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Strategies & Market Trends : Greenblatt's Little Book That Beats The Market -- Ignore unavailable to you. Want to Upgrade?

To: JimLudlow who wrote (15)	12/22/2005 1:08:55 AM
From: Paul Senior	Respond to of 218

Ouch that hurts. Especially since I was a math major. So I'm going to like formulas. Especially if they work. And I'm going to like sampling from quadrants where the best results are found, if past evidence indicates that that's where they are. Now if someone believes they have to judge particular stocks within the quadrant to narrow it down for what they perceive are optimum performance - as Greenblatt seems to do - that's okay. I assume anybody who buys 30 stocks a year with Greenblatt's screen is not going to do a random sample - each of the picks will be selected with SOME care and judgment. Still, that's 30 per year - different from Mr. Buffett's 20 punches of the ticket, and different from his alleged long term buy and hold approach. For me, I try not to take an either-or approach to investing. I'll look for Buffett type stocks, and I'll also use formulas where I believe them to be appropriate.

To: JimLudlow who wrote (15)	12/23/2005 10:53:37 AM
From: LauA	Read Replies (1) \| Respond to of 218

I MUST quarrel with JimLudlow: What do you gain by shooting the messenger, Jim?? When I look over your posting history on SI, I see that you restrict your comments to the 'Spin-off' board and this one. It's obvious that you're a Greenblatt fan. And you said that it took you 4 tries of reading a critique of his formula to understand some flaws. You had called it "the modern equivalent of Graham's net-net"; you tried it and said: "I've been using the method for a month. So far those gains have not been unsatisfactory." Now you diss someone for the same enthusiam!!! Seriously, when you say "I'm sticking with the master", which master are you stuck on? You like spin-offs. Charlie thinks that concept is twattle. He likes high internal rates of return. He likes index funds as a default setting. Isn't the Magic Formula just a way to construct an Index Fund of cheap companies that have a high rate of return on capital? I've found that a bunch of formulae work. My Warren Formula includes buying stuff that he buys, cheaper than he can buy. So it really wasn't very hard to pull the trigger on BUD when it cratered after the Maris litigation settlement was dropped to the bottom line. You knew that BUD had welcomed BRK as a significant shareholder at it's Annual Meeting, yet the 13F didn't show it...and time was running. Then there was WMT. Not a tuffy, either. How about MCO? Charlie had called it an 'inevitable' at the WSC meeting while it was still part of DNB. For my Warren Formula to work, you MasterStickers have to glom on. Thank you for pumping up my portfolio. The Magic Formula just maps out another fishing hole. I'll bet my lunker is bigger than your lunker, but that's for another day. Meanwhile, grab an ice tea, and drop in a line. Lau