저자: BrunoPerini · 외국인
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조엘 그린블랫의 마법공식(EV/EBIT과 ROIC 순위 합산) 소개와 브라질 시장 적용 방법을 설명. 개인투자자는 정보·자원 면에서 불리하지만 장기 관점, 소형주 투자, 독립적 자금 운용 등의 장점이 있다고 주장. 발표자는 자신의 포트폴리오(사네파르, 방코 ABC, 브ラ들레스쿠 등)에 이 공식을 변형해 적용하고 있으며, 공식은 초기 스크리닝 도구일 뿐 맹신하지 말고 추가 기준으로 걸러야 한다고 강조.
다듬은 글
How to select the best stocks to invest in? This question seems complicated, a Herculean task. Even more so when we think about the universe of more than 400 companies here in Brazil. But what if I told you it's a magic formula that gave its creator a 30% annual return for a period of about 20 years, and that this formula mainly takes into account two factors?
That's what we'll talk about in today's video. I'll even show you a ranking of Brazilian stocks according to these principles [Laughs]. Hey everyone, it 's Bruno Perini here, creator of the channel. And before we get into the video, I'll remind you that on January 15th we'll be launching the third class of "Living Off Income Abroad," a course created and designed for you, Brazilian, who is no longer a tax resident here in Brazil.
Brazilians who leave to pay taxes in Brazil usually start accumulating assets but don't quite understand how to invest, don't know which market to use, don't know if investing here in Brazil would be like the taxes. In fact, it's quite complicated; you have to have an account for being domiciled abroad, which isn't the best option by a long shot.
So, this Brazilian was left orphaned because national costs generally focus on the Brazilian tax resident who pays taxes here in our country. Thinking about this, Fábio Fares, monitor of the " Living Off Income" course (more than 10 classes), and I developed this course that will teach you how to invest from anywhere in the world.
You can live in the United States, Europe, Africa, Asia, Oceania, and best of all, you'll understand how taxes work for your specific case. We are opening the third class; in the previous two, we already have students from more than 40 countries – exceptional feedback. That's why we are continuing this project.
Anyone who wants to participate can see all the information here in the link in the bio, including registering on a pre-registration list to be one of the first to enroll. Remember that there are also bonuses for the first registrants. So, you, Brazilian or even foreign (many Portuguese have taken the course), who want to learn how to invest internationally, specifically understanding how taxes work for your case, take a look.
I guarantee you will like it very much; it's a unique proposal. Now, getting to the subject of the video: There's a phrase attributed to Warren Buffett, and I've also seen some people saying that this phrase originally belongs to... The recently deceased partner of Buffett, may God rest his soul, Charlie Manger, stated that investing is simple but not easy.
Indeed, if you think about what investing entails— opening a brokerage account, sending money, opening a home broker, buying a stock— that part usually scares beginners a bit, but then they see that the act itself is super simple. It's simple, but not easy, because let's remember that the investment market is a competition.
"Hey Bruno, but I'm not competing with anyone, just with myself!" Actually, you're wrong. You should at least compete with a benchmark like the Ibovespa. After all, if you consistently lose to the Ibovespa, it's better to buy an ETF if you're going to invest abroad. If you lose to the S&P, and it's common for many people to lose to the S&P, it's extremely difficult to beat the S&P over time.
Even Buffett has lost to the S&P in recent years, it's better to buy an ETF. So, investing is a competition, period. And the better you are in this competition, the more return you get, the better your life will be in the future. And that's an interesting point in this competition because if we think about it...
The individual investor is the weakest link. After all, you are the one with the least information and least specialization. You might be ultra-specialized in your specific profession; you might be the best neurosurgeon in Brazil. So nobody understands more about opening and operating on a brain than you.
However, since you spend hours of your day operating on brains and only look at the market once a week without a Bloomberg terminal in front of you, you are less specialized and have much less information compared to an analyst, a fund manager, or the people who work at a bank or in research. They are also much faster, can use tools, can automate operations, and use algorithms, so it seems you are, in quotes, the dumbest.
Certainly the slowest, and also the one with the fewest tools and resources, so you are the weakest. However, some advantages of the individual investor: Peter Lynch, a mega-manager in the US, achieved the feat of beating the market for 13 years with an average performance of 29.2% per year. You could give Peter Lynch $1,000 in 1977 and by 1990 he would return $2.8 million.
He said... Despite this, individual investors have some advantages, such as the fact that they can invest in small companies that are not investable for very large funds because it would significantly alter the company's share price. They can also invest in more exotic companies because it's difficult for a manager to explain to their investors that they lost money with Uncle Ted's sausage factory.
