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No. of Recommendations: 5
I realized too late after purchasing my last batch of stocks in August that I made a mistake and bought a stock I normally wouldn’t have purchased. In this case a company undergoing a merger due to limited upside potential. I bought KLA Tencor (KLAC) and didn’t realize that it was in the process of being bought out by Lam Research (LRCX). I also already owned LRCX from a previous tranche. Overall it will probably work out favorably, but it just goes to show that maybe a little bit better due diligence might not be a bad thing.

The returns of my portfolio versus those of several Russell indexes through 30-Sep-2016 are as follows:
Portfolio Inception Date IRR R3000 R2000
Real Money 02-Feb-2006 +10.45% +7.33 +6.56

The following table details performance (IRR) over various time frames through 30-Sep-2016:

Portfolio 7 year 5 year 3 year 1 year
Real Money +14.43 +21.43 +13.25 +10.91
R3000 +13.18 +16.36 +10.44 +14.96
R2000 +12.49 +15.82 +6.71 +15.47

I also have several tracking portfolios that I maintain on Marketocracy as additional 'data points'. These were started on various dates using free data sources available from the internet. These portfolios are rebalanced annually near the date of inception with a small component left as cash to 'pay' expenses. Only portfolios with at least one year of history are included. The annualized returns of these portfolios versus those of several Russell indexes through 30-Sep-2016 are as follows:

Portfolio Inception Date IRR R3000 R2000
MFI 20-Mar-2006 +5.32 +7.21 +6.49
MG1 08-Jan-2012 +10.00 +14.17 +13.02

It should be noted that these tracking funds pay a fee based on the fund size. If I play around and calculate the rate of return numbers and exclude those fees the annualized return are around 2% higher for both funds. Low fees really do matter! As always - caveat emptor.



R3000 and R2000 are the internal rates of return for the Russell3000® and the Russell 2000® Indexes, respectively, over the given time period.

My self-managed account consists of four groups of 10 stocks each that were purchased and spaced out about 3 months apart. The picks are from the MFI website and selected from the top 50 and then run through a list randomizer. The first 10 on the list that I did not previously own are selected for the next cycle. They are rebalanced/shuffled/changed out on their respective anniversaries. I do not continue hold stocks that are still on the list or buy the same stock that is held in the other three cycles.

Marketocracy fund notes:
Only the MFI portfolio uses actual magic formula stocks picked from the website. The MG1 portfolio consists of the 30 highest ranked stocks from M.Gerda who posts about MFI on his blog.
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