Karel's Mechanical Fund

[Karel]

Well, perhaps this weeks report answers last weeks question: the fund lost a solid 5%. Perhaps a warning for people who want to start following this strategy.

QHOF: 8.69% (-5.0%)
SPY: 4.45% (-.13%)
POTW: -6.41% (-2.0%)

The POTW gained a point, it is still solidly behind however:13 - 4

The top 3 look rather spectacular: PLXS +4.3%, CELL -3.6%, JOYG -5.45%
The bottom 3 even more so: CRDN -11.4%, JLG -10.7%, SNDK -10.5%

MDR went for a gain of 24.6% in 98 calendar days, bringing the average gain for closed trades to 8.38%, the average holding period to 49 days, for 82% annualized.

SNDK falls off the screen and will be replaced by OVTI.

Regards,

Karel

[Karel]

And this week the Mechanical Fund bounces back 3.1%! Not a complete recovery, but not bad either. When you like a rough ride, that is. SPY gained 1.6%, point for my Mechanical Fund, but the POTW delivered an amazing 4.2%! Way to go, people! Mechanical Fund - POTW : 13 - 5.

QHOF: 16.8% (+3.1%)
SPY: 6.1% (+1.6%)
POTW: -2.5% (+4.2%)

The top 3: JOYG +8.8%, GES + 8.7%, JLG +7.3%
The bottom 3: AMD -7.3%, CRDN -4.1%, LMS +0.1%

SNDK went for a loss, -14.3% in 53 calendar days, bringing the average gain for closed trades to 5.6%, the average holding period becomes 50 days, and the annualized gain 48.7%.

LMS and AMD fall off the screen and will be replaced by DBRN and ITG. Both LMS and AMD are losers, so the average gains will drop even more.

Regards,

Karel

[Karel]

And this week the Mechanical Fund bounces back another 2.1%! I call that a complete recovery! You still need to like a rough ride though, with a fund like this. SPY lost -0.3%, point for my Mechanical Fund, and the POTW, while beating SPY, only gained 0.3%! Mechanical Fund - POTW : 14 - 5. Overall, the POTW is still negative.

QHOF: 19.2% (+2.1%)
SPY: 5.8% (-0.3%)
POTW: -2.2% (+0.3%)

Our top 3: OVTI +10.8%, JLG +4.3%, DBRN 3.4%
Our bottom 3: ITG - 5.1%, RHAT -2.5%, CRDN +2.0% (!)

LMS went for a loss, -25.6% in 98 calendar days, and so did AMD, -16.8% in 27 calendar days, bringing the average gain for closed trades to 0.2% (Yikes!), the average holding period becomes 52 days, and the annualized gain 1.4%. This looks less than impressive. But this screen tries to let the winners run, so getting rid of the losers is not a bad idea. Hopefully the winners don't give back too much before they get sold!

All stocks now in the fund remain on the screen; no changes.

Regards,

Karel

[Karel]

This week the Mechanical Fund lost 0.2%. SPY lost -0.3%, point for my Mechanical Fund, but the POTW gained 2.8%! The newly instated POTW also beat my fund (0.9%). I am resetting the score because of the introduction of the POTW+. The percent scores are total scores, therefore. In points:

POTW: 2
POTW+: 1
MF: 0

Our top 3: OVTI +3.0%, ITG 2.8%, CELL 2.6%
The previous week, OVTI was also in the Top 3! ITG was in the Bottom 3, and recovered a bit.
Our bottom 3: CRDN -8.0%, PLXS -2.5%, RHAT -2.1%
RHAT seems to be in a bit of a downdraft.

CRDN drops from the screen; AMKR is the replacement.

Regards,

Karel

[Karel]

This fund really rocked this week! +2.2% That beats SPY, and both the POTW and the POTW+. Which gives, after week 2:

In points:
POTW: 3
MF: 2
POTW+: 1

In percentages:
MF: 2.6%
POTW: 1.7%
SPY: -0.5%
POTW+: -1.5%

Two weeks is much too short to say anything meaningful, but I have a big smile on my face. Especially since I do almost nothing for this portfolio, apart from looking up a table of tickers, checking which ones are gone, and if one is gone, pick the replacement. All purely automatically, unemotionally, mechanically. Perhaps the fact that this is such a carefree portfolio plays a big part in my smile. But don't forget that this strategy is not a guarantee for success. It also has periods of deep downdrafts.

Top 3: GES + 9.5%, JOYG +7.4% AMKR +5.1%
Bottom 3: RHAT -2.0%, JLG -0.8%, OVTI -0.3%

Last week I mentioned that RHAT seemed to be in a bit of a downdraft. This continues this week. The downdraft is now so prolonged, that RHAT has dropped from the screen. (The screen picks the top 25 stocks on 26 week return from all stocks with a Valueline Timeliness=1 rating. The fund holds 10 stocks.) Or perhaps the rating dropped. Anyway: RHAT goes, and SCSS is the replacement.

To give another idea of the braindead way this portfolio invests: RHAT has topped 30 in the period the fund held it, and now is at 27.43. You'll never sell at a top! Guaranteed! Disappointing, isn't it?

