Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Magic Formula Tracker
Old 06-23-2016, 04:35 PM   #1
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
Magic Formula Tracker

For what it's worth, I'm going to attempt to document how the Joel Goldblatt magic formula does against some benchmarks. The first result will be computed in December of 2019 (that's how long he says you need to wait for it to work).

The idea will be for me to pick six dates, about 2 months apart where I "execute trades". So there will be six groups. The first six of these dates will be buys only, where 1/6th of the eventual seed money will be invested evenly over that month's picks. For the rest of these dates, I will document sells from the prior year and document the new buys. The dates will only be approximately 2 months apart.

If a randomly selected stock is already owned (in any except the current group), it will be skipped, and the next randomly selected stock will be substituted. If a randomly selected stock is already owned and in the current group (to be sold), it will not be sold (be kept for another year).

On each of the buy/sell days, I will document what my random selection of that day's magic formula stocks came up to be, and their prices.

I'll also try to keep track of dividends, splits, buyouts, etc. Not sure how good I'll be at documenting that, but I'll give it a try.

TickerExecuted price Execution date  
CRSPSCVT1653.3806/23/2016 14:15Benchmark
VBR106.6806/23/2016 14:15Benchmark
BKE25.7606/23/2016 14:15June 2016 Pick
HSII17.6606/23/2016 14:15June 2016 Pick
INSY12.9206/23/2016 14:15June 2016 Pick
KFY22.5706/23/2016 14:15June 2016 Pick
MSGN16.8106/23/2016 14:15June 2016 Pick
STRA48.2206/23/2016 14:15June 2016 Pick


See you in a few months!
__________________

__________________
sengsational is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-24-2016, 06:38 AM   #2
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 1,666
Keep us posted!
__________________

__________________
Totoro is offline   Reply With Quote
Old 06-24-2016, 01:34 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 11,772
How are you randomly selecting the stocks

If not with a computer doing random, then I would think there would be bias in the selection some way or another...
__________________
Texas Proud is offline   Reply With Quote
Old 06-26-2016, 06:14 PM   #4
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
Quote:
Originally Posted by Texas Proud View Post
How are you randomly selecting the stocks

If not with a computer doing random, then I would think there would be bias in the selection some way or another...
The screen on magicformulainvesting.com gave me a list of 50 stocks that ranked the highest on Goldblatt's valuation technique. I pasted those into a spreadsheet, typed =Rand() in the adjacent column and sorted the list. So, yes, using a computer and applying a mechanical, repeatable process.
__________________
sengsational is online now   Reply With Quote
Old 08-17-2016, 12:48 PM   #5
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
TickerExecuted price Execution date
CRSPSCVT1705.9908/17/2016 13:20Benchmark
VBR110.0208/17/2016 13:20Benchmark
CALM 42.708/17/2016 13:20August 2016 Pick
DHX 7.1508/17/2016 13:20August 2016 Pick
IQNT 15.3508/17/2016 13:20August 2016 Pick
SYNT 45.208/17/2016 13:20August 2016 Pick
TGNA 21.2708/17/2016 13:20August 2016 Pick
__________________
sengsational is online now   Reply With Quote
Old 08-17-2016, 02:40 PM   #6
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 1,666
Are you recording the prices of your already bought stocks too at this new date?

Might make it easier to compare later on with the benchmark.
__________________
Totoro is offline   Reply With Quote
Old 08-18-2016, 06:15 PM   #7
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
No, I didn't look-up the prices on the earlier batch. Yesterday was kind of an arbitrary day in the life of the earlier batch anyway. I can generate a "brokerage statement" to mark to market on month end, I suppose.

In my spreadsheet for tracking, I'm "buying" the benchmarks with the same amount of cash I used to initiate the position. So I "own" three sets of share counts. I probably will need to use a historical lookup once a year to "reinvest dividends", adding to share counts.
__________________
sengsational is online now   Reply With Quote
Old 09-01-2016, 05:44 PM   #8
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
Typed in the prices today, just for fun. It would be nice if this kept happening!

