A Much Better Week

Any week in which all the portfolios go up can be considered a good week, as far as I’m concerned. This was undoubtedly the result this week, with each of the portfolios ultimately climbing. The range of performance was wide, of course, ranging from just below 1% to nearly 8%, so the portfolios were definitely not all equal. However, they were nonetheless all in the black (or green) leaving most investors happy as clams. After the debacle that was last week, this is welcome news indeed.

As I mentioned last week, $150 was added to each of the portfolios this week, bringing the baseline up to $1500. Only two months remain before the base will be fixed at $1800 (invested over the course of a year). At that point, the portfolios will live or die on their own merits. Let’s look at the performance this week:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1621.30	$1792.67	+1.17%	+$292.67	+32.91%
Precious Metals	$1548.44	$1789.55	+5.78%	+$289.55	+53.27%
TMW	$1576.85	$1780.40	+3.18%	+$280.40	+39.23%
Caribou	$1490.49	$1763.52	+7.80%	+$263.52	+29.55%
Berkshire Hathaway	$1483.46	$1697.36	+4.03%	+$197.36	+14.74%
Decision Moose	$1524.92	$1687.55	+0.83%	+$187.55	+21.26%

I definitely am enjoying the green of this table much more than I did the red of last week’s table.

I made good on my threat and made the lines thinner in the chart this week. It doesn’t necessarily make it any easier to discern any particular detail, but I think you have a slightly better chance of being able to separate the different portfolios, especially when they are very close to each other, as they are now. I’ll try to break things down somewhat:

• In a briefly shocking moment on Wednesday, the Magic Formula portfolio was no longer in first place, having been surpassed by TMW. By Friday, it managed to rebound, but it’s clear that MFI no longer has the commanding lead it had just a few short weeks ago. The portfolio was one of the more mild ones this week, only gaining just over 1%.
• As you might have inferred from TMW’s brief lead, the week in the market as a whole was not a terrible one, showing small but steady gains each day of the week. This performance was reflected as well in Berkshire Hathaway’s results, which finally showed a glimmer of a trend beyond that of neutrality.
• The precious metals did quite well this week, suggesting investors are continuing to invest in real assets rather than cash, but also warning of either a bubble or inflation. Either way, I like to use the precious metals as a benchmark.
• The big winner, however, this week was definitely the Caribou portfolio, which continued to rocket upward on the back of Brazil and the EWZ ETF. The race near the top is very close, and if EWZ continues to do well, Caribou has a very real chance of taking the lead.
• Finally, Decision Moose interpreted last week’s debacle as a short-term sell signal and moved into cash, leading to mediocre gains, relatively speaking.

As I hinted above, Caribou will be remaining with EWZ for yet another week. Most assets’ scores have been declining recently, though EWZ continues to command a strong lead. The next-best asset, ILF, isn’t even close for the moment.

Anyway, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
CTCM	2009-04-08	$5.80	$16.08	$16.55	$0.00	+185.34%
QLTI	2009-03-10	$1.44	$3.49	$3.62	$0.00	+151.39%
MSB	2009-03-10	$6.06	$10.00	$10.16	$0.38	+73.80%
HSII	2009-01-22	$16.79	$27.36	$26.99	$0.39	+63.12%
PRGX	2009-04-08	$3.25	$5.18	$5.26	$0.00	+61.85%
ENDP	2009-06-11	$17.59	$22.40	$23.00	$0.00	+30.76%
PTIE	2009-03-10	$3.96	$5.07	$4.97	$0.00	+25.51%
VSNT	2009-05-07	$14.68	$18.44	$18.15	$0.00	+23.64%
GHM	2009-06-11	$13.95	$14.17	$16.70	$0.02	+19.86%
ELNK	2009-04-08	$7.08	$8.10	$8.30	$0.14	+19.29%
KSW	2009-01-22	$2.95	$3.44	$3.40	$0.10	+18.64%
SOLR	2009-07-10	$4.59	$5.25	$5.24	$0.00	+14.18%
UEPS	2009-11-04	$18.25	N/A	$19.35	$0.00	+6.03%
LO	2009-09-09	$73.49	$77.72	$77.65	$0.00	+5.66%
CHKE	2009-05-07	$18.75	$18.93	$18.68	$1.00	+4.96%
DIVX	2009-07-10	$5.02	$4.81	$5.25	$0.00	+4.58%
TSRA	2009-11-04	$21.29	N/A	$22.09	$0.00	+3.76%
CYTK	2009-09-09	$3.21	$3.19	$3.27	$0.00	+1.87%
EME	2009-08-05	$24.30	$23.62	$24.65	$0.00	+1.46%
GNI	2009-08-05	$92.00	$91.00	$90.40	$1.80	+0.22%
MIPS	2009-10-07	$4.15	$3.95	$4.10	$0.00	-1.20%
JCOM	2009-10-07	$22.18	$20.45	$21.82	$0.00	-1.61%
AMED	2009-11-04	$41.51	N/A	$39.96	$0.00	-3.73%
KHD	2009-01-22	$10.17	$9.16	$9.40	$0.00	-7.56%
QCOR	2009-05-07	$4.44	$4.54	$3.94	$0.00	-11.33%
PPD	2009-09-09	$47.50	$39.54	$41.21	$0.00	-13.23%
USMO	2009-08-05	$12.80	$10.90	$10.80	$0.00	-15.62%
GIGM	2009-10-07	$4.77	$4.09	$3.79	$0.00	-20.55%
MTXX	2009-07-10	$5.37	$4.50	$4.14	$0.00	-22.91%
SCMP	2009-06-11	$6.43	$4.37	$4.14	$0.00	-35.61%

Overall, I don’t feel too bad about this week, though I’d like to see stronger performances. Small cap stocks really do seem to behave differently from their large cap brethren, and it’s interesting to watch how the two classes are affected differently in different market conditions. For now, there seems to be a weakness in small caps, though I hope that discontinues, as it would benefit this portfolio greatly.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

Magic Formula: November 2009

Another month has come and gone, which means it’s time for yet another round of Magic Formula stock purchases. This is the monumental tenth time I have gone through this process, which leaves only two more to go before it’ll be time to begin evaluating whether or not to keep the oldest stocks in the portfolio. I’ll cross that bridge when I come it. For the uninitiated, my methodology remains the same: pull the current list of top 30 stocks with a market capitalization of at least $50 million from the Magic Formula website, rank the list according to my own recreation of the formula, and then pick the top three that I don’t already own.

Needless to say, with a portfolio of eighteen stocks, I find that I have to move a bit down the list before I find ones I don’t currently own. In any case, here are my selections for this month:

Net1 UEPS Technologies, Inc. (UEPS)

• Price: $17.78
• Market Cap: $806.821M
• Enterprise Value: $617.806M
• Earnings Yield: 15.234%
• Return on Invested Capital: 945.974%

The early trend in this MFI stock journey was biomedical companies, especially pharmaceuticals. Lately, however, another trend has emerged: technology. UEPS is actually rather interesting, in that they provide an alternative payment system for customers in South Africa. This is certainly an interesting selection, and I’m not sure exactly what to make of it. From a technical standpoint, the stock is rather unimpressive. Trading within a split-adjusted range of $10 to $30 for most of its history, it’s hard to make heads or tails of anything. There is a slight growth trend over the last year, so that could be promising. However, there does not appear to be a dividend.