However, if they lose money with Itaú, the investors won't care, after all, they bought it, and so on. So, individual investors can do things that managers don't dare to do, like I did back when I started trading Bitcoin. Back in 2014 or 2015, if a manager said they liked Bitcoin, they were very poorly regarded by investors who didn't understand anything about the subject.
When I sat in a circle with investors, analysts, and managers and talked about Bitcoin, people looked at me as if I were saying it's possible to use drugs and have a healthy and balanced life, with genuine astonishment. So, because I had nothing to lose with other people's money—after all, the money was only mine—I was able to get involved in this type of initiative, which gave a...
The return is great, plus individual investors have a certain independence of resources since many market professionals use third-party resources. So when the market falls and becomes more attractive, the individual investor can buy more, while the manager, despite understanding that it's the best time to buy more, is forced to sell to return resources to their shareholders.
And lastly, and this is the main point in my opinion, a focus on the long term is crucial, since managers are mainly focused on earning performance fees (those funds that don't all have them), and this fee can be defined by the fund, but generally, they set the performance fee as a semi-annual evaluation.
So, even if the manager understands that it's a very interesting position for the long term, they also have to think about this short-term incentive that will greatly increase their remuneration. Individual investors don't have this semi-annual problem; they can think with a much longer time horizon.
And if you take these advantages of the individual investor and compare them with the disadvantage, which is the fact that professionals in the market generally have more information and know more than we do, if we can overcome this disadvantage and stand out in the competition, then we... We've combined the best of both worlds, and this proposal of a Magic Formula—I say Magic Formula because it's the title of the book created by a professor named Joel Greenblatt.
He's an MBA professor of Finance in the United States, later founded Gotham Capital, and wrote the book "Joe Greenblatt's Magic Formula for Beating the Stock Market." And if the book is small, it could be even shorter. I read it and felt like it could have been 10 pages; he wanted to pad it out a bit because otherwise it wouldn't be a book, it would be an article.
It's based on a very simple premise: he wants to buy above- average companies at below-average prices. And what is an above-average company? That company that manages to generate more profit than others at a price below the market average. So, with these two things in mind, he looks for indicators that can make this simple for the individual investor.
According to the Magic Formula, these indicators would be to see a company's return on investment (ROI), and to see if it's priced below average for the profit it generates, he uses... Earnings held is an indicator you don't easily find in the Brazilian market, but it's the opposite of P/E ratio. Price-to- earnings ratio is the division of the share price by the earnings per share.
Earnings held is the division of earnings by the share price, and then you multiply by 100 to get a percentage. So, for example, if you look at a stock with a P/E ratio of 4, meaning you pay R$4 for the stock for R$1 of profit, its earnings held is that R$1 divided by 4, which gives 0.25 x 100, equals 25%.
In other words, in a period of 4 years, you would recover the price you paid for that stock. That's basically it. However, he refines the arguments a bit more later. So, if you're really going to use the Magic Formula, besides the HOLK ratio, the other indicator he uses isn't the earnings held from P/E ratio; it's based on EV/EBIT.
EV is the so-called enterprise value of a company; it's simply the sum of its market value plus the company's debts minus its cash flow, and he divides that by the EBIT, which would be the company's profit. Before taxes and fees, the cheaper a company is, meaning the lower this Dobit indicator, the higher its Return on Invested Capital (ROI).
You consider both its own capital and third-party capital more attractive, and what does it do? It plugs these two values into a complicated formula. It doesn't simply take the target universe of companies and ranks them first in one column, giving one point to the first, two to the second, three to the third, and so on, for EV bit, and then in another column, giving one point to the first, two to the second, three to the third, and so on, for RK.
It sums these two scores and then takes the 30 winners. So, if a company was first in RK and in 50th position, it was 5th in EV under BI, totaling 51 points. If with these 51 points it was in the universe of the top 30, it would buy that company. It also removes some companies from this universe, for example, due to the fact that it doesn't have an R, banks for example, could not be evaluated according to this criterion.
It also removes, for reasons I couldn't understand in the book, companies responsible for the utilities segment, which are some of the favorites of investors here in Brazil. The electricity and sanitation sectors don't count, according to some people. We should also remove insurance companies, anyway, he removes some names, and to make it easier, you even have websites that already show the top 30 from different markets.
For example, if we want to see the Brazilian market, we have this website here from Quanti Brasil. I found a page from Mic Fórmula; see that it states that banks, electricity, and water and sanitation are excluded, as I had already warned. It also notes that it's common to exclude insurance companies from the list, but they didn't exclude insurance companies in this case.
