The Magic of Simplicity: Joel Greenblatt’s Two-Factor Investment Strategy
Validea
NOVEMBER 16, 2024
In a field where complexity often reigns supreme, Joel Greenblatt’s “Magic Formula” stands out for its remarkable simplicity. Using just two variables to select stocks, this approach has produced impressive returns while challenging conventional wisdom about what it takes to beat the market. The Formula Unveiled At its core, Greenblatt’s Magic Formula combines just two fundamental factors: Return on Capital (ROC): A measure of how efficiently a company uses its assets to
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