Tessera Technologies, Inc. (TSRA)

• Price: $21.20
• Market Cap: $1,050.799M
• Enterprise Value: $684.586M
• Earnings Yield: 17.285%
• Return on Invested Capital: 278.887%

Lo and behold, another technology company. TSRA develops miniaturization solutions for electronics manufacturers, which seems to be something to do with designing or helping clients to design semiconductor chips for whatever products they’re producing. It’s probably not a dying business just yet. TSRA’s stock price dropped significantly in early 2008, though they’ve shown some growth in 2009. Yet again, this company does not appear to pay a dividend, which seems to be a common occurrence for MFI stocks. This isn’t necessarily a bad thing, but merely my own commentary.

Amedisys Inc. (AMED)

• Price: $41.25
• Market Cap: $1,153.515M
• Enterprise Value: $1,364.630M
• Earnings Yield: 15.694%
• Return on Invested Capital: 246.112%

Ah, back to the old stomping grounds, sort of. AMED isn’t a pharmaceutical company, but as their name indicates, they are definitely in the medical field. AMED provides hospice-type services to various individuals. This seems to include nursing, physical therapy, and so on. From a technical standpoint, they have shown a strong trend of growth since 2004, though they did suffer significantly during 2008. Like many stocks, this one also seems to pay no dividend.

These new stocks should be added to the Magic Formula portfolio sometime tomorrow. At approximately the same time, I will add $150 of new investment to each of the other virtual portfolios.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

My, That Was Ugly!

You know, it was bad enough when the market (and especially EWZ) plummeted on Wednesday this week. No, that simply wasn’t enough for the great investing gods. On Thursday, the market rocketed upward once again, regaining almost all of the value that had been lost on Wednesday. Unfortunately, this was nothing more than a fake out, as the market once again decided down was the “in” direction, resulting in every portfolio ultimately declining this week. It was a great week to be out of the markets. Unfortunately, my ability to send messages back in time is extraordinarily non-existent.

However, I won’t be at all surprised if the market once again moves upward come Monday. At this point, I kind of hope it hangs around a bit lower for a few days, so that the upcoming $150 investment in each of the virtual portfolios will result in more shares. The only thing I really don’t want is a bear market. Anyway, it may be exceedingly painful, but let’s look at this week’s numbers:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1760.96	$1621.30	-7.93%	+$271.30	+31.84%
TMW	$1647.69	$1576.85	-4.30%	+$226.85	+34.80%
Precious Metals	$1619.49	$1548.44	-4.39%	+$198.44	+44.04%
Decision Moose	$1648.13	$1524.92	-7.48%	+$174.92	+20.54%
Caribou	$1609.81	$1490.49	-7.41%	+$140.49	+18.29%
Berkshire Hathaway	$1499.27	$1483.46	-1.05%	+$133.46	+9.38%

I know, I know. Pick yourself up off the floor. The world hasn’t come to an end just yet.

The chart is becoming awfully clustered as we look to the right side. These nearly vertical lines make things difficult to discern. I will consider reducing the lines in width for next week, as it will probably slightly increase our ability to interpret the chart. Here are some short thoughts about each of the portfolios:

• The only portfolio that didn’t suffer terribly was (perhaps not surprisingly) the Berkshire Hathaway portfolio, which continues its trend of being very neutral, neither moving too far up nor too far down. Weeks like this, it’s hard to complain. I still don’t personally own any BRK-B, but it’s something I’m thinking about.
• Precious metals didn’t have a brilliant week, but that does tell us something about the nature of the decline. It appears to be either a flight into cash or perhaps signs of deflation finally affecting the markets. Now, I’m not sure if the total money supply is experiencing inflation or deflation at the moment, but it’s somewhat fun trying to speculate. Either way, with precious metals down so much, I have a hard time feeling too bad about the rest of the market.
• Speaking of the rest of the market, TMW didn’t do too poorly, all things considered. It’s in the same ball park as the precious metals, which causes a nice flat line in the version of the chart that uses the precious metals index as its basis instead of the U.S. dollar. At some point, I should make that chart available.
• Down at the bottom of the well this week is all three of my favored portfolios. The Magic Formula suffered a tough week, as investors seemed more prone to escape out of small cap companies. Decision Moose and Caribou both suffered as investors also seemed keen to get out of foreign markets. (Other foreign-investing ETFs showed similar losses in the 7% range.) Why U.S. stocks should be strong relative to non-U.S. stocks, I have no idea, with much of what I read suggesting other countries are in better economic shape.

Despite EWZ and its atrocious performance this week, the associated Caribou signal is still up approximately 5%. Caribou will be sticking it out with EWZ for at least another week, with nothing else particularly close in scoring. (The closest alternatives are Decision Moose’s pick, ILF, and our old friend EPP.)

Anyway, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
CTCM	2009-04-08	$5.80	$18.77	$16.08	$0.00	+177.24%
QLTI	2009-03-10	$1.44	$3.47	$3.49	$0.00	+142.36%
MSB	2009-03-10	$6.06	$10.83	$10.00	$0.38	+71.16%
HSII	2009-01-22	$16.79	$25.27	$27.36	$0.39	+65.33%
PRGX	2009-04-08	$3.25	$6.65	$5.18	$0.00	+59.38%
PTIE	2009-03-10	$3.96	$5.51	$5.07	$0.00	+28.03%
ENDP	2009-06-11	$17.59	$23.22	$22.40	$0.00	+27.35%
VSNT	2009-05-07	$14.68	$19.37	$18.44	$0.00	+25.61%
KSW	2009-01-22	$2.95	$3.75	$3.44	$0.10	+19.99%
ELNK	2009-04-08	$7.08	$8.67	$8.10	$0.14	+16.47%
SOLR	2009-07-10	$4.59	$5.57	$5.25	$0.00	+14.40%
CHKE	2009-05-07	$18.75	$20.97	$18.93	$1.00	+6.29%
LO	2009-09-09	$73.49	$79.68	$77.72	$0.00	+5.76%
QCOR	2009-05-07	$4.44	$5.15	$4.54	$0.00	+2.18%
GHM	2009-06-11	$13.95	$16.24	$14.17	$0.02	+1.72%
GNI	2009-08-05	$92.00	$94.46	$91.00	$1.80	+0.87%
CYTK	2009-09-09	$3.21	$4.60	$3.19	$0.00	-0.62%
EME	2009-08-05	$24.30	$23.95	$23.62	$0.00	-2.78%
DIVX	2009-07-10	$5.02	$5.10	$4.81	$0.00	-4.18%
MIPS	2009-10-07	$4.15	$3.79	$3.95	$0.00	-4.82%
JCOM	2009-10-07	$22.18	$21.65	$20.45	$0.00	-7.79%
KHD	2009-01-22	$10.17	$10.45	$9.16	$0.00	-9.92%
GIGM	2009-10-07	$4.77	$4.66	$4.09	$0.00	-14.26%
USMO	2009-08-05	$12.80	$12.92	$10.90	$0.00	-14.84%
MTXX	2009-07-10	$5.37	$5.20	$4.50	$0.00	-16.20%
PPD	2009-09-09	$47.50	$41.68	$39.54	$0.00	-16.75%
SCMP	2009-06-11	$6.43	$5.10	$4.37	$0.00	-32.04%

