The Magic Formula Investing (MFI) strategy incorporates the teachings of the famous investor and economist Benjamin Graham. Warren Buffet also uses Graham’s models for investing. Their theory is find good companies, and buy them cheap.
This sounds easy enough, but what determines good and cheap. Greenblatt has developed a screener that assists in buying good, cheap stocks. Greenblatt’s strategy picks companies that maximize their return on capital. He also bases his picks on the earnings yield.
The economy has tanked, and stock portfolios have taken a beating. However, by using Magic Formula Investing, portfolios will soar once again. Joel Greenblatt designed the market investment strategy. He has developed a stock screener to pick winning stocks every time.
Greenblatt’s credentials are impeccable. He graduated from the Wharton School of Business. He earned both his B.S. and M.B.A. from there. He currently teaches at the Colombia University Graduate School of Business. As an investor, he founded and manages the Gotham Capital hedge fund.
To learn more about his investment strategy, read his book, “The Little Book that Beats the Market.” It was first published in 2005 with a newer edition available for preorder. This book explains his theory in detail, and puts the strategy in terms that everyone can understand.
Magic Formula Investing also appears on the web site, magicformulainvesting.com. It utilizes a stock screener and other investment tools to aid in rebuilding portfolios. It also has interviews and news articles related to MFI, and a newsletter by Joel Greenblatt. The website provides information about his book, and gives advise on using the system.
The economy shows some signs of improving. It is time to jump back in the market, and let money go to work once again. MFI provides a stock screener based on economic data that has worked in the past.
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