches:
5/6/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
WSTC | $24.15 | $23.50 | $0.00 | -2.7% | 15.5% |
TGNA | $25.75 | $23.52 | $0.21 | -7.9% | 15.5% |
TIME | $15.05 | $18.50 | $0.08 | 23.5% | 15.5% |
MSGN | $23.55 | $25.05 | $0.00 | 6.4% | 15.5% |
QCOM | $54.93 | $63.32 | $1.71 | 18.4% | 15.5% |
Totals | 7.5% | 15.5% | |||
8/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
GHC | $591.10 | $601.45 | $2.54 | 2.2% | 12.5% |
ICHR | $19.80 | $25.75 | $0.00 | 30.1% | 12.5% |
MD | $43.00 | $57.35 | $0.00 | 33.4% | 12.5% |
SIMO | $43.05 | $45.13 | $0.60 | 6.2% | 12.5% |
RHI | $44.15 | $57.85 | $0.76 | 32.8% | 12.5% |
Totals | 20.9% | 12.5% | |||
11/15/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
MSGN | $16.67 | $25.05 | $0.00 | 50.3% | 7.2% |
CELG | $100.60 | $95.61 | $0.00 | -5.0% | 7.2% |
EVC | $5.78 | $6.90 | $0.05 | 20.2% | 7.2% |
SIMO | $46.88 | $45.13 | $0.30 | -3.1% | 7.2% |
VIAB | $24.41 | $33.74 | $0.20 | 39.1% | 7.2% |
Totals | 20.3% | 7.2% | |||
2/1/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
AGX | $43.55 | $39.25 | $0.00 | -9.9% | -2.3% |
CASA | $18.81 | $19.64 | $0.00 | 4.4% | -2.3% |
KLAC | $109.80 | $110.47 | $0.59 | 1.1% | -2.3% |
THO | $136.33 | $125.00 | $0.00 | -8.3% | -2.3% |
WDC | $87.74 | $89.14 | $0.00 | 1.6% | -2.3% |
Totals | -2.2% | -2.3% |
My only trailing tranche is May 2017, but other three look solid. Here are my overall results for all tranches:
Category/Tranche | August | November | February | May | Total |
Initial Investment | 25,000 | 25,000 | 25,000 | 25,000 | 100,000 |
Current Tranche | 20.9% | 20.3% | -2.2% | 7.5% | 10.6% |
Previous Tranche | -0.1% | 42.6% | 74.9% | 19.1% | 36.0% |
Tranche -2 | 2.8% | 8.0% | 10.7% | -25.2% | -0.9% |
Tranche -3 | 11.2% | 69.4% | -14.3% | 18.3% | 21.2% |
Tranche -4 | 41.4% | 14.2% | 8.5% | 33.0% | 24.3% |
Tranche -5 | 14.1% | 43.7% | 78.3% | 0.0% | 34.0% |
MFI Overall Gain | 122.9% | 415.7% | 213.9% | 50.6% | 200.8% |
Current Balance | 55,717 | 128,923 | 78,483 | 37,662 | 300,785 |
R3K Current Tranche | 12.5% | 7.2% | -2.3% | 15.5% | 8.2% |
R3K Overall Gain | 115.4% | 119.8% | 97.1% | 84.3% | 104.2% |
R3K Balance | 53,854 | 54,950 | 49,271 | 46,083 | 204,159 |
Annualized IRR | 15.6% | 36.4% | 25.3% | 8.9% | 21.6% |
So on this table, I show every tranche (in summary) I have owned. The first is under August, Tranche -5 and was up 14.1%. Overall a hypothetical $100,000 will have grown to 300,785. That is an annualized IRR of 21.6%. Lot of information in this table for those who want to peruse. I also show all my tranches in detail once a quarter when I retire a tranche.