It was an ugly week in MFI land. The few stocks that were up usually weren’t up by very much, with HSII proving to be a notable exception. The general trend was definitely to go down, down, and down some more. I can only hope the results are better next week.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

A Less Impressive Week

Ah, the continuing saga of “What to Title These Posts” continues. I suppose at some point, I’m going to completely exhaust all of my creativity and will instead opt to name them something simple and succinct such as “Portfolio Comparison: Week of 2009-10-23″. In fact, that probably provides more information to the tentative potential reader. My opening paragraphs sure aren’t helping matters. I should be opening these posts with bold and simple descriptions of the week’s events: “Three portfolios fall as investors hesitate.” Actually, that sounds closer to a newspaper title than an opening paragraph…

All that aside, as you might have guessed, three portfolios were in fact down this week. There wasn’t necessarily any particular reason to this rhyme. Stocks were down on a grander scale, but some portfolios were able to make the best of a mediocre situation, such as my Decision Moose portfolio. Before I get to the details, however, let’s start with the week’s data:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1816.44	$1760.96	-3.05%	+$410.96	+48.18%
Decision Moose	$1609.88	$1648.13	+2.38%	+$298.13	+34.28%
TMW	$1660.78	$1647.69	-0.79%	+$297.69	+43.99%
Precious Metals	$1606.62	$1619.49	+0.08%	+$269.49	+54.31%
Caribou	$1634.71	$1609.81	-1.52%	+$259.81	+31.59%
Berkshire Hathaway	$1493.85	$1499.27	+0.36%	+$149.27	+11.18%

Basically, this week consisted of that drop you see at the end of the graph. Not everything was entirely bad, however, as I’ll expound on in this week’s detail:

• At the bottom of the barrel this week, we find the Magic Formula portfolio, a rare tenant in this position indeed. Given the small market capitalization of most of the stocks in this portfolio, it suggests to me that investors were retreating somewhat to perceived safer investments. Even so, this portfolio has such a lead that a decline means very little in comparison to the others.
• Meanwhile, the precious metals had a very neutral week. In fact, both gold and silver were slightly up.
• Turning our attention back to stocks, we see that TMW, my proxy for the market as a whole, did fall a bit, but not nearly as much as the Magic Formula portfolio did. Meanwhile, Berkshire Hathaway was slightly up. The long-term trend in BRK-B is still one of neutrality, however, as it continues to languish in last place.
• The Caribou portfolio, invested in EWZ (which tracks a Brazilian index), suffered a rather unfortunate loss. You see, early in the week, the Brazilian government announced that it would be levying a tax on foreign investment. I didn’t look into it much deeper to determine exactly what “foreign investment” means (be it investment by Brazilians in foreign markets or investment from abroad in Brazilian companies), but the result was the same regardless: At one point on the day, EWZ was down over 6%. By the end of the day, it managed to claw its way to only being down 3% or so, but the damage was done. Essentially, investors have repriced EWZ to be in line with the expected loss from the new tax.
• Meanwhile, Decision Moose signaled a switch into ILF, a fund which tracks Latin American stocks, which is therefore heavily weighted in Brazil. I executed this switch Tuesday, <em>after</em> the news about the tax, but before the late-day gains. As a result, this portfolio managed to gain handsomely on the week. Sometimes, timing is everything.

Despite the new information about EWZ, Caribou has no plans to change course for the moment, choosing to once again stay with EWZ, at least for another week. Looking at the scoring, there is no immediate rising threat. ILF and EPP remain the other top assets. (Given that Caribou tracks money flow between assets, keeping two obviously correlated ETFs such as EWZ and ILF seems kind of silly, but I randomly made that choice months ago, and I really have no desire to randomly change it now.)

Anyway, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
CTCM	2009-04-08	$5.80	$17.44	$18.77	$0.00	+223.62%
QLTI	2009-03-10	$1.44	$3.98	$3.47	$0.00	+140.97%
PRGX	2009-04-08	$3.25	$6.59	$6.65	$0.00	+104.62%
MSB	2009-03-10	$6.06	$10.95	$10.83	$0.38	+84.85%
HSII	2009-01-22	$16.79	$25.38	$25.27	$0.39	+52.87%
CYTK	2009-09-09	$3.21	$5.13	$4.60	$0.00	+43.30%
PTIE	2009-03-10	$3.96	$5.78	$5.51	$0.00	+39.14%
ENDP	2009-06-11	$17.59	$23.47	$23.22	$0.00	+32.01%
VSNT	2009-05-07	$14.68	$19.12	$19.37	$0.00	+31.95%
KSW	2009-01-22	$2.95	$3.70	$3.75	$0.10	+30.50%
ELNK	2009-04-08	$7.08	$8.55	$8.67	$0.14	+24.52%
SOLR	2009-07-10	$4.59	$5.51	$5.57	$0.00	+21.37%
CHKE	2009-05-07	$18.75	$22.08	$20.97	$1.00	+17.17%
GHM	2009-06-11	$13.95	$17.71	$16.24	$0.02	+16.56%
QCOR	2009-05-07	$4.44	$5.43	$5.15	$0.00	+15.91%
LO	2009-09-09	$73.49	$80.52	$79.68	$0.00	+8.42%
KHD	2009-01-22	$10.17	$10.96	$10.45	$0.00	+2.77%
GNI	2009-08-05	$92.00	$94.00	$94.46	$0.00	+2.67%
DIVX	2009-07-10	$5.02	$5.13	$5.10	$0.00	+1.59%
USMO	2009-08-05	$12.80	$13.10	$12.92	$0.00	+0.94%
EME	2009-08-05	$24.30	$25.13	$23.95	$0.00	-1.42%
GIGM	2009-10-07	$4.77	$4.87	$4.66	$0.00	-2.31%
JCOM	2009-10-07	$22.18	$22.08	$21.65	$0.00	-2.38%
MTXX	2009-07-10	$5.37	$5.56	$5.20	$0.00	-3.17%
MIPS	2009-10-07	$4.15	$4.08	$3.79	$0.00	-8.67%
PPD	2009-09-09	$47.50	$40.94	$41.68	$0.00	-12.25%
SCMP	2009-06-11	$6.43	$5.03	$5.10	$0.00	-20.68%

With a portfolio of this size, the same description can almost be used every week: some stocks were up, and others were down. The actual order from top to bottom barely changed this week, with only a couple of real movers. I borrowed the previous two sentences from last week’s post. Heck, they were even applicable! Keeping track of all these stocks in my head is somewhat difficult. While updating the data, I did notice that PPD has made some progress in a return to parity, but it still has a long way to go.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

Well, It Was Almost a Rocket

I think I need to take a class in writing appropriate titles or something. Well, either that, or I should defer the titling of the post until after I’ve written it. Some of these recent titles just don’t seem to sound as good a day later as they must have when I originally wrote them. In any case, as you may be able to infer from the title, the market was largely up, but a lot of gains were ultimately left on the table after a sobering performance on Friday. Of course, not every portfolio was basking in the green light of capital gains, as the precious metals portfolio did decline slightly.

