Magic Formula Investing

Magic formula investing is a term referring to an investment technique outlined by Joel Greenblatt that uses the principles of value investing.

Greenblatt suggests purchasing 30 "good companies": cheap stocks with a high earnings yield and a high return on capital. He touts the success of his magic formula in his book 'The Little Book that Beats the Market', Joel Greenblatt ISBN , citing that it does in fact beat the S&P 500 96% of the time, and has averaged a 17-year annual return of 30.8%

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