Buy When Others Are Fearful Portfolio

Buy When Others Are Fearful Portfolio

Warren Buffett has famously said to "buy when others are fearful".  As I am retired, but still enjoy putting my actuarial analytical skills to work, I thought I might try a test portfolio of this axiom.

So here is what I am going to do.

1. I will start with all the stocks I owned at the start of 2018 as a list (note this is not just "magic formula", but any and all stocks I owned).
2. If any stock drops 10% from 1/1/18 on, I will buy a hypothetical $10,000 worth of that stock.
3. I will assume the price is the average of the high/low from the following day.
4. That purchase will be held for a year.
5. That purchase then also sets the bar on any further purchases of that stock (it has to fall 10% from the purchase price).

Rules seem pretty straightforward.  I will start the work now.  I also think that at the start of each new year, I create a new list of stocks based on what I actually hold then.  So basically stocks I like, but I am buying on drops.  Let us do one stock as an example.

So first stock (alphabetically) is ACBI.  Since the start of the year, the furthest it has deviated down is 7.2%.  So I would not have bought any shares.

Second stock is AKRX (ooh, this is not going to be a good start for this approach!).  It first dropped 10% on February 23 when it closed at 30.12.  So I would buy at average of high/low the following day at $30.16.  I would not buy again unless it dropped another 10% (which it will).  So far, I would have bought 4 tranches of AKRX (following these rules):

Stock	Date	Price	Shares	Value	Current	Div	Gain/Loss	Next Buy
AXRX	24-Feb	30.16	332	10,000	14.03	0	(5,348)	27.14
AXRX	28-Feb	18.01	555	10,000	14.03	0	(2,210)	16.21
AXRX	24-Apr	13.45	743	10,000	14.03	0	431	12.11
AXRX	4-May	11.76	850	10,000	14.03	0	1,930	10.58

So, definitely not working thus far, great example though of buying when fearful as deal fell through.

I like the concept and presentation.  It'll take a while and I will write a blog about this approach once a month or so.  What do people think?  Will this "formula" do decently?