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 ...
Just Eat Takeaway.com NV (LON:JET)2 (formerly Dart Group) was due to leave the portfolio by rotation. The company has been in the portfolio for years, having been bought in December 2013. It now has a Stockopedia StockRank of only 33, and passes no long stock screens.
MHP is largely a mechanical portfolio, with little in the way of qualitative analysis. I have no idea how Just Eat Takeaway.com NV (LON:JET)2 will perform as we come out of Covid. The CEO of the company strikes me as highly competent, with skin in the game. Airlines are inherently risky businesses, however, and nobody can be certain of anything. Remember Freddy Laker? Maybe the exit of weaker players will create even greater opportunities as we emerge from our current woes. I have no real idea.
JET2 returned 479% since it was bought. If only I could pick those all the time! It's very difficult to know how to play the share game. In principle, I am in favour of LTBH (Long Term Buy and Hold). I like the idea of indolent laziness, and just letting the money compound. It's very difficult to know if one's got the real deal, though. Time and chance happen to…