And if you look, you'll see that he made a ranking of EV Bit and a ranking of RK. In this case, Porto Seguro came in first in both, so it added two points. It would be the first stock on the list. Petrobras Ordinary came in second, Petrobras Preferred came in third, and so on up to the top 30 positions.
Bruno, and you can fully trust Joe Green Blat's technique. If you glance here and look at some companies, you think, "Wow, there are some here that I don't know, that I don't know if they're interesting." Maybe because you do n't know them, they're heavily discounted, those hot stocks of the moment, or there are political reasons for it.
Because they are very cheap, the profits they generate may not be repeated in the future. That's why today you have a high risk, but the market is already anticipating that profitability will decrease in the future, so sell before the price drops. That's precisely why he advocates for allocating the top 30 stocks.
After all, considering allocating only 10%, 20%, 30%, or 40% of your portfolio, there are people who put 100% in stocks. I've never been one of those people and never will be, by the way, because I already have a lot of risk in my business, so I don't want all my money tied up in the market. I do n't think it's prudent.
But if I had 30% of my portfolio in stocks and were to buy those 30 stocks, giving the same weight to each position, notice that I would have 1% of my portfolio in each of the companies. So, even though, for example, we have Lojas Renner in 14th position on the list, even though I think about Lojas Renner, understand that the outlook for it isn't so positive because of the very high competition.
It's difficult to compete with clothing from China. After all, it's not luxury brands that are affected by Chinese competition. They have a branding advantage. Now, if you think of a Renner or a Riachuelo, which target the traditional retail segment and have a larger audience, it's difficult to compete with clothing from abroad, even though the government is now imposing tariffs to try to make the competition a little more equal.
And that's how they do it: instead of lowering taxes for these companies here in Brazil, they don't tax what comes from abroad because the government always wants to collect more; it doesn't want to give up revenue. That's the modus operandi of governments. So, even though I might look at this and be suspicious, let's remember it's about 30% of a stock portfolio according to the Magic Formula.
However, if we think about these excluded segments, we'll see that they might be giving up what Brazil has best, which are banks, energy companies, and sanitation companies, for example. If I look at my portfolio—and for that, I'll access MyProfit, that program I use to consolidate my portfolio and also to help me with my income tax return, looking at the positions I have—if I look at my portfolio—and for that, I'll access MyProfit, that program I use to consolidate my portfolio and also to help me with my income tax return, looking at the positions I have.
I currently have 10 assets. I have two sanitation companies, Sanepar and COPASA. I have two banks, Banco ABC and Bradesco, and three electric companies, Eng Transmissão Paulista and Semig. Of these 10 positions, seven wouldn't fit the criteria of the Magic Formula. Looking at profitability, for example, the position that rose the most in my portfolio was Sanepar, up 70.8%.
Second was Banco ABC with a 32.39% increase, and third was COPASA with 27.86%. These positions are pulling my portfolio's profitability above the Bovespa's profitability. None of the three would fit the Magic Formula criteria. That's why I maintain another spreadsheet adapting these criteria slightly, because I don't want to give up banks, sanitation companies, or electric companies in Brazil.
What I did in this spreadsheet was also change the indicators a bit. For example, banks wouldn't be included because they don't have a Hoik (likely a typo, possibly referring to a specific index or indicator), so I used Hoy (likely referring to a specific index or indicator), and it's a significant change when you do that because, after all, Roy is what evaluates them.
The profitability of invested capital, both from the company itself and from third parties, is the debt they take on. ROI, on the other hand, is the return on equity. So, if a company has a net worth of 1 million and achieves a return of 100,000, then its ROI is 10%. This year, I personally took advantage of buying companies that were trading below their net worth.
So, if I buy a company at 0.9 of its net worth ( the P/BV indicator) and it has a ROI of 10%, well, I have an adjusted ROI in this calculation, right? Because if I bought it at its net worth, it would earn 10%. Since I bought it at a 10% discount, my gain is higher. I would divide that 10 by 0.9, which would give an adjusted ROI of 11.11.
And instead of using EV BIT, I'll use P/E, because in the end, you have a very large debt effect on a company, because it can have a very high EBIT, even a high EBIT. EBIT is earnings before interest, taxes, depreciation, and amortization, but if it has... A company with a lot of debt, as happens in the retail sector, might have a positive EBITDA, but the financial results are terrible because it has to pay a lot of debt interest, and the profit is very small.
So, although it's not the criterion used by John Green, I also see value in using these two criteria. What I did was simply go to one of those websites that measure indicators, download all the companies, and put them in this spreadsheet that's appearing on the screen now. Logically, I excluded companies with a negative P/E ratio because the price can't be negative; if the P/E ratio is negative, then it means it didn't make a profit in the 12-month period.
