Greenblatt's Gotham Capital ran concentrated bets in special situations. Totally different than the Little Book he wrote, which says retail investors can outperform over the long run by buying a huge basket of stocks with high earnings yields, and rebalance periodically. Not disagreeing. Just sayin'... Thank you, and as always, keep up the good work!
On the other hand, The Magic Formulas has proven to work. The issue/hard thing is to blindly follow an algorithm. It’s very hard to pursue when the strategy temporarily underperforms. :)
Facts! The great thing about Magic Formula is it doesn't require analysis. Sure, most of the companies are cheap for a reason, and will never recover. But enough of them will rebound that over time that the strategy will likely outperform. Assuming one strictly follows the formula, buying the entire basket, and rebalancing!
Is Intuitive Surgical a good example of a boring company? Just feels like it might not be..
It's an amazing business. The only thing I don't like about the company is the current valuation level. :)
Good
Greenblatt's Gotham Capital ran concentrated bets in special situations. Totally different than the Little Book he wrote, which says retail investors can outperform over the long run by buying a huge basket of stocks with high earnings yields, and rebalance periodically. Not disagreeing. Just sayin'... Thank you, and as always, keep up the good work!
Correct, Mark!
On the other hand, The Magic Formulas has proven to work. The issue/hard thing is to blindly follow an algorithm. It’s very hard to pursue when the strategy temporarily underperforms. :)
Facts! The great thing about Magic Formula is it doesn't require analysis. Sure, most of the companies are cheap for a reason, and will never recover. But enough of them will rebound that over time that the strategy will likely outperform. Assuming one strictly follows the formula, buying the entire basket, and rebalancing!