The only other Magic Formula blog that read on a regular basis is MG's justadrone.blogspot.com and I'd like to point to that blog once again. The blog is well written and better proof written than my work and the author has a great sense of humor. However, that is not why I am linking there.
MG has put together about a years worth of MFI data consisting of 276 companies that have appeared on the MFI screen. To my recollection this is the first real analysis of the MFI stock as a whole since Greenblatt published "The Little Book that Beats the Market." MG has shared the database with me and I hope to explore it see if there are any early indicators on ways to improve (or at least not screw-up) the fantastic returns that the back test provided.
Any way here is a link and a quote:
The 276 stocks in aggregate, if you simply bought and held them per the MFI rules, would be up 11.9%. If you implemented the rule to sell when they dropped by 20%, you would only be up 7.3% (and with about the same amount of overall volatility).
I'd also like to take this opportunity to link to Value Investing News so that you can share any great value invsting article that you come across with the rest of the community.
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2 comments:
Thanks for the plug Nick. Quite a few people are taking a look. I bought ALDA today, isn't that one of your stocks?
MG
You're quite welcome! I enjoy reading your blog and I'm sure that yesterday you picked up a couple of extra subscribers!
To answer your question, yes I used to own alda, infact I owned it three times over. I have sold that position. They are headquartered about 5 minutes from my home.
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