Thursday, January 1, 2009

2009 brings new beginnings

With the new year, I intend to again start investing following the Magic Formula process. I had previously invested, and still own some stocks, following the strategy outlined in "The Little Book that Beats the Market" by Joel Greenblatt, but with the recent new lows of the Market, it may be a good time to kick start this process again. I plan on following my previous approach of buying a handful (4-6) of stocks every quarter, and selling after a year's time - unless one of those stocks are still on the Magic Formula list. Along with the pure ranking process, I will analyze the initial results set of stocks to try to weed out those that appear on the list due to negative fundamentals which artificially inflate the Earning Yield and/or the Return On Capital.

As there is activity in my portfolio, I will post the latest changes and results to provide visibility into how effective my implementation of this strategy actually is.

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