dsp444 (79.58)

Magic Formula Investing picks September 2010

October 01, 2010 – Comments (2) | RELATED TICKERS: AGX , SNDK , FLL

I started with using Joel Greenblatt's Magic Formula in Jan 2008.  Approaching 3 full years of investing using the formula with real money.

I am selling the following stocks this month after owning them for 1 full year.  This group of 5 stocks returned -16% together, while the S&P 500 returned +15% over the same period.  This has easily been the worst performing (vs the S&P 500) group of stocks I have picked.  (Note that I compare to the S&P 500 simply because that is my most likely investment alternative).

GTLS: returned -12.5%

ENDP: returned +27.4%

GIGM: returned -57.6%

PRIM: returned -7.9%

CEU: returned -28.9%

I used the magic formula screen to looked for the best 30 companies with a market cap over $50 million.  I need to find 5 stocks to purchase.

I already have the following stocks which were on the screen in my portfolio: BDSI, FRX, SOLR, IDCC, JGBO, MRX, SNTS, SMED so I am not going to buy those.  That leaves 22 to choose from.

Several of these I have commented and picked in CAPS in the past, but there are a couple of newbies.  I chose to purchase AGX, FLL, IPXL, OSK, and SNDK with my real money portfolio.  Rationale for their selection is in my CAPS comments for each stock.  I will red or green thumb other magic formula stocks as far as I can tell they should be rated, but I am actually only purchasing these 5.