It's been 2 years since the first picks were posted.
As a reminder, what this thread seeks to test Goldblatt's "Magic Formula" process, as defined in his books "The Little Book that Beats the Market", and "The Little Book that Still Beats the Market".
Starting 2 years ago, stocks from his screen were randomly picked. These random picks continued every 2 months until there were 6 'batches'. Then, as each batch reached the age of one year, it was sold and replaced with other random picks.
So far, I have not proved nor disproved the premise of the books because he claims that it takes at least 3 years and might take 5 years to beat the market with this technique. Also what this thread seeks to test is if, rather than doing it yourself (buying the stocks), could you get the same result by just buying a fund that kind of matches the stocks that his screen picks (I've selected VBR fund and CRSPSCVT index, which have been tracking together very closely).
Below is the current bi-monthly transaction result, and the picks for the next batch.
Results this time show that the small stock benchmarks and the S&P, with around 15% XIRR, beat the picks from a year ago (they got around 10% XIRR). There have sets of picks that were quite disastrous, but this this set has a respectably positive return. The Magic Formula picks still havel a long way to go to catch-up for the entire time span; their return is only about 2/3's of the default S&P 500.
728 Days ending 06/21/2018|XIRR for Jun 2016 batch|XIRR 727 days (all)|gain/loss (all)
Magic Formula Picks|
10.4%
|
11.1%
|
$16246
|
US Small Cap Value Index (CRSPSCVT)|
16.6%
|
14.4%
|
$22838
|
Vanguard Small-Cap ETF (VBR)|
16.6%
|
14.4%
|
$22839
|
Vanguard S&P 500 ETF (VOO)|
15.4%
|
16.3%
|
$25903
|
Ticker|Executed price |Execution date |XIRR|
CRSPSCVT|
2234.46
|06/22/2017 13:25|
16.6%
|Benchmark June 2018 Sale
VBR|
139.12
|06/22/2017 13:25|
16.6%
|Benchmark June 2018 Sale
VOO|
253.54
|06/22/2017 13:25|
15.4%
|Benchmark June 2018 Sale
AMCX|
65.27
|06/22/2017 13:25|
19.6%
|June 2018 Sale
AMN|
60.55
|06/22/2017 13:25|
65.4%
|June 2018 Sale
DLX|
67.58
|06/22/2017 13:25|
-0.7%
|June 2018 Sale
HRB|
23.45
|06/22/2017 13:25|
-22.8%
|June 2018 Sale
NHTC|
23.67
|06/22/2017 13:25|
-8.1%
|June 2018 Sale
ALL|
||
10.4%
|June 2018 Sale
Ticker|Executed price |Execution date |
CRSPSCVT|
2234.46
|06/21/2018 13:30|Benchmark
VBR|
139.12
|06/21/2018 13:30|Benchmark
VOO|
253.54
|06/21/2018 13:30|Benchmark
ACOR|
30.00
|06/21/2018 13:30|June 2018 Picks
IDCC|
83.95
|06/21/2018 13:30|June 2018 Picks
KLAC|
110.27
|06/21/2018 13:30|June 2018 Picks
TUP|
40.89
|06/21/2018 13:30|June 2018 Picks
WDC|
81.83
|06/21/2018 13:30|June 2018 Picks