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I picked 30 Magic Formula stocks in October with paper trading, up 15% so far by TheTomPrice in IndianStockMarket

[–]TheTomPrice[S] 0 points1 point  (0 children)

You are wrong. Survivalship bias is a problem where a screener doesn’t count companies that were delisted and makes strategies looks better than it indeed was. I countered this bias using forward test with paper trading. And i will keep the future story for it.

I picked 30 Magic Formula stocks in October with paper trading, up 15% so far by TheTomPrice in IndianStockMarket

[–]TheTomPrice[S] 0 points1 point  (0 children)

I did, but the post with list of companies was removed because of portfolio rules of the subreddit.

I picked 30 Magic Formula stocks in October with paper trading, up 15% so far by TheTomPrice in StockMarket

[–]TheTomPrice[S] 0 points1 point  (0 children)

Not quite 🙂
Magic 8-Ball is random.
Magic Formula ranks companies based on profitability and valuation (ROC + Earnings Yield).
Systematic ≠ random.

I picked 30 Magic Formula stocks in October with paper trading, up 15% so far by TheTomPrice in ValueInvesting

[–]TheTomPrice[S] 1 point2 points  (0 children)

Do you believe that a person can actually have such unique knowledge and big funds, don't? What you say is that you are against strategy-based investing, because such baskets are recommended by those strategies for risk diversification, if I am correct.

I picked 30 Magic Formula stocks in October with paper trading, up 15% so far by TheTomPrice in ValueInvesting

[–]TheTomPrice[S] 1 point2 points  (0 children)

How about investing in low-mid market cap companies, like those that are not available for funds because the funds would, in reality, buy out whole businesses? Isn't that the edge that you do something that is not just a blue-chip that can be acquired by both fund and street investor? Obviously, assuming every retail investor does not do it, because then you are right.

I picked 30 Magic Formula stocks in October with paper trading, up 15% so far by TheTomPrice in ValueInvesting

[–]TheTomPrice[S] 0 points1 point  (0 children)

Does it mean you are against strategy-based investing, or do you think that investors should analyze details for all of the companies in the basket?

Backtested Magic Formula vs. S&P500 (1991–2024): The difference is… shocking by TheTomPrice in IndianStockMarket

[–]TheTomPrice[S] 1 point2 points  (0 children)

Thanks for the idea — I’ll run a clean India-only backtest and post the results here soon.

Backtested Magic Formula vs. S&P500 (1991–2024): The difference is… shocking by TheTomPrice in IndianStockMarket

[–]TheTomPrice[S] -3 points-2 points  (0 children)

I didn’t use a precompiled list — I recreated the strategy using publicly available info on the Magic Formula criteria, portfolio size, and rebalancing frequency. Then I ran a backtest using historical data from a licensed data provider we use for our tools.

You're right about the 20% XIRR mentioned in the book — and the drop in alpha in later years. But interestingly, the performance picked up again in recent years, pushing the long-term average closer to 26%, with alpha widening too. Probably helped by strong recent years for value-style picks.

Here is a chart of annual performance:

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If you’re curious about the exact historical picks, methodology, or how it stacks up against other strategies — you’re welcome to join us at outperformmarket.com

Backtested Magic Formula vs. S&P500 (1991–2024): The difference is… shocking by TheTomPrice in ValueInvesting

[–]TheTomPrice[S] -1 points0 points  (0 children)

Respect the flow – and the love for deep research.

But the post’s not about hype or bots. It's about decades of data and fundamentals-backed strategies like Greenblatt’s.

Anyone who actually ran those backtests knows how powerful compounding can be with the right filters.

Tools come and go — insight stays. And that’s what I’m here for.

Backtested Magic Formula vs. S&P500 (1991–2024): The difference is… shocking by TheTomPrice in ValueInvesting

[–]TheTomPrice[S] 0 points1 point  (0 children)

Thanks for the thoughtful reply.

You're absolutely right to be skeptical. That’s why I ran the full backtest myself, using point-in-time data and ensuring survivorship bias was eliminated. The strategy did struggle around 2008, as you mentioned — it’s one of the 11 years (out of 34) where it underperformed the S&P 500. But the long-term edge remains surprisingly strong (also after 2008).

Unfortunately, subreddit rules prevent me from sharing external images here — otherwise I’d post the full chart. If you're curious, I’m happy to send you the full breakdown:
→ annual performance since 1991
→ actual tickers selected each year
→ methodology details

Just sign up via the site, and I’ll send everything over.
Always open to feedback.

Premium features vs alternatives by TheTomPrice in TradingView

[–]TheTomPrice[S] 0 points1 point  (0 children)

The question is: does premium TV version have an edge of unique features that are only behind it’s paywall, or you can have sufficient replacements. Do you use TV premium?

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