Greenblatt says this still makes sense.

I'm not sure if anyone still reads this; however, I came across an update from Joel Greenblatt himself that I thought might be of interest. I'd like to thank Value Investing News for pointing me to Andrew Tobias's site where this quote was found.

This is Joel Greenblatt's response to why the Magic Formula results have been poor so far:

"Each investor who picks 5 or 6 stocks every quarter will have varying results over the short term (meaning a couple of years). However, I gave a class on the results from the large cap model that I reported in the book. During that very successful 18-year period (basically doubling the market’s return), there was a point-to-point 4-year period and a totally non-overlapping 3-year period when the model did not outperform the market averages. That means there were long periods that the model did not beat the market. Yet, looking backward, it is very clear that the strategy (double the market’s return) was a good one. So...what can be learned by one person’s picking a few stocks over a year and a half? Nothing. It either makes sense to buy above average companies at below average prices or it doesn’t. If it does, that still means you need a 3 to 5 year horizon to bear that out."


Yes, I am still following the Magic Formula with awesome results through July of this year and awful results since.