ValuePickr Forum

Dataset Request for Backtesting Magic Formula

@Ahmed_Madha yes. I saw that. Your backtest has provided more confidence in trying magic formula for myself.

Thank you very much!

After the Magic formula, i read the book called Acquirer’s Multiple. It claims to outperform even the Magic formula.

As per the author of Acquirer’s Multiple book, Just owning a basket of stocks based on Earnings yield Rank instead of ROCE + Earnings Yield Rank provides better results. He backtested it in US market till 2017 with much success.

Incase you want to extend your study/backtest further.

With your exceptional report and backtesting on magic formula in Indian market, you already have the data to test the Acquirer’s multiple as well. It would be really interesting to see how it performs.

Name of the book i am referring to : Acquirer’s multiple by Tobias E. Carlisle

If you do choose to backtest it, please do let us know how it performs. Happy investing!

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Hi Nikunj,

I have backtested the data based only on the earnings yield too (just a rough exercise). Results were much inferior to Magic Formula. (I guess mainly because of cos. look optically cheap in India due to Corporate Governance Issues)

I guess only earnings yield as a factor should work well for Large Caps in India.

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