Here is a table that shows quarter by quarter how $100,000 has grown versus $100,000 in Russell 3000 (R3K):
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 |
Current | 96.63% | 300,785 | 204,159 |
Finally, here is a table showing my MFI stocks for the past week:
Stock | Last Week | Current | Dividend | Change |
MSGN | 25.05 | 25.05 | - | 0.0% |
SIMO | 44.77 | 45.13 | - | 0.8% |
VIAB | 33.50 | 33.74 | - | 0.7% |
CASA | 19.27 | 19.64 | - | 1.9% |
KLAC | 107.52 | 110.47 | - | 2.7% |
THO | 124.83 | 125.00 | - | 0.1% |
AGX | 40.40 | 39.25 | - | -2.8% |
WDC | 84.91 | 89.14 | - | 5.0% |
EVC | 6.80 | 6.90 | - | 1.5% |
ICHR | 25.17 | 25.75 | - | 2.3% |
CELG | 95.26 | 95.61 | - | 0.4% |
RHI | 56.20 | 57.85 | 0.21 | 3.3% |
MD | 56.61 | 57.35 | - | 1.3% |
QCOM | 64.85 | 63.32 | - | -2.4% |
GHC | 599.85 | 601.45 | - | 0.3% |
TGNA | 23.54 | 23.52 | - | -0.1% |
MFI Formula
Okay, same tables with less chatter. MFI Formula was started in October 2014. As opposed to Select, Formula picks are from a Formula and a random number generator. While it has under-performed benchmark for quite a while, it has recently taken the lead.
4/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
BKE | $18.45 | $22.00 | $2.75 | 34.1% | 17.4% |
CSCO | $33.76 | $44.00 | $1.16 | 33.8% | 17.4% |
GILD | $67.50 | $80.91 | $1.56 | 22.2% | 17.4% |
OMC | $85.53 | $77.31 | $1.65 | -7.7% | 17.4% |
SYNT | $16.76 | $26.98 | $0.00 | 61.0% | 17.4% |
Totals | 28.7% | 17.4% | |||
7/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
CSCO | $30.98 | $44.00 | $0.58 | 43.9% | 14.0% |
GME | $20.95 | $15.97 | $0.76 | -20.1% | 14.0% |
HPQ | $17.60 | $22.13 | $0.27 | 27.2% | 14.0% |
RGR | $60.70 | $49.90 | $0.44 | -17.1% | 14.0% |
SYNT | $16.21 | $26.98 | $0.00 | 66.4% | 14.0% |
Totals | 20.1% | 14.0% | |||
10/1/2017 | Start | Current | Dividend | Pct Gain | R3K Gain |
DIN | $43.14 | $68.99 | $0.97 | 62.2% | 9.2% |
GILD | $82.85 | $80.91 | $0.52 | -1.7% | 9.2% |
GME | $20.50 | $15.97 | $0.38 | -20.2% | 9.2% |
HPQ | $20.22 | $22.13 | $0.13 | 10.1% | 9.2% |
OMC | $74.80 | $77.31 | $0.55 | 4.1% | 9.2% |
Totals | 10.9% | 9.2% | |||
1/2/2018 | Start | Current | Dividend | Pct Gain | R3K Gain |
AMGN | $177.11 | $186.67 | $1.32 | 6.1% | 2.1% |
GME | $18.06 | $15.97 | $0.00 | -11.5% | 2.1% |
GILD | $71.64 | $80.91 | $0.00 | 12.9% | 2.1% |
HRB | $26.34 | $26.82 | $0.00 | 1.8% | 2.1% |
OMC | $72.81 | $77.31 | $0.00 | 6.2% | 2.1% |
Totals | 3.1% | 2.1% | |||
Category/Tranche | October | January | April | July | Total |
Initial Investment | 249,820 | 249,939 | 250,180 | 249,728 | 999,667 |
Current Tranche | 10.9% | 3.1% | 28.7% | 20.1% | 14.4% |
Previous Tranche | 7.0% | 16.5% | 25.2% | 26.7% | 19.5% |
Tranche -2 | 5.5% | 9.3% | -0.2% | -12.5% | 0.5% |
Tranche -3 | 0.5% | 11.0% | 0.0% | 0.0% | 2.9% |
MFI Overall Gain | 25.7% | 45.7% | 60.7% | 33.2% | 41.3% |
Current Balance | 314,123 | 364,196 | 401,941 | 332,554 | 1,412,814 |
R3K Current Tranche | 9.2% | 2.1% | 17.4% | 14.0% | 10.7% |
R3K Overall Gain | 46.5% | 37.7% | 37.0% | 32.8% | 38.5% |
R3K Balance | 365,908 | 344,185 | 342,799 | 331,572 | 1,384,464 |
Annualized IRR | 7.0% | 12.7% | 17.7% | 11.4% | 12.2% |
No shame in 12.2% annualized IRR. Current tranches at 14.4% versus benchmark 10.7%.
