3 ms·
I believe that you need to buy about 20-30 of these companies then hold each for about a year, to get long-term capital gains, then reevaluate. Greenblatt claim
by melling 8y ago
I believe that you need to buy about 20-30 of these companies then hold each for about a year, to get long-term capital gains, then reevaluate. Greenblatt claims that statistically this will work.
The Magic Formula:
https://en.m.wikipedia.org/wiki/Magic_formula_investing https://en.m.wikipedia.org/wiki/Magic_formula_investing
Has anyone tried it?
- aaavl2821 8y agoI haven't tried it though I find it intellectually appealing. Actually implementing it requires some config (do you want to include all industries, or exclude some like finance as greenblatt suggests? What range of market caps will you consider? US only or emerging markets? Do you short companies on the bottom of the list or do long only?) I just haven't spent the time thinking through those things...
- MR4D 8y agoThere's a good article on more current results here: https://seekingalpha.com/article/2944796-beating-the-little-book-that-beats-the-market https://seekingalpha.com/article/2944796-beating-the-little-... Short version is that the alpha has shrunk considerably.
- melling 8y agoThe Acquirer’s Multiple is another similar formula: http://acquirersmultiple.com http://acquirersmultiple.com