Now that I’ve attempted to summarize the week in a single, succinct paragraph, I shall instead let the data speak for itself:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1788.36	$1816.44	+1.57%	+$466.44	+56.17%
TMW	$1638.76	$1660.78	+1.34%	+$310.78	+46.95%
Caribou	$1561.73	$1634.71	+4.67%	+$284.71	+35.34%
Decision Moose	$1580.26	$1609.88	+1.87%	+$259.88	+31.06%
Precious Metals	$1617.01	$1606.62	-0.64%	+$256.62	+54.38%
Berkshire Hathaway	$1485.26	$1493.85	+0.58%	+$143.85	+10.94%

You can easily see the recent trends. Of course, in this recent bull market, none of this is unexpected at all. The portfolios will be much more interesting to watch in the event of a return to bear conditions. That said, I’m not particularly hoping for such an occurrence, despite the additional material for analyzing it would give me. Let’s look at the various portfolios in slightly more detail:

• We may as well do something different and start off with the only loser for the week: the precious metals. It wasn’t even a unanimous decision, as gold was slightly up. However, silver was down enough to counterbalance gold’s gains, and the portfolio ultimately ended up in decline. It wasn’t incredibly significant, however, so current holders of precious metals (myself included) shouldn’t be feeling too ill.
• Another lackluster competitor this week was Berkshire Hathaway, which seems to be having trouble getting anything significant going.
• Nonetheless, the market as a whole did reasonably well, with TMW, the Magic Formula, and even Decision Moose pocketing gains between 1 and 2%. Again, the gains would have been better were it not for Friday’s losses.
• Although I seem to use the phrase “big winner” entirely too much, it is only appropriate to describe the Caribou portfolio as such this week, with it ultimately taking home a nearly 5% gain. Currently holding EWZ, we can see that stocks in Brazil have been performing very well in recent weeks. My only concern is for a sudden reversal. I’m not sure I’d call Brazil an emerging market, but I’m sure a lot of the capital invested there is from foreign sources. If the more established markets have a tough week, it could be even worse for EWZ as investors retreat to cash or bonds.

Despite my worries, the Caribou model itself isn’t showing a hint of concern, opting to continue holding EWZ for yet another week. This trade is only three weeks old, but the gain has been over 15% since then. If this continues much longer, a profit latch may trigger. I’m not entirely sure I’m sold on the methodological soundness of this tactic. Sure, if the previously held asset subsequently goes down, you look like a genius. If it continues up, however, you miss out on even more gains. It’s a balancing act, to be sure.

Finally, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
CTCM	2009-04-08	$5.80	$17.60	$17.44	$0.00	+200.69%
QLTI	2009-03-10	$1.44	$3.81	$3.98	$0.00	+176.39%
PRGX	2009-04-08	$3.25	$5.99	$6.59	$0.00	+102.77%
MSB	2009-03-10	$6.06	$10.18	$10.95	$0.38	+86.83%
CYTK	2009-09-09	$3.21	$5.10	$5.13	$0.00	+59.81%
HSII	2009-01-22	$16.79	$23.80	$25.38	$0.39	+53.53%
PTIE	2009-03-10	$3.96	$5.55	$5.78	$0.00	+45.96%
ENDP	2009-06-11	$17.59	$23.82	$23.47	$0.00	+33.43%
VSNT	2009-05-07	$14.68	$18.83	$19.12	$0.00	+30.25%
KSW	2009-01-22	$2.95	$3.79	$3.70	$0.10	+28.80%
GHM	2009-06-11	$13.95	$16.00	$17.71	$0.02	+27.10%
CHKE	2009-05-07	$18.75	$22.70	$22.08	$1.00	+23.09%
ELNK	2009-04-08	$7.08	$8.69	$8.55	$0.14	+22.83%
QCOR	2009-05-07	$4.44	$5.58	$5.43	$0.00	+22.21%
SOLR	2009-07-10	$4.59	$5.71	$5.51	$0.00	+20.06%
LO	2009-09-09	$73.49	$77.79	$80.52	$0.00	+9.57%
KHD	2009-01-22	$10.17	$10.25	$10.96	$0.00	+7.78%
MTXX	2009-07-10	$5.37	$5.66	$5.56	$0.00	+3.54%
EME	2009-08-05	$24.30	$24.88	$25.13	$0.00	+3.44%
USMO	2009-08-05	$12.80	$13.20	$13.10	$0.00	+2.35%
DIVX	2009-07-10	$5.02	$5.27	$5.13	$0.00	+2.19%
GNI	2009-08-05	$92.00	$90.26	$94.00	$0.00	+2.17%
GIGM	2009-10-07	$4.77	$4.84	$4.87	$0.00	+2.10%
JCOM	2009-10-07	$22.18	$22.02	$22.08	$0.00	-0.44%
MIPS	2009-10-07	$4.15	$4.09	$4.08	$0.00	-1.69%
PPD	2009-09-09	$47.50	$42.09	$40.94	$0.00	-13.80%
SCMP	2009-06-11	$6.43	$5.27	$5.03	$0.00	-21.77%

With a portfolio of this size, the same description can almost be used every week: some stocks were up, and others were down. The actual order from top to bottom barely changed this week, with only a couple of real movers. Meanwhile, I’ve been considering the possibility of a different MFI methodology. You could simply hold the so-called top 30 stocks, and then rebalance either monthly or quarterly. I have no idea how well this will do, and it certainly wasn’t the methodology recommended in Greenblatt’s book. It also isn’t necessarily as tax-efficient, I suppose. Just some random ideas going forward.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

Hooray for the Reverse Slide!

Once again, there seems to be something lacking in my understanding of physics. I don’t think it’s possible to have a slide that goes backwards. Well, I suppose you could attach some kind of cable to the intended slider and pull them up the slide. That sounds like a blast for the kids in your life, I suppose. Still, the reverse slide I refer to today is instead the excellent performance of all the virtual portfolios this week. Okay, okay, some weren’t quite as excellent, but I promise there won’t be a shred of red in the first table.