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 |
Current | 2.84% | 141,281 | 138,446 |
One can really see the acceleration since start of 2018. Note this is based on hypothetical $100,000 at start with no additions. In my real portfolio, I have steadily been adding money past two years.
Stock | Last Week | Current | Dividend | Change |
GILD | 80.70 | 80.91 | - | 0.3% |
OMC | 78.72 | 77.31 | - | -1.8% |
GME | 16.40 | 15.97 | - | -2.6% |
SYNT | 26.87 | 26.98 | - | 0.4% |
CSCO | 44.33 | 44.00 | - | -0.7% |
HPQ | 21.40 | 22.13 | - | 3.4% |
AMGN | 183.55 | 186.67 | - | 1.7% |
HRB | 28.04 | 26.82 | - | -4.4% |
BKE | 21.95 | 22.00 | - | 0.2% |
DIN | 54.67 | 68.99 | - | 26.2% |
RGR | 50.30 | 49.90 | - | -0.8% |
DIN was great this week. HPQ also had strong earnings.
Dividend Portfolio
Those here for MFI can stop reading as now I will review my dividend portfolio (to create income for my retirement) and my Misc portfolio (apparently a way for me to offset MFI gains). With dividend portfolio, I am more focused on income rather than capital gains. I compare it against a portfolio of income holdings listed by Barron's in December.
Dividend Stocks | Start | Current | Divvy | Overall Pct Gain | Weekly Pct Gain | 12/30/17 Price | Yield |
OIBAX | 5.91 | 6.04 | 0.21 | 5.7% | -0.7% | 5.96 | 4.0% |
TK | 7.43 | 7.99 | 0.08 | 8.5% | 7.0% | 9.32 | 2.8% |
KCLI | 48.89 | 44.49 | 0.60 | -7.8% | 3.7% | 45.25 | 2.4% |
KNOP | 21.30 | 20.40 | 0.52 | -1.8% | -3.5% | 20.75 | 10.2% |
GLOP-PB | 25.36 | 25.05 | - | -1.2% | 0.1% | 25.36 | 8.1% |
CPLP | 3.53 | 3.22 | 0.16 | -4.4% | 2.2% | 3.36 | 9.9% |
TGP | 18.28 | 19.10 | 0.14 | 5.3% | 1.6% | 20.15 | 2.9% |
NS | 37.37 | 23.61 | 1.83 | -31.9% | -2.2% | 29.95 | 10.2% |
LADR | 13.01 | 14.91 | 0.62 | 19.4% | 0.9% | 13.63 | 8.5% |
JQC | 8.18 | 8.10 | 0.72 | 7.8% | 0.2% | 8.22 | 7.0% |
PSXP | 47.39 | 50.42 | 1.71 | 10.0% | 0.3% | 52.35 | 5.4% |
FDEU | 18.40 | 18.74 | 1.06 | 7.6% | -0.7% | 18.83 | 7.7% |
ISBC | 13.25 | 13.85 | 0.24 | 6.4% | -0.5% | 13.88 | 2.6% |
EVG | 14.46 | 13.65 | 0.48 | -2.3% | -0.6% | 14.35 | 6.7% |
RILY | 15.58 | 18.95 | 0.21 | 23.0% | -1.0% | 18.10 | 2.5% |
RLJ-PA | 28.45 | 25.80 | 0.98 | -5.9% | 1.0% | 27.01 | 7.6% |
