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Magic Formula, is that the guy form Morningstar ?

Magic Formula investing is the brainchild of Joel Greenblatt, which he laid out in The Little Book That Beats the Market. He essentially uses a formula that relies upon earnings yield (the inverse of P/E) and return on invested capital to find companies that are poised to move higher in price. It's a mechanical investing program that suggests buying companies that pass the screen and holding them for a year plus one day (to get better capital gains tax treatment). His research shows a pretty solid record, though that appears to be if one bought every stock that passed the screen (at least that's my thought).

There is a Magic Formula website where you can run the screen:

and a Magic Formula board:

Hope that helps,

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