In Greenblatt We Trust

Most people probably know "A Christmas Story", one of the funniest movies ever made. It is about a boy in Northern Indiana who wants a BB gun for Christmas. Fewer people probably know that "A Christmas Story" is actually an adaptation of a short story by Jean Sheperd from a book titled, "In God We Trust: All Others Pay Cash". A funny book if you get the time. Where am I going with this? Great question, I know you don't have all day. Of course you must have a little spare time, else you wouldn't be surfing the net reading my rambling blog... ok, ok.

One on-going debate about the magic formula investing site ( Magic Formula Investing) is whether JG looks out for our interests by weeding out a few companies that are truly bow-wows, otherwise known as "pigs with lipstick". He clearly says if you do it on your own that you need to toss out companies that have unusual earnings and to watch out for faulty data.

Now I do believe that JG is a good man. He didn't have to write the book. I don't think he wrote it for the royalties, but rather to give the little guy a hand. He is extremely successful and has been charitable with his money. That is nice, but does he have time to view the list and toss the pigs?

Can we put our trust in Greenblatt? Or do we need to be doing our own homework? As you might suspect, I have an opinion. I think JG has automated edits, but that he does not edit the list personally. If he did, I just don't believe WDLA would be on the listola. Why?

1. They are traded on the pink sheets and
   
2. I can't find financials beyond Sept 2005.

Maybe I am totally wrong (it would not be the 1st time). Perhaps WLDA is an up and coming 10 bagger. What do you think? Is JG looking out actively for our best interests?

Here is a quote from the book,

"now imagine deciding enough is enough. You're going to roll up your sleeves and investigate the companies you purchased and the outlook for the businesses you actually own. As we'll find out later. imagine your horror when you realize that if only you had investigated these companies for a few minutes before buying your shares, there is no way you would have touched many of them."

Actually, I have hit that point with MTEX. I googled them (yes, it is a verb) today and blech.

1. They are being sued for invasion of privacy (Mannatech Sued for Fraud)
2. Per this website, founders of MTEX have "questionable pasts". (Mannatech Reviewed)
3. This person calls MTEX a "scam" (Mannatech)
4. This link calls their studies "false". (MLM Survivors Homepage)

Hmm, I guess I need to re-read JG's quote in prior paragraph.

Okay, I am getting off my soapbox now. As always, I am interested in comments.

Justadrone... out! (of words).