NRZ | 16.56 | 16.57 | 1.17 | 7.1% | -1.9% | 17.88 | 12.1% |
SBRA | 22.28 | 17.32 | 0.63 | -19.4% | 1.9% | 18.77 | 10.4% |
DSL | 19.47 | 19.72 | 2.14 | 12.3% | -0.6% | 20.19 | 9.1% |
OCSI | 8.68 | 7.70 | 0.38 | -6.9% | -1.4% | 8.40 | 9.9% |
TGONF | 11.04 | 12.96 | 1.79 | 33.6% | -1.1% | 13.30 | 5.4% |
AMID | 13.25 | 11.85 | 0.41 | -7.5% | -2.1% | 13.35 | 13.9% |
TOO | 2.33 | 2.71 | 0.01 | 16.5% | 10.6% | 2.36 | 1.5% |
O | 25.82 | 50.20 | 21.18 | 176.4% | 0.5% | 57.02 | 5.1% |
Totals | 2.8% | 1.0% | 6.3% |
While I don't show it here, this portfolio is down 2.1% on the year (shown in table at top of this blog). NS, TK, AMID and O are all down 10% or more this year. TOO is big winner, up almost 15%.
Here is dividend index for comparison. It is down 2.4% in 2018.
Ticker | 12/30/2017 | Current | Dividend | YTD Change | Weekly Change | Yield |
AMLP | 10.79 | 10.37 | 0.21 | -2.0% | -2.3% | 8.12% |
NML | 9.38 | 8.98 | 0.11 | -3.1% | -2.5% | 7.35% |
EPD | 26.51 | 25.73 | 0.42 | -1.4% | -2.6% | 6.54% |
ETP | 17.92 | 19.21 | 0.57 | 10.4% | 3.6% | 11.55% |
FDD | 13.73 | 14.20 | - | 3.4% | 0.3% | 2.69% |
VGK | 59.15 | 59.93 | - | 1.3% | -0.4% | 2.67% |
DDAIF | 84.57 | 88.06 | - | 4.1% | -2.5% | 3.94% |
NVS | 83.96 | 85.33 | 2.75 | 4.9% | -1.8% | 3.19% |
NOBL | 64.04 | 64.05 | - | 0.0% | -0.5% | 1.74% |
VYM | 85.63 | 86.12 | - | 0.6% | 0.0% | 2.79% |
MRK | 56.27 | 54.87 | - | -2.5% | -2.5% | 3.45% |
PEP | 119.92 | 109.68 | 0.81 | -7.9% | -1.2% | 2.88% |
VNQ | 82.98 | 74.92 | - | -9.7% | -0.5% | 4.69% |
RQI | 12.65 | 11.39 | 0.16 | -8.7% | 4.4% | 3.43% |
TCO | 65.43 | 60.82 | - | -7.0% | 0.1% | 4.10% |
SLG | 100.93 | 97.62 | - | -3.3% | 1.5% | 3.22% |
T | 38.88 | 36.72 | 0.49 | -4.3% | -1.1% | 5.36% |
VZ | 52.93 | 48.29 | 0.56 | -7.7% | -3.7% | 4.84% |
CHL | 50.54 | 47.89 | - | -5.2% | 0.0% | 3.82% |
DTEGY | 17.66 | 16.50 | - | -6.6% | 1.0% | 4.12% |
DSU | 11.70 | 11.46 | 0.14 | -0.9% | -0.3% | 2.99% |
HIO | 5.07 | 4.90 | 0.06 | -2.2% | 0.2% | 3.46% |
MUB | 110.74 | 108.62 | 0.63 | -1.3% | 0.0% | 2.29% |
PRHYX | 6.76 | 6.66 | 0.06 | -0.6% | -0.3% | 5.40% |
NEA | 13.75 | 13.06 | 0.12 | -4.1% | -1.5% | 5.51% |
JNK | 36.72 | 36.26 | 0.50 | 0.1% | -0.2% | 5.63% |
