I read it, used it, and made money with it

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	• The Little Book That Beats the Market (Little Books. Big Profits) Joel Greenblatt Wiley, 2005 - 176 pages average customer review:based on 200 reviews view larger image
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highly recommended

I read it, used it, and made money with it

I don't know much about investing but was intrigued by this concept. So far in 4 months I am up 22%, beating every average out there. Not bad. I'm a believer.

Joe continually says that the simple concepts of this book will go over the sophisticated investors heads'. After reading the reviews on here, it appears as he is correct!

So, if you are open to new ideas and don't think you know everything, I'd say give it a shot.

Not quite a waste of money...

I don't really appreciate Greenblatt's excessively condescending tone in this book. He approaches his audience not as 12 year olds, but as 8 year olds with learning disabilities and a corny sense of humor. His constant reference to his MAGIC FORMULA is incredibly annoying and misleading. It's not particularly magical, and there's nary a formula. And basing his entire case on 17 years worth of data analysis is pretty weak, too. There's a lot of hand-waving.

But for all the belly-aching over the lack of rigorous specifics from other reviewers, rest assured Greenblatt's numerical analysis is actually right. After looking at Compustat and trying to replicate his results, I roughly got his numbers.

Begrudgingly, I have to admit that for all the book's flaws with its childish approach and the expectation that we should take his numbers as given and its short-shrifted logic, Greenblatt's value-based approach to investing still shines through. He does a good job of emphasizing some hallmarks of value investing -- patience, discipline, and focusing on cheap assets. And his inappropriately named "magic formula" does highlight stocks that many investors would view as "value." So, despite his complete lack of specifics on virtually every topic in the book, what he does offer is still valid. And his website is free and does exactly what he says it will do.

I truly despise and resent the last chapter -- "what will you do with all of the millions you haven't made yet?" It's inappropriate to speculate on unmade money that isn't his. But then to go a step further and have a professor of all people suggest we should be giving money to education just stinks of self-interest. And then to go even further and condemn public education because of teacher unions and its anti-capitalist and bureaucratic approach as hopeless is a horrendous way to end a book, even if he is completely right.

True, there's a lot of fluff in this book. But it has its high points and value investors of all stripes and sizes can still read it and get something out of it. I'm glad I bought it.

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Good Investment Advice

He wrote this so anyone can beat the market average--especially beat most of the mutual fund adverages with little risk and little tracking. It is O.K. to buy Blue chip stocks at a lesser cost and hold them as the price goes up. This is not for active traders, but general investors who think they can invest at least as well as many mutual fund managers. You can!

Value stock trader

I enjoyed reading this book and started tracking 24 recommended stocks in February. The formula was working quite well until August when it lost all gains and some of the principal but I have confidence that this basket of stocks will rebound by year's end.

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A Solid Buy

If you're looking to invest in individual stocks and incorporate a method on how to make your picks, don't miss this truly fantastic book that will hold your hand along the way.

reviews: 1, 2, 3, page 4, 5, 6, 7, 8, 9, 10, 11, 12, 13

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