Value Investing and The Magic Formula - a method for successful stock investments
With this thesis we want to prove that by using a single formula for picking stocks, Joel Greenblatt’s ‘’Magic Formula’’, it is possible to achieve returns higher than those achieved by a related index. To prove this, we will construct a portfolio, according to “The Magic Formula”, and backtest the portfolio in the Swedish stock market. The test period will be March 1999 to January 2010 and we wil