Magic calculator for stocks full#
Magic calculator for stocks free#

Q: How long does it take for this system to work?Ī: Financial markets are never predictable in the short-term therefore we strongly recommend that you dedicate at least three years to this system. Make sure you are using a very low-cost discount broker. Q: Couldn't buying and selling 20-30 stocks each year get quite expensive?Ī: Yes, especially if you are investing small amounts of capital. listed stocks in the future?Ī: Value investing should be an effective investment strategy outside of the U.S., but we do not currently have plans to open the Magic Formula system to non-U.S. listed equities, and we do not include financial industry stocks or utilities due to the unique nature of their financial accounting statements. Q: Are all stocks included in the stock screener database?Ī: The database only contains U.S.

The financial data is updated quarterly when we receive the information from our data provider. We then make some slight accounting adjustments to these commonly used ratios in order to be more accurate for comparison purposes across various companies.Ī: Typically the price data is updated every trading day at approximately 8:00 AM. In the case of the Magic Formula system, we are screening for stocks with low P/E ratios ('cheap stocks') that also achieve high returns on capital ('good companies'). Over the last 30+ years we have seen many studies that demonstrate that 'value' strategies-such as buying stocks with low price/earnings (P/E) ratios can outperform the market averages. Q: How does the Magic Formula stock screener choose stocks?Ī: First, there is nothing 'magical' about the formula. Q: If I want to add more money to my portfolio in three months, should I screen for a new list of stocks?Ī: Yes, you would want to use the most current list of top-ranked stocks for the best results.

Magic calculator for stocks full#

Q: If I purchase a stock from the top-ranked list of stocks and it is no longer on the list several weeks later, what should I do?Ī: The Magic Formula system assumes you will continue to hold the stock for a full year. Q: How should I decide how many shares to buy of each selected stock?Ī: The Magic Formula system is based on buying equal dollar amounts of each stock. Sometimes a previously owned stock will remain on the list and then you must decide if you want to continue to hold this stock. After the one year period you should screen for new stocks and establish a new portfolio based on the most current financial statements and stock prices. Including at least 20-30 of these stocks should help with diversification.Ī: The Magic Formula system was designed to hold stocks for approximately one year in order to maximize your after-tax return. Q: How do I choose among the top-ranked companies from the stock screener results?Ī: Statistically it does not matter which of our top-ranked companies you choose to invest in, since you are already choosing from the top few percentiles of stocks. In an effort to reduce volatility, it may be best to choose companies with larger market capitalizations (over $1 billion). Our data shows that, large companies tend to be less volatile than small companies. Q: How do I choose the minimum size of a company based on its total market capitalization?Ī: A company's market capitalization is a calculation based on multiplying the number of total outstanding shares for the company, times the current share price. Of course, as in any portfolio, choosing more stocks will probably reduce its volatility over the long-run. Q: How should I decide how many stocks to choose from the given database?Ī: In our view, you should maintain at least 20 Magic Formula securities.

Magic calculator for stocks free#

A: The website was built to give everyone the ability to use a free and simple stock screening tool to select Magic Formula stocks, as described in Joel Greenblatt's book The Little Book That Beats the Market.