Unfortunately for my desire to keep things simple, I did add new money to each of the portfolios this week, which means the basis has increased yet again. For those of you not keeping score at home, $1,350 has now been invested in each of the portfolios. We only have to go through this capital expansion process three more times, at which point I will simply let the portfolios ride on their own merits. (The process of switching stocks, and especially keeping the values roughly balanced, in the Magic Formula portfolio might prove interesting, but that’s a task for another day.) For now, let’s move right on to the data for the week:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1574.36	$1788.36	+3.83%	+$438.36	+54.64%
TMW	$1419.58	$1638.76	+4.70%	+$288.76	+45.72%
Precious Metals	$1366.59	$1617.01	+7.19%	+$267.10	+57.60%
Decision Moose	$1323.15	$1580.26	+7.66%	+$230.26	+28.63%
Caribou	$1312.54	$1561.73	+7.17%	+$211.73	+28.00%
Berkshire Hathaway	$1326.08	$1485.26	+0.70%	+$135.26	+10.36%

It’s only fitting that the top portfolio in this comparison is represented with green:

In short, it was a good week, especially for three of the portfolios. The pattern I’ve been observing recently has seemingly continued once again. I did look at a graph of the historical P/E ratio, and suddenly had a fit of pause as far as investing in stocks goes, but I suppose I’ll have to take what comes. None of the signals I currently pay attention to are particularly flashing cash as a good option, in any case. Here’s some brief detail about the portfolios:

• First, the precious metals were up significantly. Silver more so than gold, but neither had a bad week by any stretch. Of course, the larger picture here is to examine what this data is telling us. Some of the deflationists out there, especially what I’ve been reading from Mish makes me start to lean toward the possibility of prolonged deflation, or at least spurts of inflation followed by deflation. The fact that gold is rising at the moment suggests inflation, but there are so many other factors in play when it comes to the price of gold that it’s difficult for me to say anything for sure. One thing I know is that consumer prices have not really been going up all that much (if at all) in the past year.
• Despite being invested in entirely different regions of the world, both Decision Moose and Caribou had excellent weeks as well. They are making up some ground, but still have a sizable deficit to erode in order to end up near the top for the year. I do look forward to the year-end comparison.
• Next in the list is TMW. Of course, with the market up on the week, this one is more or less a no-brainer. I’ll leave providing more interesting commentary as an exercise for the reader.
• Strangely, the Magic Formula’s week, despite being good, was near the bottom of the barrel as far as this comparison goes. Of course, one stock in particular sure didn’t pull its weight this week, but more on that in the MFI detail section.
• The true bottom of the barrel this week, however, was Berkshire Hathaway, which barely managed a gain at all, leaving it squarely in last place. Do I think that’s its ultimate fate? I have my concerns about whoever will replace Buffett, but I still think that it’s likely to beat the market over the next few years. Or at least, I’d hope so, especially as I consider investing some real money.

Not surprisingly, a week after switching from EPP back to EWZ, EPP had the better week. However, the difference was fairly minuscule, so I’m not going to let it frustrate me too much. The important lesson to learn here is that when attempting to time the market, especially in shorter time periods, you’re bound to lose now and then. The important thing with a strategy like this remains the long run. In any case, Caribou has no inkling of switching away from EWZ for the moment, with EWZ commanding a strong lead in the scoring.

Finally, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
CTCM	2009-04-08	$5.80	$14.95	$17.60	$0.00	+203.45%
QLTI	2009-03-10	$1.44	$3.85	$3.81	$0.00	+164.58%
PRGX	2009-04-08	$3.25	$5.87	$5.99	$0.00	+84.31%
MSB	2009-03-10	$6.06	$10.00	$10.18	$0.38	+74.13%
CYTK	2009-09-09	$3.21	$4.85	$5.10	$0.00	+58.88%
HSII	2009-01-22	$16.79	$21.88	$23.80	$0.39	+44.12%
PTIE	2009-03-10	$3.96	$5.18	$5.55	$0.00	+40.15%
ENDP	2009-06-11	$17.59	$22.11	$23.82	$0.00	+35.42%
KSW	2009-01-22	$2.95	$3.92	$3.79	$0.10	+31.86%
VSNT	2009-05-07	$14.68	$16.89	$18.83	$0.00	+28.27%
CHKE	2009-05-07	$18.75	$21.78	$22.70	$1.00	+26.40%
QCOR	2009-05-07	$4.44	$5.39	$5.58	$0.00	+25.58%
ELNK	2009-04-08	$7.08	$8.47	$8.69	$0.14	+24.81%
SOLR	2009-07-10	$4.59	$5.28	$5.71	$0.00	+24.42%
GHM	2009-06-11	$13.95	$14.97	$16.00	$0.02	+14.84%
LO	2009-09-09	$73.49	$74.61	$77.79	$0.00	+5.85%
MTXX	2009-07-10	$5.37	$5.43	$5.66	$0.00	+5.40%
DIVX	2009-07-10	$5.02	$5.31	$5.27	$0.00	+4.98%
USMO	2009-08-05	$12.80	$12.51	$13.20	$0.00	+3.13%
EME	2009-08-05	$24.30	$23.94	$24.88	$0.00	+2.41%
GIGM	2009-10-07	$4.77	N/A	$4.84	$0.00	+1.47%
KHD	2009-01-22	$10.17	$9.68	$10.25	$0.00	+0.80%
JCOM	2009-10-07	$22.18	N/A	$22.02	$0.00	-0.71%
MIPS	2009-10-07	$4.15	N/A	$4.09	$0.00	-1.45%
GNI	2009-08-05	$92.00	$91.00	$90.26	$0.00	-1.89%
PPD	2009-09-09	$47.50	$50.04	$42.09	$0.00	-11.38%
SCMP	2009-06-11	$6.43	$5.65	$5.27	$0.00	-18.04%

The big loser this week was PPD, down by an astounding 15.9%. After seeing that, I immediately checked on the cause. Apparently, the SEC may be inquiring into PPD somehow. I am unsure of the details and what it means for the future, but I suppose this is the risk with some MFI stocks. Is the price low because it’s a bargain, or is it low because there’s something wrong with the company I don’t know about? Then again, not knowing is half the fun. (Of course, if I knew I was going to just earn a consistent 50% return every year, I’d take that in a heartbeat. Wish me luck on that one.)

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

Magic Formula: October 2009

It’s now the ninth month during which I will be selecting stocks using the Magic Formula methodology. Starting in late January, I have been adding three stocks each month to the Magic Formula portfolio I include in my weekly comparison. It’s not quite the strategy Greenblatt suggested, as he recommended something like 6-8 stocks per quarter. In any case, I’ve chosen the monthly route for various reasons. (From a numbers standpoint, the best time to make selections might be right after the quarterly earnings reports, but that’s merely supposition, and since these reports are often delayed anyway, there may not be much advantage.)