TickerXIRRGain/Loss
Magic Formula Picks43.3%$1283
US Small Cap Value Index (CRSPSCVT)21.4%$682
Vanguard Small-Cap ETF (VBR)20.9%$667

The gain/loss dollar amount assumes that in the June and August buys, $15K was put into VBR, $15K was put into CRSPSCVT and $15K was split evenly among the magic formula picks.
__________________
sengsational is online now   Reply With Quote
Old 10-06-2016, 01:43 PM   #9
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
TickerExecuted price Execution date
CRSPSCVT1717.3610/06/2016 13:45Benchmark
VBR110.1210/06/2016 13:45Benchmark
CSGS 40.9310/06/2016 13:45October 2016 Pick
KORS 47.4410/06/2016 13:45October 2016 Pick
MPAA 27.9010/06/2016 13:45October 2016 Pick
RGR 56.2810/06/2016 13:45October 2016 Pick
SWHC 25.18910/06/2016 13:45October 2016 Pick

A little early this time since I'm not going to be near the computer when closer to the 2 month interval.

TickerXIRRGain/Loss 10/06/2016
Magic Formula Picks5.3%$326
US Small Cap Value Index (CRSPSCVT)11.1%$675
Vanguard Small-Cap ETF (VBR)8.0%$492
__________________
sengsational is online now   Reply With Quote
Old 10-07-2016, 11:38 AM   #10
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 1,666
That's a big swing
__________________
Totoro is offline   Reply With Quote
Old 10-07-2016, 03:17 PM   #11
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
Yeah. The indexes, with all of their diversity, buffered it well, but my small list of stocks didn't fare as well. I never expected a smooth ride, though. It'll probably see far worse days. Hopefully I've got a lot of years to play with it.
__________________
sengsational is online now   Reply With Quote
Old 12-15-2016, 03:53 PM   #12
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
TickerExecuted price Execution date
CRSPSCVT1905.7912/15/2016 16:00Benchmark
VBR122.1712/15/2016 16:00Benchmark
FPRX 50.4212/15/2016 16:00December 2016 Pick
HPQ 15.4912/15/2016 16:00December 2016 Pick
ICON 9.1912/15/2016 16:00December 2016 Pick
PBI 15.5412/15/2016 16:00December 2016 Pick
SCMP 15.4512/15/2016 16:00December 2016 Pick


TickerXIRRGain/Loss 12/15/2016
Magic Formula Picks24.7%$3430
US Small Cap Value Index (CRSPSCVT)43.0%$5796
Vanguard Small-Cap ETF (VBR)42.9%$5757

Wow. Am I doing this right? Bought VBR on 6/23, 8/17, and 10/6, 139, 136, and 147 shares, respectively, $106.68, $110.02, and $110.12, respectively. Closing today is $122.17.
__________________
sengsational is online now   Reply With Quote
Old 12-15-2016, 04:25 PM   #13
Dryer sheet wannabe
23window's Avatar
 
Join Date: Dec 2015
Posts: 17
Are you annualizing the rate of return instead of calculating the YTD rate of return? The YTD return for VBR is closer to 21%.
__________________
23window is offline   Reply With Quote
Old 12-16-2016, 01:39 PM   #14
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
Quote:
Originally Posted by 23window View Post
Are you annualizing the rate of return instead of calculating the YTD rate of return? The YTD return for VBR is closer to 21%.
Yes, XIRR would be annualized. Still some big numbers. I wish I had every penny in that. Of course 20 20 hindsight. And of course I'm not talking about having all invested on January 1 until today. I'm talking about investing on those three days.
__________________
sengsational is online now   Reply With Quote
Old 12-31-2016, 10:50 AM   #15
Thinks s/he gets paid by the post
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 3,048
These are internal rates of return for buying in June, August, October and December. The earlier bigger XIRR's got watered-down a bit.
TickerXIRRGain/Loss 12/30/2016
Magic Formula Picks15.6%$2588
US Small Cap Value Index (CRSPSCVT)34.5%$5557
Vanguard Small-Cap ETF (VBR)34.4%$5521
__________________

__________________
sengsational is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
The Magic Formula Experiment Totoro Stock Picking and Market Strategy 63 10-10-2016 09:43 AM
What was your magic Number? Was : Survey finds $880,000 is magic number eta2020 FIRE and Money 107 05-04-2015 05:58 PM
Online Stock Tracker Deetso Other topics 2 01-23-2007 07:03 PM
Magic mushrooms are magic Martha Other topics 40 07-18-2006 05:32 PM
Greenblatt's "magic formula" pms163 FIRE and Money 7 01-22-2006 08:34 PM

 

 
All times are GMT -6. The time now is 02:06 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.