Miner Company
The New Magic Formula: Further Testing And Evolution Of Optimal Model
The Quality Cash-Flow Formula (QCF) model, using ROCE and P/FCF, consistently outperforms the S&P 500 in backtests with a 15% ROCE threshold. Adding complexity—such as revenue growth, debt, dilution, or momentum filters—diminishes returns and consistency; simplicity and quality focus yield superior results.
The Quality Cash-Flow Formula (QCF) model, using ROCE and P/FCF, consistently outperforms the S&P 500 in backtests with a 15% ROCE threshold. Adding complexity—such as revenue growth, debt, dilution, or momentum filters—diminishes returns and consistency; simplicity and quality focus yield superior results.