The MHP (Magic Hat Portfolio) on Stockopedia (http://www.stockopedia.com/fantasy-funds/magic-hat-463/) is an experiment by me to see if a human can improve on a mechanical Greeblatt Magic Formula screen. I am trying to weed out “mistakes” that I feel the screening commits: unseasoned companies, scams, foreign companies (particularly Chinese), fishy accounting, and statistical quirks. Apart from that, I am agnostic as to the sector the company operates in, although I will try to avoid heavy concentration in any one sector. I will mostly apply “Strategic Ignorance”, by which I mean that I wont try to be clever in my stockpicking. My picking will be mostly mechanical. A summary of most of my Magic Hat articles can be found on the web page http://www.markcarter.me.uk/money/greenblatt.htm This will allow you to see, at a glance, what shares have been bought and sold in the past, as well as what shares have been rejected from consideration and why.
WIN (Wincanton) was due to be ejected from the portfolio. However, since it passes the Greenblatt Screen, it stays in.
Another easy month.
MHP is beating the FTSE350 on a 1-, 2-, 3- and 5- year basis, which is pleasing to see. The out-performance is not meteoric, but it’s nice to see that although the FTSE350 is down 2.7% over 3 years, the portfolio is up 20.1% over that period.