Nice post by the good folks at Empirical Finance on testing the Magic Formula and having quite a bit of difficulty replicating it…
In a related note, I was reading a magazine on the plane recently and read a really odd statistic. It referenced another research piece, which referenced another research group. I emailed them, and sure enough they had coded it wrong. The funny thing is, I’ve now seen it replicated about 10 places on the web elsewhere…goes to show you should always take a critical view and question what you read.
(Note: We all make mistakes and I’m focusing less on the error as this group does fantastic work, and more on the way disinformation can spread like wildfire….)
