Oh, hi! As the holidays approach, take a break to laugh at my misfortune. The good news is the Magic Formula Portfolio makes up only a small part of my overall portfolio, which is still mainly Vanguard Index Funds and individual stocks that pay dividends. Those investments have done well. The bad news is that this “Magic Formula Experience”, which was supposed to make me rich, is turning out to be a slow-motion train wreck. Here is the latest update:
Well, at least the portfolio has gone up a few thousand dollars since the last update. But I’ve still lost over five thousand dollars on this scheme, whereas if I just would have socked away that 60 grand in the S&P 500 index I would have profited over 18 thousand dollars – around a 31% return on my initial investment.
And because of the stickiness of Magic Formula Stocks and my desire to not just keep the same 30 stocks for five years, I picked a stock that I never would have invested in: BPT. And that was a big mistake – except that it wasn’t. Following the Magic Formula means not second-guessing it. Otherwise I wouldn’t be following the formula. Kind of like counting cards requires the Blackjack player to make tell-tale moves that a traditional player would never make. Soon it will be time to start another round of trades…
Also note that Weight Watchers changed its symbol from WTW to WW.
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