CRDN went for a gain of 10.2% in 140 calendar days, bringing the average for the closed trades to 1.1% in on average 60 days, or 6.9% annualized. We expect these numbers to improve.

Regards,

Karel

[Karel]

Th fund was up +5.2% this week, to beat SPY (+1.9%), the POTW (+3.9%) and the POTW+ (+1.8%). Which gives, after week 4:

In points:
POTW: 6
MF: 4
POTW+: 2

In percentages:
MF: 5.6%
POTW: 4.9%
SPY: 0.7%
POTW+: -0.6%

That big smile is still on my face. Back to my fund (the percentages are over two weeks):

Top 3: AMKR +11.8%, JOYG +10.5%, ITG 10.3%
AMKR and JOYG are on a tear!
Bottom 3: OVTI -2.2%, GES -1.3%, JLG 1.37%
OVTI is floating down a bit.

No changes!

RHAT went for a gain of 11.6% in 147 calendar days, bringing the average for the closed trades to 2.0% in on average 67 days, or 11.2% annualized. That is looking better already, but we still expect these numbers to improve.

Regards,

Karel

[Karel]

The current list, sorted on date bought (yy-mm-dd):

05-11-14 GES
05-11-14 JLG
05-11-14 CELL
06-02-27 JOYG
06-03-06 PLXS
06-03-13 OVTI
06-03-20 DBRN
06-03-20 ITG
06-04-03 AMKR
06-04-10 SCSS

Regards,

Karel

[Karel]

Also picking up the thread here. First a report of the weeks missed:

week ended 4/29:
POTW+ +1.4%, POTW +0.2%, MF +0.1%: 4 - 7 - 4

week ended 5/6:
MF +4.3%, POTW +1.1%, POTW+ +0.5%: 6 - 8 - 4

this week:
MF -5.8%, POTW+ -6.5%, POTW -7.7%: 8 - 8 - 5

In percentages since the (re)start of the competition (3/27):
MF: 3.9%
SPY: -0.7%
POTW: -2.1%
POTW+: -5.2%

The Mechanical Fund, QHOF, is strongly asserting itself!

A top 3 and bottom 3 may be useful to see how hard stocks in a screen like this can get hit:

Top 3: HANS +14.9%, JOYG -2.9%, BGC -4.8% (The second best stock got hit worse than SPY!)
Bottom 3: CELL -20.4%, AMKR -14.9%, OVTI -9.4% (No comment)

No changes! This is mechanical investing: the stocks are still on the screen, so we keep them.

On a sidenote: I am using this screen in my personal portfolio, for a smallish portion of my investment; but I think I am going to switch. I don't know if I will make the same switch for QHOF. On the one hand I like to show picks that I own myself (well, I am holding just 5 instead 10), but on the other hand: I expect the other screen to do even better, and the POTW(+) has a difficult time enough competing against the old screen.

Regards,

Karel

[Karel]

The fund was down -4.5% this week, losing to SPY (-1.7%), the POTW (-1.7%) and the POTW+ (-4.2%). Which gives:

In points:
POTW: 10
MF: 8
POTW+: 6

In percentages:
MF: -0.8%
SPY: -2.4%
POTW: -3.7%
POTW+: -9.2%

All negative.

From my fund these dramatic numbers:
Top 3: CELL +14.8%, HANS 6.1%, DBRN -5.2%!!
Bottom 3: JOYG -19.4%, AMKR -9.4%, CRS -8.6%

No changes in the fund portfolio!

Regards,

Karel

[Karel]

A moderately boring week, with the fund down -0.2% this week, losing to SPY (+1.0%), the POTW+ (+1.1%), but just a bit better than the POTW (-0.3%). Which gives:

In points:
POTW: 10
MF: 9
POTW+: 8

That looks just about equal.

In percentages:
MF: -1.0%
SPY: -1.4%
POTW: -4.0%
POTW+: -8.2%

All negative, and the first position of my Mechanical Fund is being challenged by SPY.

The top 3 from my fund: CRS +3.1%, OVTI +2.6%, JOYG +2.0%
Bottom 3: CELL -6.7%, AMKR -3.7%, SCSS -1.1%
CELL is bouncing up and down, but more down than up, currently.

No changes in the fund portfolio!

Regards,

Karel

[Karel]

Yeehaaaw! The fund gained 3.1% this week, leaving everything else in the dust. Closest remained the POTW (+1.9%), SPY ambled along at +0.5%, and POTW+ actually managed to lose (-0.1%):

In points:
POTW: 11
MF: 11
POTW+: 8

The POTW+ is again dropping away, but the differences are still minor.

In percentages:
MF: +2.0%
SPY: -0.9%
POTW: -2.1%
POTW+: -8.3%

My fund is positive again, and both versions of the POTW are back behind, the POTW+ waaaaay back.

The top 3 from my fund: BGC +13.9%, DBRN +10.1%, AMKR +5.0%
Bottom 3: CELL -7.0%, PLXS -0.1%, HANS +0.6

CELL is bouncing down again, and this time it bounced off the screen, together with JOYG and SCSS. That means replacement time, and next trading day we hope to welcome AEM, GPI, and TTI. Since I also had CELL in my real money portfolio, I'll need a replacement there too. That happens to be AEM.

