The Little Book That Beats the Market

Overview

Can you spare two hours to learn how to beat the market?

As unlikely as it may seem, hedge fund manager and professor Joel Greenblatt, whose investment firm has averaged 40% annual returns for over twenty years, can teach you how. You can achieve investment returns that beat the pants off even the best investment professionals and the top academics. In fact, you can learn how it's possible to more than double the annual returns of the stock ...

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Overview

Can you spare two hours to learn how to beat the market?

As unlikely as it may seem, hedge fund manager and professor Joel Greenblatt, whose investment firm has averaged 40% annual returns for over twenty years, can teach you how. You can achieve investment returns that beat the pants off even the best investment professionals and the top academics. In fact, you can learn how it's possible to more than double the annual returns of the stock market averages.

But there's more. You can do it all by yourself. You can do it with low risk. You can do it without making any predictions, and you can do it by following, step by step, a "magic formula" that uses only common sense and two simple concepts. Best of all, once you are convinced that it really works you can choose to do it for the rest of your life. (Mr. Greenblatt even runs a web site, www.magicformulainvesting.com, to help you get started.)

In The Little Book That Beats the Market, Greenblatt shows how successful investing can be made easy for investors of any age. Through entertaining anecdotes and practical pearls of wisdom, the book explores the basic principles of successful stock market investing and then reveals a "magic formula" that makes buying good companies at bargain prices automatic.

The formula has been tested over hundreds of different periods and thousands of stock picks and has been proven extremely profitable for those who are willing to "stick with it." Greenblatt guides you down the path of investment success and explains why his approach will continue to work--even after everyone "knows" it.

It's never too early or too late to start investing, and by following the simple steps and magic formula that are clearly outlined and explained, you can achieve extraordinary long-term investment results with a very low level of risk. With The Little Book That Beats the Market as your guide, you'll know exactly where to go and what to do--and it won't even take much time, just a little effort every few months.

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Editorial Reviews

From Barnes & Noble
It's hard to overstate the simplicity of hedge fund manager Joel Greenblatt's stock-picking strategy -- or the wry, this-won't-hurt-a-bit style with which he explains it. Even better, for those of us too lazy (or nervous) to use his basic formula on our own, Greenblatt supplies a web site, currently free, that selects market-beating stocks for you. You may have officially run out of excuses for not becoming wealthy.
Publishers Weekly
Contrary to efficient-market naysayers, this engaging investment primer contends that ordinary stock-market investors can indeed get better-than-market returns over the long haul. Greenblatt (You Can Be a Stock Market Genius), a Columbia Business School adjunct professor, touts a "value-oriented" approach that looks for bargain stocks whose share price is cheap relative to the company's profitability. His version is a "magic formula" that ranks stocks on the basis of two variables-the earnings yield and the business's return on capital. His Web site, magicformulainvesting.com, virtually automates the procedure for novices. Greenblatt offers lots of statistical proof of the formula's success, but emphasizes the importance of faith in seeing the investor through inevitable short-term downturns: "It will be your belief in the overwhelming logic of the magic formula that will make the formula work for you in the long run." He conveys his ideas through a lucid if rudimentary and rather corny explanation of basic investment concepts about risk, return, interest and business valuation. Although the fabulous returns he touts seem too good to be true, Greenblatt's formula is a reasonable variant of mainstream value-investing methods. Investors seeking a little more hands-on excitement than the average mutual fund offers won't go too far wrong following his advice. (Jan.) Copyright 2005 Reed Business Information.
Library Journal
Greenblatt is renowned for his spectacular business prowess; among his many accomplishments are averaging returns of 40 percent or better for more than a decade; starting his own lucrative private investment firm, Gotham Capital; and currently serving as an adjunct professor at Columbia Business School. Here he shares his stock selection wisdom with the novice investor. His writing is never condescending or beyond comprehension. In fact, he takes great joy in explaining ideas in simple terms and using arithmetic that he claims even his young children can understand. He also delights in sharing with readers his "magic formula" of finding quality bargain stocks. Lighthearted, witty, and humorous, the overall presentation is a great start for learning about investing and can be used as an alternative to comparable titles in the Dummies series. Recommended for public libraries as well as undergraduate collections for a non-textbook understanding of investing principles; readers who like Greenblatt's style may then continue with his earlier and more advanced work, You Can Be a Stock Market Genius.-C. Geck, Kean Univ., Union, N.J. Copyright 2005 Reed Business Information.
The Wall Street Journal
One of the best, clearest guides to value investing out there. I have some minor quibbles, but in a world where individual-investor advice is dominated by jargon-filled short-termism on the one hand and oversimplification on the other, Mr. Greenblatt's approach is valuable.
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Product Details

  • ISBN-13: 9781428101401
  • Publisher: Recorded Books, LLC
  • Publication date: 3/1/2012
  • Language: Spanish
  • Format: CD

Meet the Author

Joel Greenblatt is the founder and a managing partner of Gotham Capital, a private investment partnership that has achieved 40% annualized returns since its inception in 1985. He is a professor on the adjunct faculty of Columbia Business School, the former chairman of the board of a Fortune 500 company, the cofounder of ValueInvestorsClub.com, and the author of You Can Be a Stock Market Genius. Greenblatt holds a BS and an MBA from the Wharton School.

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Read an Excerpt

Introduction

This book was originally inspired by my desire to give each of my five children a gift. I figured if I could teach them how to make money for themselves, then I would be giving them a great gift -- truly one that would keep giving. I also figured that if I could explain how to make money in terms that even my kids could understand (the ones already in sixth and eighth grades, anyway), then I could pretty much teach anyone how to be a successful stock market investor.

While the concepts covered in this book may seem simple -- perhaps too simple for sophisticated investors -- each step along the way is there for a reason. Stay with it, and I assure you the payoff for both beginning and experienced investors will be huge.

After more than 25 years of investing professionally and after 9 years of teaching at an Ivy League business school, I am convinced of at least two things:

  1. If you really want to "beat the market," most professionals and academics can't help you, and
  2. That leaves only one real alternative: You must do it yourself.
Luckily, that might not be such a bad thing. As improbable as it may seem, you can learn to beat the market. Through a simple, step-by-step process, this book can teach you how. To help you along, I have included a magic formula. The formula is simple, it makes perfect sense, and with it, you can beat the market, the professionals, and the academics by a wide margin. And you can do it with low risk. The formula has worked for many years and will continue to work even after everyone knows it. Although the formula is easy to use and will not take much of your time, it will work for you only if you make the effort to fully understand why it works.

Along the way, you will learn:

  • How to view the stock market
  • Why success eludes almost all individual and professional investors
  • How to find good companies at bargain prices
  • How you can beat the market all by yourself
I have included an Appendix section for those of you with a higher level of financial training, but it is not necessary for people to read or understand the appendixes to be able to understand and apply the methods found in this book. The truth is that you don't need an MBA to beat the market. Knowing lots of sophisticated formulas or financial terms isn't what makes the difference. Understanding the simple concepts in this book ... is.

So please enjoy this gift. May the small investment of time (and 20 bucks or so) greatly enrich your future. Good luck.

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