VWITX | 14.13 | 13.89 | 0.09 | -1.0% | 0.0% | 0.00% |
PHMIX | 9.09 | 8.97 | 0.10 | -0.3% | -0.1% | 2.80% |
UTG | 30.94 | 28.58 | 0.32 | -6.6% | -1.0% | 4.20% |
XLU | 52.65 | 50.35 | - | -4.4% | 0.5% | 3.48% |
DUK | 84.11 | 77.22 | 0.89 | -7.1% | 0.7% | 4.57% |
EIX | 63.24 | 62.17 | - | -1.7% | 1.8% | 3.58% |
PFF | 38.07 | 37.30 | 0.54 | -0.6% | 0.6% | 5.70% |
JPC | 10.34 | 9.73 | 0.13 | -4.6% | 0.5% | 3.36% |
WFC-PL | 1,309.99 | 1,275.00 | - | -2.7% | 0.0% | 5.80% |
TIP | 114.08 | 111.90 | 0.63 | -1.4% | 0.1% | 2.33% |
SHY | 83.85 | 83.47 | 0.24 | -0.2% | 0.0% | 1.03% |
TLT | 126.86 | 118.13 | 0.77 | -6.3% | -0.5% | 2.61% |
Totals | - | - | - | -2.4% | -0.3% | 4.08% |
Finally, I do hav a group of small banks in my dividend portfolio:
Bank | Start | Current | Dividends | Change | Yield |
ACBI | 16.99 | 17.50 | - | 3.0% | 0.0% |
ASB | 25.69 | 25.20 | - | -1.9% | 2.4% |
FBIZ | 23.69 | 24.58 | 0.14 | 4.4% | 2.3% |
FULT | 18.81 | 18.85 | 0.11 | 0.8% | 2.3% |
FNB | 14.47 | 14.52 | - | 0.3% | 3.3% |
MSBI | 32.96 | 31.44 | 0.22 | -3.9% | 2.8% |
NRIM | 37.47 | 33.85 | 0.21 | -9.1% | 2.6% |
PACW | 48.30 | 53.78 | 0.50 | 12.4% | 3.8% |
SONA | 17.13 | 15.84 | 0.08 | -7.0% | 2.0% |
WNEB | 10.88 | 10.10 | 0.04 | -6.8% | 1.6% |
Total | -0.8% | 2.3% |
Miscellaneous
Not much to say. Struggling. Easily the smallest of my three investing legs (MFI, Divvy and Misc), but still causing problems. But will stay with what I have, not wanting more WLL mistakes. I picked stocks for a reason and will stay with them until the reason no longer exists... not because I am nervous.
Here are the small mining stocks I hold as part of this portfolio:
Miner | Start | Current | Change | 2018 Change |
TORXF | 9.90 | 8.81 | -11.0% | -7.3% |
SAND | 4.48 | 4.66 | 4.0% | -6.6% |
NSU | 2.38 | 2.21 | -7.1% | -9.4% |
KLDX | 2.41 | 1.52 | -36.9% | -41.8% |
KL | 14.49 | 15.60 | 7.7% | 1.6% |
GSS | 0.87 | 0.72 | -16.9% | -19.2% |
FSM | 4.24 | 4.62 | 9.0% | -11.5% |
EXK | 2.14 | 2.26 | 5.6% | -5.4% |
BTG | 2.61 | 3.02 | 15.7% | -2.6% |
EGO | 1.18 | 1.08 | -8.5% | -24.5% |
Total | -3.9% | -12.7% |
At -12.7% they have not helped Misc cause either.
Later everyone!
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