#88 - MAGIC FORMULA INVESTING STRATEGY FOR BEGINNERS

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Timestamps:

Intro: 00:00

What is it?: 00:23

How does it work?: 01:01

Pros and Cons: 02:17

Website and Portfolio: 03:16

When to use it?: 05:18

Links:

Website: https://www.magicformulainvesting.com/ 

Portfolio Tracker Sheet: https://docs.google.com/spreadsheets/d/1Lu4JEYlbfI-4TnywfQYGVAimBEqMpCPZJZu0-AWF6Q8/edit#gid=726394198

Description:

Magic formula investing refers to a rules-based, disciplined investment strategy that will teach you a relatively simple and easy-to-understand method for value investing.

A backtest of market performance between 2003 and 2015 found that the magic formula strategy had annualized returns of 11.4%, compared with 8.7% from the S&P500.

Put simply, it works by ranking stocks based on their price and returns on capital.

Developed by Joel Greenblatt—an investor, hedge fund manager, and business professor—the formula applies to large-cap stocks. He has provided a lot more detail in the book “The Little Book That Beats The Market”

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Hosts:

Atit Kothari: https://kothariatit.com/

Tapan Desai: https://tapandesai.com/

Atit’s Newsletter: https://atitkothari.substack.com/

Tapan’s Newsletter: https://tapandesai.substack.com/

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Disclaimer:

The information in this video is general information only and should not be taken as constituting professional advice from Atit or Tapan. Atit and Tapan are not financial advisers. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Atit or Tapan are not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this video.

Outro Music: Mayur Jumani (https://www.youtube.com/channel/UCVUkpUN-Lufq407fUEX2wJQ)

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