At least for the moment, my methodology remains the same: pull the current list of top 30 stocks with a market capitalization of at least $50 million from the  Magic Formula website, rank the list according to my own recreation of the formula, and then pick the top three that I don’t already own. It’s relatively simple, mechanical, and prevents me from having to make any emotional decisions. There is probably little advantage to this method rather than simply choosing a random set of three, but as a numbers person, this method appeals to me more. Your mileage may vary.

Anyway, of these top 30 stocks, I seem to already own 15 of them, so I have to move reasonably far down the list. (Nine of my current stocks have fallen off the list, mostly because their prices have risen to points where they’re no longer such a bargain.) Here are my three selections for this month:

MIPS Technologies Inc. (MIPS)

• Price: $3.96
• Market Cap: $178.517M
• Enterprise Value: $155.666M
• Earnings Yield: 13.807%
• Return on Invested Capital: 824.080%

The MIPS name will be familiar to many of you in the computer field, as the producer of both embedded processors and instruction set architectures used both in commercial applications (their processors) as well as in education, teaching programming students assembly language. Chances are, you’ve used something that’s been touched by MIPS, as their processors are used in numerous devices, including DVD players, televisions, laser printers, and video game consoles, including the Playstation 2. After making an IPO in 1998, MIPS became yet another darling of the dot com era, before ultimately declining after the bust. The stock performance over the last five years has been none too impressive, with a persistent, if unsteady decline. There does not appear to be a dividend, so I have my doubts about the future performance of this stock.

GigaMedia Ltd. (GIGM)

• Price: $4.83
• Market Cap: $262.583M
• Enterprise Value: $206.559M
• Earnings Yield: 15.520%
• Return on Invested Capital: 236.775%

Another technology company in what is looking like a round of technology stocks, GIGM provides software and services for various online games, especially in Asia. Looking at the price history, it suffered a catastrophic decline after the dot com bust, but began to show a trend of strong growth in 2006. The trend did start reversing toward the end of 2007, and the current trend appears to be one of neutrality. While they paid a dividend once before, there is no evidence that this is continuing.

j2 Global Communications, Inc. (JCOM)

• Price: $22.19
• Market Cap: $999.926M
• Enterprise Value: $812.812M
• Earnings Yield: 12.881%
• Return on Invested Capital: 632.590%

JCOM offers messaging and other communications services, such as voicemail, e-mail, and call handling around the globe. Barring a decline in 1999-2000, JCOM otherwise shows signs of steady growth. This growth has been somewhat interrupted since late 2007, but how much of that has do with the company itself and how much is resulting from the recent deflation, I have no idea. In any case, there is a rough trend of rising prices so far this year. Unfortunately, this stock also pays no dividend, so any income will have to come from capital gains.

In a nice change of pace, there were no pharmaceutical companies this time around. Of course, instead, I ended up with three technology companies. On the other hand, it isn’t 2000 anymore, so I’m not particularly concerned. These stocks should be added to the virtual portfolio sometime tomorrow, as well as $150 being added to each of the other portfolios.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

The Slide Keeps A-Rollin’

Okay, I admit it. I’m not exactly sure how it is a slide can roll, but sometimes, you just have to go with the first title that comes to mind, regardless of any apparent asininity. I’m sure the title more than conveys my overall message for the week, however, with most portfolios extending their decline from the previous week. It wasn’t exactly a smooth ride down, with most portfolios actually up during mid-week. Unfortunately, Thursday and Friday had other plans, leaving us counting our blessings that it wasn’t worse. (There’s something to be said for over-dramatizing the weekly results. Monthly or quarterly updates just wouldn’t be the same.)

So, with the knowledge that the results aren’t going to be good well in hand, we can immediately turn our eyes to the table and chart:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1590.20	$1574.36	-0.87%	+$374.36	+48.13%
TMW	$1444.72	$1419.58	-1.74%	+$219.58	+37.84%
Precious Metals	$1354.50	$1366.59	+0.89%	+$166.59	+44.42%
Berkshire Hathaway	$1327.48	$1326.08	-0.11%	+$126.08	+9.56%
Decision Moose	$1357.08	$1323.15	-2.50%	+$123.15	+16.49%
Caribou	$1322.90	$1312.54	-0.78%	+$112.54	+16.66%

Attempting to divine some sort of trend from this is becoming increasingly difficult. (It’s also becoming increasingly difficult to hide the fact that I say almost exactly the same things every week.) However, true to my prediction last week, we did have a slight rise from the previous bottom, and then another drop. Here’s hoping for that meteoric rise I subsequently predicted. Until then, however, we may as well take a quick look at what happened this week:

• The precious metals turned out to be a small green spot in what was otherwise a sea of red. Both gold and silver ended up rising on the week, suggesting that this week’s collapse was not entirely deflationary. (I’m not sure inflationary and deflationary effects can really be looked at on such a small time scale anyway, but they don’t call me the confused investor for nothing. Okay, okay, no one actually calls me that. It was a self-selected title.)
• Turning my “analysis” to equities, the best of a bad lot was (surprise, surprise) Berkshire Hathaway. Shares of BRK-B did fall, but just barely. As a result, it was able to move back into fourth place.
• The Magic Formula portfolio tried its best, but it also ultimately declined this week. However, its current position is nothing short of ridiculous, so it will take a bit more than a week like this to unseat it from its first-place crown.
• One of the worst performers this week was TMW. In other words, it wasn’t a great week for the market as a whole. It does give me some solace that most of my other stock-based portfolios all managed to outperform the market. When it comes down to it, that’s what many investors are using as their benchmark, so beating it can be seen as important.
• Before I talk about Caribou, let me first say that Decision Moose, continuing to hold onto EPP, had a miserable week. That same fate very nearly befell the Caribou portfolio, but its recently signaled switch into EWZ helped to save the day.

Of course, Caribou’s switch from EPP back to EWZ was not without some drama of its own. My initial plan going into the week was to wait for the best opportunity to arise, in hopes of recapturing the same number of shares of EWZ that I previously had (before the EPP signal). Things were looking slightly positive on Tuesday, but that rapidly dissipated, with EWZ ultimately outperforming EPP throughout the entire week. In short, there was no good opportunity to switch—only a series of increasingly worse ones. I finally gave up and pulled the trigger sometime Friday morning, which turned out to be not a terrible decision (at least for now). By the end of the day, EWZ had actually risen, while EPP fell. That single day is the difference between Decision Moose and Caribou this week.

Luckily for my sanity, Caribou has decided to stick with EWZ for at least another week. EPP isn’t even really close in the score list at this point, though the rankings can change rather quickly.

