Proforma: 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 transactions can be found at https://blippy.github.io/money... As of January 2020, I have adjusted my strategy a little. Instead of selecting stocks from the Greenblatt Screen, I will select them from Stockopedia's Screen Of Screens, and look for a StockRank (TM) in the 90's. I won't rule out selecting something from the Greenblatt Screen, though. With the boilerplate now out the way, let's move on to the actual content ...
This is another lazy post this month. Tclarke (LON:CTO) is due to be kicked out of the portfolio by rotation. However, it does have a StockRank of 96, and it passes the Greenblatt Magic Formula Screen. So I will keep it in.
The portfolio is doing well today, getting a major boost from Dart (LON:DTG) and Norcros (LON:NXR). I estimate that my personal portfolio has underperformed both this portfolio and the FT350, although I haven't run any actual numbers on it. I do own Norcros (LON:NXR) in my personal portfolio. So far it is down 40% since purchase, so clearly I am not a happy bunny.
The MHP has seen a sharper decline and recovery as a result of COVID.
In terms of my own portfolio, I deal on a monthy basis, and use Stockopedia as a way to choose my selections. I don't anything in the way of qualitative analysis these days. I prefer to take a hands-off, lazy approach. I ditched Wincanton (LON:WIN), and bought Stock Spirits (LON:STCK). My approach is to eliminate stocks with a StockRank below 80, and…
