Always interested as to what works best with the magic formula, I decided to set up a couple of model portfolios over at http://www. marketocracy.com. These model portfolios came about from a) personal observation and b) curiosity. In total there are 5 model portfolios, below is a brief description of each model portfolio and the link to access its public page/performance.
Model Portfolio #1–S10
Inception date: December 06, 2009
This fund purchases any stocks that trade at or below $10. Stocks are chosen from the weekly stocks on the move.
Model Portfolio # 2– Seventeen BioHealth Fund
Inception date: December 21, 2009
The fund focus on health and biotech stocks. The funds idea came from the large quantities of health/bio stocks that appear on the magic formula screen, while I wouldn’t hold a portfolio of these stocks, I was interested whether a portfolio of ONLY these stocks would outperform the market over the long haul.
Model Portfolio # 3– Seventeen Large Cap Fund
Inception date: July 1, 2010
The fund is a bit different. While the others are continuously added as stocks appear in their particular category, this fund bought all the stocks with a market cap of over 5 billion (or 5,000 on the official MFI screen). The portfolio will then be 100% turned over on the same date next year to purchase all the stocks on the same screen the following year.
Model Portfolio # 4– Seventeen 100Fund
This is the model portfolio fund that I am the most interested in. Each week I screen the magic formula stocks and from there I add all new stocks to the fund. I’m interested to see whether by establishing an “index” will allow me to figure out whether magic formula stocks are performing or not.
