It may not be magic, but hedge fund guru Joel Greenblatt’s “Magic Formula” sure is a market-beater, Validea CEO John Reese writes in his latest Forbes.com column.

“My Greenblatt-based portfolio ended up notching a 51.4% gain in 2013, beating the S&P 500 by more than 20 percentage points,” Reese says. “And so far in 2014, while the S&P is up just 1.3%, the Greenblatt portfolio is up 10.7%. That strong recent performance has added to the portfolio’s very nice long-term track record. Since its late-2005 inception, it has returned 140% (11.1% annualized), while the S&P is up just 48% (4.8% annualized).”

Reese notes, however, that in compiling that impressive track record, his Greenblatt-inspired portfolio has had some major ups and downs — something that Greenblatt himself says to expect when using his  “Magic Formula” approach. “Greenblatt himself found that the formula will sometimes underperform the market for two, or even three years since it keys on unloved stocks of good businesses that usually are going through short-term troubles,” Reese writes. “During these times, many investors can’t take the emotional pain and they bail on the strategy. If you’re disciplined and stick with it, you can pick up the big bargains they leave behind, and set yourself up for big-time long-term gains.”

Reese discusses how his Greenblatt-based strategy works, and he looks at five stocks it’s currently very high on. Among them: magicJack VocalTec Ltd.