Finally, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
QLTI	2009-03-10	$1.44	$3.76	$3.85	$0.00	+167.36%
CTCM	2009-04-08	$5.80	$15.51	$14.95	$0.00	+157.76%
PRGX	2009-04-08	$3.25	$5.31	$5.87	$0.00	+80.62%
MSB	2009-03-10	$6.06	$10.10	$10.00	$0.38	+71.16%
CYTK	2009-09-09	$3.21	$4.98	$4.85	$0.00	+51.09%
KSW	2009-01-22	$2.95	$3.85	$3.92	$0.10	+36.26%
HSII	2009-01-22	$16.79	$23.61	$21.88	$0.39	+32.68%
PTIE	2009-03-10	$3.96	$4.94	$5.18	$0.00	+30.81%
ENDP	2009-06-11	$17.59	$22.14	$22.11	$0.00	+25.70%
CHKE	2009-05-07	$18.75	$22.37	$21.78	$1.00	+21.49%
QCOR	2009-05-07	$4.44	$5.36	$5.39	$0.00	+21.31%
ELNK	2009-04-08	$7.08	$8.41	$8.47	$0.14	+21.70%
VSNT	2009-05-07	$14.68	$19.01	$16.89	$0.00	+15.05%
SOLR	2009-07-10	$4.59	$5.69	$5.28	$0.00	+15.05%
GHM	2009-06-11	$13.95	$13.98	$14.97	$0.02	+7.46%
DIVX	2009-07-10	$5.02	$5.40	$5.31	$0.00	+5.78%
PPD	2009-09-09	$47.50	$51.99	$50.04	$0.00	+5.36%
LO	2009-09-09	$73.49	$72.81	$74.61	$0.00	+1.52%
MTXX	2009-07-10	$5.37	$5.60	$5.43	$0.00	+1.12%
GNI	2009-08-05	$92.00	$93.85	$91.00	$0.00	-1.09%
EME	2009-08-05	$24.30	$24.55	$23.94	$0.00	-1.46%
USMO	2009-08-05	$12.80	$12.66	$12.51	$0.00	-2.26%
KHD	2009-01-22	$10.17	$10.29	$9.68	$0.00	-4.81%
SCMP	2009-06-11	$6.43	$5.80	$5.65	$0.00	-12.13%

A series of dividends was the highlight of this week. I was quite amused by the $0.02 dividend per share that GHM paid out. It won’t do much for my portfolio value, but it was certainly good for a laugh.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

A Bit of a Slide…

I wouldn’t go quite so far as to describe it as a plummet, but it was definitely a slide this past week, with every portfolio in my comparison declining in value. Naturally, this came after mid-week returns made it look like it would be another wonderful week. In a way, it something of a reversal of the previous week’s results, and as a result, we’re more or less where we started two weeks ago. I’ll take that for the moment, I suppose, but I look forward to more skyrocketing in the future.

With no need for a repetitive paragraph about how I never make any changes to the methodology of the comparison, let’s instead move right onto this week’s table and chart:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1616.87	$1590.20	-1.65%	+$390.20	+52.03%
TMW	$1478.75	$1444.72	-2.30%	+$244.72	+42.76%
Decision Moose	$1361.19	$1357.08	-0.30%	+$157.08	+21.45%
Precious Metals	$1405.51	$1354.50	-3.63%	+$154.50	+44.02%
Berkshire Hathaway	$1352.65	$1327.48	-1.86%	+$127.48	+10.01%
Caribou	$1326.91	$1322.90	-0.30%	+$122.90	+18.54%

In a general sense, it’s beginning to look a little bit like another plateau, something like the one we had a few weeks ago. If recent history is any indication, we can expect a slight rise, another drop, and then a meteoric rise to new heights. Of course, I’m not going to put too much stock in random stock movement patterns. Anyway, here’s some detail about what each portfolio did this week:

• The big loser this week was the precious metals portfolio, as gold retreated back to under $1000. Once again, it appears that investors perceive the U.S. dollar as a safe place to put their assets. Of course, there are still a number of people arguing for deflation as the new norm, but I remain unconvinced. For the moment, however, my musings don’t seem to have any measurable impact on the markets. Inflation is bound to resume, it’s only a question of when.
• The second worst portfolio this week was TMW, which didn’t bode well for the market as a whole. Not far behind in the “bad performance” category was Berkshire Hathaway, which (surprise, surprise) also declined on the week. As you might be able to tell, this wasn’t a very good week for stocks either.
• Despite the utter negativity in the stocks realm, the Magic Formula tried to make the best of a bad situation. Even so, it only did slightly better than BRK-B.
• Finally, still in EPP, both Caribou and Decision Moose came very close to at least breaking even on the week. If nothing else, this highlights that non-U.S. stocks had a slightly better week than did their American counterparts. Of course, much of the difference was in the final two days of the week.

Speaking of Caribou, EPP was just unable to make any significant dents this week, and as a result, a switch back into EWZ has been signaled. My primary goal for this switch will be to try to at least get back as many shares of EWZ as I had before, but that’s very possibly going to be a challenge. The ratio between them is still in the same vicinity, so it may yet be possible. The primary thing is simply to be patient. Both ETFs are doing well at the moment, so there’s probably no need to jump the gun.

Finally, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
CTCM	2009-04-08	$5.80	$15.52	$15.51	$0.00	+167.41%
QLTI	2009-03-10	$1.44	$4.30	$3.76	$0.00	+161.11%
MSB	2009-03-10	$6.06	$10.09	$10.10	$0.38	+72.81%
PRGX	2009-04-08	$3.25	$5.35	$5.31	$0.00	+63.38%
CYTK	2009-09-09	$3.21	$4.00	$4.98	$0.00	+55.14%
HSII	2009-01-22	$16.79	$24.01	$23.61	$0.39	+42.98%
KSW	2009-01-22	$2.95	$3.16	$3.85	$0.10	+33.89%
VSNT	2009-05-07	$14.68	$17.47	$19.01	$0.00	+29.50%
ENDP	2009-06-11	$17.59	$22.49	$22.14	$0.00	+25.87%
PTIE	2009-03-10	$3.96	$5.34	$4.94	$0.00	+24.75%
CHKE	2009-05-07	$18.75	$23.42	$22.37	$1.00	+24.64%
SOLR	2009-07-10	$4.59	$5.86	$5.69	$0.00	+23.99%
QCOR	2009-05-07	$4.44	$6.71	$5.36	$0.00	+20.63%
ELNK	2009-04-08	$7.08	$8.69	$8.41	$0.00	+18.87%
PPD	2009-09-09	$47.50	$50.53	$51.99	$0.00	+9.46%
DIVX	2009-07-10	$5.02	$5.89	$5.40	$0.00	+7.57%
MTXX	2009-07-10	$5.37	$5.72	$5.60	$0.00	+4.28%
GNI	2009-08-05	$92.00	$91.00	$93.85	$0.00	+2.01%
KHD	2009-01-22	$10.17	$12.15	$10.29	$0.00	+1.19%
EME	2009-08-05	$24.30	$26.04	$24.55	$0.00	+1.05%
GHM	2009-06-11	$13.95	$14.73	$13.98	$0.00	+0.22%
LO	2009-09-09	$73.49	$75.22	$72.81	$0.00	-0.93%
USMO	2009-08-05	$12.80	$12.20	$12.66	$0.00	-1.09%
SCMP	2009-06-11	$6.43	$4.93	$5.80	$0.00	-9.80%

I don’t know if it means anything, but both of my stocks that start with Q had lousy weeks. There were a few stocks that had good weeks, as well. Unfortunately, when it was all added together, not even the Magic Formula could manage a positive return this week. I’m starting to become quite dissatisfied with attempting to track results weekly. As a result, I’m considering switching to monthly updates. However, that would have two immediate negative consequences: First, this blog would suddenly look a lot less active. I’d have to try to come up with some other content. Second, summarizing a month’s worth of trading is a lot more difficult than summarizing a week’s worth. I guess I’ll have to think about it some…

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.

