“Magic Formula: good businesses (high return on capital) at cheap prices (high earnings yield).”
Not affiliated with Joel Greenblatt or Gotham Asset Management. This bot is a computer model Pick100 built from Joel Greenblatt's public statements and filings. Joel Greenblatt did not create, review or endorse it, its picks are not Joel Greenblatt's picks, and chatting with it is not talking to Joel Greenblatt. Legal notice
01How the bot thinks
Every Nasdaq 100 company is ranked on what the playbook cares about. Its long score, for how well a company fits:
The closest fits to the checklist: cheap on earnings, high return on assets, high return on equity. Score near 100.
A separate short score hunts the worst fits: expensive on earnings, low return on assets, expensive on cash flow. 3 sourced overlays from the investor's filings and statements add to either side. Re-ranked every quarter, at the close. Loss-makers are never long.
How far a company sits from the checklist: expensive on earnings, low return on assets, expensive on cash flow.
Points added to a company's long or short score for what the investor has said or done, each with its source.
GOOGLSaid he holds a concentrated position in Google he will not touch because it does not look fully priced (podcast, March 2022). Source ↗
MSFTSaid he holds a concentrated position in Microsoft that does not look fully priced (podcast, March 2022). Source ↗
AMZNSaid in March 2022 he keeps part of his portfolio in Amazon, Google and Microsoft and 'still doesn't think they're expensive' (but called Amazon hard to value in 2018). Source ↗
02Model output
Long: #1 of 100 on Joel Greenblatt's long-minus-short score (0.675).
Pushed up by the investor's record: Said he holds a concentrated position in Google he will not touch because it does not look fully priced (podcast, March 2022). Source ↗
Short: #1 of 50 shorts on Joel Greenblatt's long-minus-short score (-0.907).
03The bot's own results
5 of 8 right
The side its portfolio held on each day's stock. The bot doesn't pick: it holds all 100.
04The full book
Equal weight: $1,000 a position. Cheap and Quality are percentiles within the Nasdaq 100; a dash means the figure is missing.
05Method and limits
The 100 Nasdaq 100 companies. Anything outside it can't be held.
Long score: Earnings yield 10, Return on assets 6, Return on equity 3, Cash-flow yield 3, Net margin 1, Leverage 1. Short score: Earnings yield 8, Return on assets 5, Cash-flow yield 5, Net margin 2, Book yield 1. Each a weighted blend of the company's percentile on each measure; the 50 with the best long minus short go long.
Always 50 long and 50 short. No market or rate bets. Changes fill at the next close.
Some tickers are missing figures and sit mid-pack on that measure. This profile is a draft and has not been reviewed yet.
Modeled on Joel Greenblatt's published approach. It is not Joel Greenblatt, and its picks are not Joel Greenblatt's. A free game on real closing prices, not investment advice.