One of the guidelines for constructing your Magic Formula portfolio, as described in The Little Book that Beats the Market, is that each of your 30 stocks should have equal weighting. So after a sale you can’t just invest all the proceeds; you have to calculate how much you should invest in your next Magic Formula stock so the portfolio will be well-balanced. This re-balancing … [Read more...] about Re-balancing your Magic Formula Portfolio
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Stock Spin-off: TEGNA (TGNA) and Cars.com
Another eventuality that must be considered when following the Formula but is not covered in The Little Book that Beats the Market is a Stock Spin-off. This is when a company divests in some part of the company, "spinning off" a separate company that, in this case is publicly-traded and is represented by a different stock symbol. TEGNA shareholders received shares of spun-off … [Read more...] about Stock Spin-off: TEGNA (TGNA) and Cars.com
Why Doesn’t Mr. Greenblatt Run a Magic Formula Fund?
The reason this site exists is because Joel Greenblatt wrote a fascinating book that details a strategy for beating the market. The book captured the imaginations of perhaps millions of investors the world over, and inspired me to report on my experience following the strategy. Any prudent investor, however, before taking the plunge, mostly likely did a quick sanity check to … [Read more...] about Why Doesn’t Mr. Greenblatt Run a Magic Formula Fund?
Managing Your Portfolio. Easy, right?
One of the compelling things about the Magic formula is how well-defined the buying and selling is. Unlike other investment strategies, Magic Formula investing not only gives you a list of stocks to buy, it also details a clear time frame for buying and selling your stocks. "Selling" is in italics because other services make stock picks, but knowing when to sell is often the … [Read more...] about Managing Your Portfolio. Easy, right?
Don’t Just Buy those Stocks!
One of the things I love about the strategy detailed in The Little Book that Beats the Market is that the stocks to buy are chosen based on a specific formula, and Joel Greenblatt, the book's author, has already put together a free site that identifies these stocks for you so you don't even have to run the formula! You get your portfolio designed for you automatically. What … [Read more...] about Don’t Just Buy those Stocks!