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The magic number for Team A to win the division is still 5: 58 + 8 â 62 + 1 = 5. As you can see, the magic number is the same whether calculating it based on potential wins of the leader or potential losses of the trailing team.
and a better representation. Starting with $10,000 the Magic Formula would have made you a millionaire by 2009. The Magic Formula is famous for returning a 30% CAGR. From 1988 to 2004, it did achieve a 30.8% return, but the CAGR has declined significantly. No strategy can sustain a CAGR of 30%. Although the backtest in the book only provides data up to 2009, I wouldnât count on 2010-2012 results showing vast out-performance.