Last week I also trimmed down my position in HANS. A part got sold for a 20.5% gain in 15 days. Not bad!

Regards,

Karel

[Karel]

What a difference three weeks make! Enthousiastic followers of this (paper!) portfolio, take care. Between April 29 and June 17, the fund lost 15.3%. This week it was up 1.4% again, but the fund is down since the end of March, when it challenged the POTW and the POTW on steroids, "with special K-factor". The results for these three in points are easy: all three scored exactly 13 points. Can you believe it? The percentages show something else:

SPY: -4.4%
POTW: -8.7%
MF: -9.3%
POTW+: -13.0%

After 13 weeks, SPY beats all, the (active players in the) POTW are runners up, my Mechanical Fund tries to follow, and the ten players making up my special K-factor are carrying the red lantern. Hmm.

OK, my fund suffered. But I feel rather smart for selling CELL at 20.91, and shaving the position earlier at 29.35, for an average sell price of 22.15, a gain of 69% in 203 days. I feel less smart about JOYG (-1.6% in 98 days) and SCSS (-13.9% in 56 days), but overall, the results are an improvement on already very nice results. Those results are now on average 10.8% per closed trade, average holding period for closed trades 83 days, for an annualized return of 57%. There are some bad results in the pipeline, however.

Stupid: I forgot to buy TTI (not enough cash to buy it together with the other two). It is still on the list, so I am buying it now. This monday we'll also sell OVTI (a loser) and DBRN (a winner). They'll be replaced by VOL, my current pick in the POTW, and CBK.

Regards,

Karel

[jiesen]

What a difference three weeks make! Enthousiastic followers of this (paper!) portfolio, take care. Between April 29 and June 17, the fund lost 15.3%. This week it was up 1.4% again, but the fund is down since the end of March, when it challenged the POTW and the POTW on steroids, "with special K-factor". The results for these three in points are easy: all three scored exactly 13 points. Can you believe it? The percentages show something else:

SPY: -4.4%
POTW: -8.7%
MF: -9.3%
POTW+: -13.0%

After 13 weeks, SPY beats all, the (active players in the) POTW are runners up, my Mechanical Fund tries to follow, and the ten players making up my special K-factor are carrying the red lantern. Hmm.

OK, my fund suffered. But I feel rather smart for selling CELL at 20.91, and shaving the position earlier at 29.35, for an average sell price of 22.15, a gain of 69% in 203 days. I feel less smart about JOYG (-1.6% in 98 days) and SCSS (-13.9% in 56 days), but overall, the results are an improvement on already very nice results. Those results are now on average 10.8% per closed trade, average holding period for closed trades 83 days, for an annualized return of 57%. There are some bad results in the pipeline, however.

Stupid: I forgot to buy TTI (not enough cash to buy it together with the other two). It is still on the list, so I am buying it now. This monday we'll also sell OVTI (a loser) and DBRN (a winner). They'll be replaced by VOL, my current pick in the POTW, and CBK.

Regards,

Karel

Thanks for crunching the numbers, Karel. It's interesting to know that those who do well for 13 weeks don't necessarily outperform for the next few weeks. Perhaps we like to sit on our laurels after doing well, or a big head makes one weak for picking stocks? Maybe it's just the negative bias in the market, maybe it's luck... maybe it's just too early to tell!

It's interesting though, to be sure.

[Karel]

Catching up! We are still in "take care" territory, as evidenced by the numbers:

SPY: -1.7%
MF: -10.8%
POTW: -14.0%
POTW+: -20.8%

Ouch! Yes, my Mechanical Fund leads the pack, but is down, and way behind SPY. In points there is still not much differentiation: the POTW scored 19 points, the POTW+ and my Mechanical Fund 18 points. The current top scorers making up the POTW+ crew are: Spike, DMK, Diogenes, Gator, Scifos, Gary, Rob, Geri, Alice, and Bosox. Thanks Jiesen, for keeping score!

DBRN was sold June 26 for 24.28, a 6.8% gain in 98 days and OVTI was sold for 21.57, a loss of -13.1% in 105 days. The average result is now 9.5% in 84 days. Not too bad, but there are some big losers currently in the pipeline.

TTI entered the fray at 26.91, CBK at 28.22, and VOL at 46.35.

No changes! No changes, after all this time and with this headwind? You heard it right: no changes!

Regards,

Karel

[Karel]

Not a good week for the fund: -1.6% this week, losing to the POTW (-1.0%), the POTW+ (-0.3%) and SPY (+0.2%). The points:
POTW: 20
POTW+: 20
MF: 18

In percentages:
SPY: -1.5%
MF: -12.2%
POTW: -14.8%
POTW+: -21.0%

This is not a lot of fun to look at. My fund has lost 22% between 5/6 and 7/22.

This weeks top 3: VOL 8.9%, GPI, 4.7%, CRS +4.7%
Bottom 3: GPI -19.1%, HANS -10.1%, AMKR -5.2%

PLXS and AMKR will be replaced by AKAM and ILMN.

Regards,

Karel