Well, I've received several e-mails over the last week asking if I quit after ALDA tanked or simply asking for me to update this. Frankly, I have been doing some soul searching career-wise. I'm bored with my role at the bank and am exploring options outside of my current expertise; this move will come with a paycut and a commitment. I'm far from making a decision but starting very soon I will start studying for the 2007 CFA exam using the older material until the new ones are released. Anyway, I'm sure no-one really care about what is on my mind outside of the Magic Formula even then you probably on care to keep yourself entertained. I though you deserved some explanation...Looking at my results you may feel discouraged; however, I would caution you from making any conclusions as to the success of the model. First, this is a long term methodology and as such we need to wait 3-5yrs before we determine whether we have been successful or not. Please realize that my last 6 MFI purchases, though on the MF list, were a deviation from MFI as Greenblatt intended. Please also realize though my deviation was very profitable immediately (TGIS up 86%) it became a large net loss (as TGIS went back down and ALDA dropped 40%). Despite my futzing with the formula I am not losing money...until you account for inflation. Give it time!
On a much more positive note take a look at my friends MFI picks:
Pretty impressive unfortunately (or fortunately) he has made no further MFI purchases, but he is happy with the results. FYI IVII popped 30% yesterday!Till you harass me for update,
Nick
