Time for an update on my Fantasy Fund at https://www.stockopedia.com/fa... It's aim is to see whether some judicious selecting from the Greenblatt Screen can outperform it. Since inception, the Greenblatt screen is up 86%, convincingly outperforming its Footsie benchmark. The MHP (Magic Hat Portfolio) has done even better: up 161% over the same period.

I count that as "pretty good going." Factors which I think could be attributed to the outperformance are:

  • Pure blind luck - which you can never discount.
  • Outperformance of value strategies in general. I am going to downplay that as a possible factor. Growth and momentum seem to have been dominant factors in producing returns over the last few years. The fact that a value strategy has done so well is particularly encouraging
  • Dubious quality of some of the Greenblatt candidates. My own view is that this is likely to be significant. Some of the shares it selected were  scams, both Chinese and otherwise. The Greenblatt screen has done well despite this. On the basis of the results it is reasonable to conclude that having a human at the helm to weed them out is helpful
  • Lucky (skillful?) decision of sticking with Dart (LON:DTG). It has been in the portfolio since December 2014. Despite disappearing from the Greenblatt screen, I thought that it exhibited sufficiently good value and quality characteristics to warrant its continued inclusion in the portfolio.  It is up 572% since purchase. Without doing the maths, it could have been the single greatest factor in the portfolio's performance. So, again, it could be that one lucky decision has led to most of the return.

You may recall that I decided to cut back on Dart (LON:DTG) at the beginning of December for risk purposes. I sold a large chunk, and the cash pile in the portfolio is the largest it is ever likely to have been. In retrospect this was a particularly boneheaded move on my part as the market, include Dart, produced spectacular returns during December. Inspired.

Euromoney Institutional Investor (LON:ERM) is ejected from the portfolio today by rotation. It has been up 8% since holding, thereby underperforming the market. Stockopedia classifies it as a Falling Star, with a StockRank of 40, and no screens passed. It is on a PE of 16. So there's no…

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