This blog is intended to serve as a post for my experience using the Magic Formula Index for stock purchase with REAL MONEY. I'm not going to go into details about explaining the formula, I'm going to talk about my performance, and follow the ups and the downs of this unique, steadfast investing style. I do not expect to reach 30-40 percent annualized returns like Greenblat, but I will not accept less than 15%.
I started using the MFI back in June '06. My plan is to purchase equally 6 stocks, 4 times/yr. After a year I will have 24 stocks to keep track of at all times. I will not buy or sell other than these 4 times. If a stock tanks, I'm letting it ride all the way down. I'm not a day-trader, I don't buy and sell stocks for a living. The MFI are the primary stocks that I study and invest in and I'm going by the book.
Also, I do not choose my stocks at random. I try and study the MFI as much as possible and keep my eyes on a stock for a while before I purchase. Hopefully, if I can get the stock at a deep discount, I pounce.
Down to the details. So far I've purchased 18 stocks. 6 in June, 6 in Sept. and 6 in Dec.
June stocks:
BBSI 4.87%
BVF -8.09
DLX 34.16%
MTEX 34.33%
PWEI 13.09%
STX 29.52%
So far these stocks are up almost 17%.
Sept. stocks:
BLDR 8.36%
CLZR .88%
EZEN 56.67%
DK -10.33%
FDG -19.99%
HW -3.29%
These are up around 4.7% mainly because of EZEN.
Dec. stocks:
DGX -3.72%
LRCX -5.44%
OVTI -18.62%
PALM 2.89%
TRLG 10.77%
VTRU 4.93%
I'm down slightly, 0.27% after about a month.
This is my list so far. March I buy my final round of stocks to reach 24. Then is where the real fun begins. I am still not sure how I am going to sell; if I sell 100% of each stock, or sell just the invested money and keep the rest or what.
I will maintain this blog often. I hope that I can gain a lot of collaboration with other MFI buyers. Hopefully this will also be good site for your reference as well.
I look for your feedback. I really think that this can be a formula that works well for a long time.
-T-
