Sunday, March 9, 2008

Current holdings as of 3/7/08

Current holdings and gain (loss) to date:

5/7/07 tranche
FDG +109.87%
JAKK +8.80%
MOCO +1.75%
MTEX -50.41%
AXCA (merger 2/8/08) +29.79%

Tranche cumulative = 19.97%, VFINX = -12.91%

7/9/07 tranche
EPIQ -15.55%
IVAC -45.77%
LRCX -26.63%
PACR -32.31%
PBT +75.03%

Tranche = -9.02%, VFINX = -14.39%

9/7/07 tranche
FTO -22.37%
KG -40.73%
BPT +34.17%
HSII -16.06%
TZOO -46.21%

Tranche = -18.46%, VFINX = -11.68%

11/7/07 tranche
BBSI -4.24%
BVF -27.06%
HOC -22.21%
LCAV -22.47%
ASPV (merger 1/7/08) +2.12%

Tranche = -14.71%, VFINX = -14.28%

1/7/08 tranche
RAIL +20.24%
EPAX +7.71%
SIMG +9.24%
VPHM +1.67%
IAR -68.05%

Tranche = -5.94%, VFINX = -8.03%

3/7/08 tranche
HLYS -2.30%
ICFI -0.56%
PRXI +2.65%
SRSL -3.03%
USMO -4.57%

Tranche = -1.56%, VFINX = -0.85%

Saturday, March 8, 2008

2 YEAR ANNIVERSARY POST

It's been a while since I've posted. Due to family health problems and simply being too busy to keep this up, I haven't been able to maintain this. But, for the whopping 7 people who were reading this on a regular basis (thanks!!), I thought I'd update everyone as I've just hit my two year anniversary of using the MFI method. The real test seems to be how it will have done over 3 - 5 years, but now we're getting well into it.

Bottom line? Amazingly, even after all the market turbulence, I'm up over my benchmark, and still positive overall. Not better than I would have done if I had just stuck my money in a money market account, but neither is the S&P 500. Plus, one can't invest in stocks with that attitude. I'm not capable of being a market timer.

However, I think I may be fortunate enough to take advantage of this market dip with MFI. I just recently increased my allocation to MFI stocks and hopefully this will pay off with my weighted results.

Yesterday was the two year anniversary, and it consisted of selling off the single worst tranche I've had. 46.86% loss vs. 4.56% loss for VFINX. OUCH!!! The BEST stock in the lot was TBI (Trueblue, Inc., previously Labor Ready (LRW)) at a 36% loss. The random method picked only winners this time.

But my upcoming tranche is a big-time winner at a 20% gain vs. a 13% loss for VFINX, led by one time loser FDG, which is up 110%! In the first year with FDG, I lost 23%. It was still on MFI when it came up for renewal, I held onto it, and look at the results! On the flip side, in yesterday's closed tranche, I sold PNCL at a 41% loss, also a holdover from the first year. In its first year, it was a 145% gain.

Other examples of first year holdover results:

FTO - Yr 1 40% gain. Yr 2 (to date) - 22% loss.
KG - Yr 1 10% loss. Yr 2 (to date) - 41% loss (ouch)
ASPV - Yr 1 39% gain. Yr 2 (sold in merger) - 2 % gain
RAIL - Yr 1 43% loss. Yr 2 (to date) - 20% gain

So, very mixed bag on the one departure I do from the random method. But, FDG has made it seem like a worthwhile strategy (my overall view on this departure from being random is that these stocks are still in MFI because they have yet to pull off a value recovery but still have the fundamentals to do so. Since one year is a somewhat arbitrary number for a holding period, I'm comfortable giving them more. I was particularly happy that RAIL was still there because it had been in the news for months as a stock poised to take off and it wasn't budging. It literally didn't start increasing until about a month after I chose to hold it).

Overall results to my two year mark (3/7/08):
(all amounts are since inception (3/7/06) and in total, not annual averages, unless mentioned otherwise)

Weighted average return MFI: 1.31% S&P 500: -4.49%
"MFI Fund" return: 5.79% vs. S&P 500: 1.18%
Average tranche return (this is roughly avg annual performance):
MFI: 0.40% vs. VFINX: -0.99%

In general, I continue to be happy with the results. There was a period it was pretty bleak, but the portfolio seems to have weathered the volatility well.

So, to close out, here's a chart of my portfolio since inception:



Good luck to everyone over the next year!

-A