 

Was That a Mountain, or an Inverted Catenary?

It was an interesting week. The week began where the previous week left off, with prices continuing to soar toward the apparently endless sky. Around midweek, however, the stock market jet engines just didn’t have enough air to push around anymore, and we entered something of a stall. Subsequently, prices began dropping as the week came to close. Not all was lost, however. When all was said and done at the end of the week, every single portfolio had still ended up gaining on the week. So, while those of us who check the market daily veered dangerously near to heart attack territory, the slightly more intelligent out there (who check at most weekly) will feel quite satisfied with the results this week.

Not surprisingly, no changes were made to the comparison this week. Of course, if you have any suggestions for changes, I’m of course open to them. With gold’s continued rise as of late, I’m more tempted to start expressing all the values in terms of my precious metals index, but that’d probably just confuse everyone. As long as the primary currency in the U.S. remains the dollar, I’ll probably stick with that as my base. It’s certainly food for thought, though. In any case, let’s take a look at the table and chart:

Portfolio	Last Week	This Week	% Chg	Total Gain	CAGR
Magic Formula	$1594.86	$1616.87	+1.38%	+$416.87	+57.84%
TMW	$1445.43	$1478.75	+2.31%	+$278.75	+49.45%
Precious Metals	$1393.83	$1405.51	+0.84%	+$205.51	+53.99%
Decision Moose	$1336.52	$1361.19	+1.85%	+$161.19	+22.71%
Berkshire Hathaway	$1325.84	$1352.65	+2.02%	+$152.65	+13.52%
Caribou	$1302.85	$1326.91	+1.85%	+$126.91	+19.68%

As you can tell, the medium-range trend for everything is definitely upward. Well, Berkshire Hathaway is a bit more wishy-washy about things, but at least it’s not plummeting. Here’s the portfolio summary:

• Yet again, the Magic Formula portfolio remains perched atop the list, not yielding to any of its potential competitors. In fact, it’s the only portfolio that has a single-investment CAGR greater than that of the precious metals. In any case, this portfolio continues to outperform. However, I began my excursion into investing right at the beginning of this year’s bull run, and it will be more interesting to see how this methodology ends up faring in a more grizzly atmosphere.
• Also doing reasonable well was TMW. This is completely unsurprising as long as the market remains in bull form. I have no reason to expect this won’t continue, but I wouldn’t be surprise to see it stop, either. My biggest concern about the market as a whole is its price in terms of gold. Some particularly bearish (though right more often than not) commentators have suggested that we may eventually see the Dow fall as low as one ounce of gold. We’re still a far way off from a collapse that impressive, but, I’m not going to write it off entirely either.
• Next in the list is the precious metals. Both silver and gold are performing admirably in recent days, with gold continuing to remain above $1000 per ounce, if only barely. It was much higher mid-week, but the late week retraction destroyed much of those gains.
• Wrapping up my summary (since I can’t think of anything impressive to say about BRK-B this week, is the Caribou and Decision Moose portfolios, both of which are still invested in EPP. Like most stock-based portfolios, these two both gained a bit on the week.

So far, this EPP signal Caribou generated hasn’t been particularly impressive. Since the signal, EWZ (which was the previous holding) has been up 8.92%. Meanwhile, EPP has only been up 6.17%. The disparity is large enough that the top score in the model is once again EWZ. However, the limited whipsaw protection I have built into the Caribou model has ensured that Caribou will be sticking with EPP for at least another week. With any luck, EPP can make up some of this lost ground.

Finally, here’s the MFI portfolio detail:

Stock	Purchase Date	Cost	Last Week	Current	Dividends	Gain
QLTI	2009-03-10	$1.44	$4.28	$4.30	$0.00	+198.61%
CTCM	2009-04-08	$5.80	$17.02	$15.52	$0.00	+167.59%
MSB	2009-03-10	$6.06	$10.03	$10.09	$0.38	+72.65%
PRGX	2009-04-08	$3.25	$5.80	$5.35	$0.00	+64.62%
QCOR	2009-05-07	$4.44	$6.35	$6.71	$0.00	+51.02%
HSII	2009-01-22	$16.79	$26.31	$24.01	$0.39	+45.37%
PTIE	2009-03-10	$3.96	$5.23	$5.34	$0.00	+34.85%
CHKE	2009-05-07	$18.75	$22.03	$23.42	$1.00	+30.24%
ENDP	2009-06-11	$17.59	$22.95	$22.49	$0.00	+27.86%
SOLR	2009-07-10	$4.59	$5.35	$5.86	$0.00	+27.69%
CYTK	2009-09-09	$3.21	$3.34	$4.00	$0.00	+24.61%
ELNK	2009-04-08	$7.08	$8.32	$8.69	$0.00	+22.83%
KHD	2009-01-22	$10.17	$10.31	$12.15	$0.00	+19.48%
VSNT	2009-05-07	$14.68	$16.50	$17.47	$0.00	+19.01%
DIVX	2009-07-10	$5.02	$5.22	$5.89	$0.00	+17.33%
KSW	2009-01-22	$2.95	$3.15	$3.16	$0.10	+10.50%
EME	2009-08-05	$24.30	$25.49	$26.04	$0.00	+7.18%
MTXX	2009-07-10	$5.37	$5.85	$5.72	$0.00	+6.52%
PPD	2009-09-09	$47.50	$48.51	$50.53	$0.00	+6.39%
GHM	2009-06-11	$13.95	$14.10	$14.73	$0.00	+5.59%
LO	2009-09-09	$73.49	$74.80	$75.22	$0.00	+2.35%
GNI	2009-08-05	$92.00	$88.95	$91.00	$0.00	-1.09%
USMO	2009-08-05	$12.80	$12.93	$12.20	$0.00	-4.69%
SCMP	2009-06-11	$6.43	$5.11	$4.93	$0.00	-23.33%

I should have written this paragraph immediately after updating the table. At this point, I don’t even remember what I noticed. Quickly looking over the table, I recall that I once again received a dividend from CHKE. I like dividends, so this makes me happy. Meanwhile, there were some good gains and some losses, but overall, we all know the result. I think I’ve become more interested in the aggregate behavior of the stocks rather than in the individual stocks themselves.

Disclaimer: This post is a description of my own forays into investing, and should not be construed as investment advice or the recommendation of any particular security over any other. Please consult your investment adviser or accountant before making any investment decisions. What’s right for me is very likely to not be right for you.