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The-Global-Investor is a private client portfolio manger based in London. He also runs his own money, and enjoys doing so, free of the "house view" and risk managers.
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  • Magic Formula Portfolio Performance (One Year Later) 0 comments
    Oct 3, 2012 12:23 PM

    I've had a few people asking how the portfolio I posted in July 2011 performed over the following 12 months.

    Just to recap, the portfolio was picked using a version of the Greenblatt 'Magic Formula' screen. It is global in nature, meaning the MSCI World is probably the best index to use for benchmarking purposes.

    It is an equal weighted 20 stock portfolio.

    The screenshot below shows the figures.

    All figures are over the 12 month period.

    The full performance picture is on my blog.

    The main points are:

    In the 12 month period, the portfolio is up 6.48%

    It outperformed all major equity indices.

    The only index that came close in performance was the S&P 500.

    It's a global portfolio and yet beat the global index (the MSCI World) by 13.2%, despite being underweight US equities (the best performing market).

    With just a bit of stock selection (to avoid value traps), one could potentially have missed out Netflix and missed out on the 3.78% negative contribution.

    All in all, it's a good example of how this simple stock screen works. I'll post more examples in the future.

    A private investor could use this screen for their equity allocation and beat most professional investors.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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