I am sitting at my monitor at 11pm on a Friday night searching for investment ideas beyond the Magic Formula, when I stumble across a Motley Fool article by Tom Garner. Tom is one of the founders of the Fool. Anyway, the kid has been asleep in bed for hours but given a title like "Let's Find the Next 60-Bagger" ,I must be the one dreaming- right? Maybe.
Tom's lesson for us isn't about dreaming its about fundamentals and sticking to your guns in the face of 50% drops in Market Capitalization in a short period of time. Take a look at the article, I know a few of you have experienced a significant decline in the price of your pick once if not thrice since following Greenblatt. Personally you know of my experience with ALDA, but I know of at least a dozen MFI stocks that have done this while on and off the list...hold fast and check out the Fool. It might just be part of the 60-Bagger club (60 Bagger returns 60,000%.)
I find it interesting that depending on the time of purchase that one person's worst performing position is another's top performer-even within the same quarter. It really shows you that timing is everything, but don't let that fool you into thinking you can time the market...if you could you wouldn't be reading this or Joel Greenblatt for that matter!
Good Luck and tune in next Friday for my Third Quarter update, hopefully I'll be crushing my benchmark!
-Nick
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3 comments:
Nick, I am starting to compile a list of lessons leaerned from year 1 MFI investing. Near the top of the list is to compile a list of MFI stocks and then watch them. Amongst that list an opportune buying time will come.
Do you still like ALDA?
MG
MG,
Regarding ALDA I have considered purchasing ALDA because I think it is a good value relative to what I paid for it...duh it 50% off now!
What is the opportunity lost if I were to deploy more capital there rather an alternative investment? I'm not so sure that ALDA would be my first choice.
-Nick
As an investment analyst myself I would NOT advice to buy stock at random for the list. I think it is essential to do further screening (lies the origin of the high ROC in a competitive advantage?). Greenblatt's list are in my opinion a greet place to start,
Success in investing
Hendrik Oude Nijhuis
www.magicformulastocks.com
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