I also chose companies with a negative risk-free rate because, after all, I want companies that have the capacity to generate profits over time, to invest the capital, and to have positive returns. Some people like to buy companies in turnaround, but that's not really my thesis; I do n't like that very much.
And then I created the two columns and entered the names, ranking them from the first to the last place in this universe of companies, ultimately filtering by removing the companies that are negative and also including... A minimum liquidity criterion to avoid including things you can buy but never sell.
We evaluated about 244 companies. That wasn't exactly it, because I later filtered out the negative companies, so sometimes the number jumps, but in the end, there are about 200 companies here. I put them on the P/E list and the Royalty list, with a ranking for each of these lists. This ranking here refers to P/E and this ranking two refers to Royalty.
When I add the two, I get the result here, so the lower numbers place the companies among the top 30 winners. Then I took the 30 and put them here as the 30 best- scoring. So, for example, Suzano, we can look at it here, came in first, scoring 12 points because it 's seventh in terms of P/E. So, of all the companies evaluated, it's the seventh that would be trading at a lower price relative to the profit it generates.
And in Royalty, it came in fifth, so that's why it scored 12 points. Notice that second place went to Petrobras; it's second in the Royalty list. PL is one of the cheapest companies on the stock exchange in relation to the profit it generates, and Roy was in 12th position, so that's why it totaled 14, and so on.
As I said, that's why Joe Greenblatt advocates buying the top 30 positions because you can look at Petrobras and say, "Wow, it's cheap, but it has a lot of risk," but consider that it will be one out of 30 positions in your portfolio. So you won't have that much exposure, even if you invested only in stocks and nothing else.
What you would have in your portfolio would be a little over 3% in Petrobras. Even if the company went to zero, the loss wouldn't be that great. And let's remember that again, I don't advocate 100% exposure to stocks; I'm much more of a diversified portfolio guy, and that's why I have such a long-running YouTube channel.
There are many people who advocated 100% in stocks, but when the crisis hits, the audience disappears, people go bankrupt, and unfortunately, that's what happens. Then, when the stock market starts booming again, you'll see new channels emerging with the same approach. This is a cyclical thesis, and then they'll hit the rocks again when the market enters a crisis.
On this screen where I put the top 30 best-performing stocks, I highlighted in yellow the companies I currently hold in my portfolio. So, you can see that out of the top 30, Semig is in fifth place, SLC is in 22nd, and Clabin is in 29th. In this case, Clabin is 11th, right? We have other stocks traded on the stock exchange.
And here's something interesting: if I take Cig and SLC and go to MyProfit, you'll see that currently both are positions that are giving me a loss. SLC is a slight loss of less than 3%, and Semig, after the federalization issue that I've already discussed in videos on the channel, is giving me a loss of almost 9%, relative to the average purchase price.
But precisely because the price fell, these companies became more attractive and ended up on this list of the top 30. For anyone who wants to download this spreadsheet, I've put a link in the description. You can go there and download it and get the work done. However, I remind you of the following: I don't think...
It's prudent that you simply trust a Magic Formula, regardless of who created it. Even its profitability, which is quite good, is evident here. Look at Joe Greenblatt's profitability in this graph, where you have several names of heavyweight investors at the top, including Aaron Buffett. It's very, very interesting during the period he maintained his public investments.
However, that market condition may not repeat itself. The formula that worked in a specific American market condition may not be suitable for the Brazilian market. Therefore, use this more as an initial screening so that later you can take these companies and see what fits your thesis or not. You might want companies from a specific sector that aren't heavily indebted, or that have limits on debt.
You might want to exclude commodities because they are very cyclical, and here we see the presence of companies that work with commodities. You might have a preference for a segment you understand better because you work in that area. In short, there are several other selection criteria, so this is just an initial filter.
At least that's how I interpret it, so that you can choose later. The specific names to compose your portfolio, and you can even have far fewer than 30 names, which is what I personally prefer to do in my stock portfolio. I think 30 is too many names, but I also understand the rationale. There are 30 so that you don't have to get bogged down in the details of each company and to facilitate the investment process.
That's what Jo Green advocated in his book. So the question is, do you find Jo Green's criterion interesting? Have you read the book "The Magic Formula"? What's your conclusion? Leave it in the comments. As I always say, just as you learn from me, I also learn from you. And again, I invite you to download the list and see which are the 30 companies.
That's it, folks. I'll stop here. I hope you enjoyed this video. If you liked it, leave a like and subscribe. A big hug and until next time!
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