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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 199 reviews
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highly recommended
Well worth a read
I did not like the simple writing style of this
book
. It is like a kid's book. Also it could have been written in one chapter because he has
little
to say.
However having said this, the writer writes what many studies have shown to be true,
that
to invest on the share
market successfully
you need patience and look to value. He is saying buy shares with high ROA and high earning yields. I think he underestimates P/E and dividends but anyway.
If you are too caught up in the random walk theory or index funds please give this book a read.
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good read but a little informal and goofy
Read this after reading other
book
s on Index investing. Nice strategy as all are when tested in retrospect.
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Financial Advice books
This offers solid and easy to understand advice on investing. I have given 4 copies to family and friends after reading it.
A fantastic model for all investors
I generally don't read
book
s on investing, which is probably why a 401K I rolled over several years ago has gone absolutely nowhere. I couldn't resist "The
Little
Book
that
Beats
the
Market
", though.
I love the fact that this book is so small you can get through it in an afternoon. It's written in a conversational tone, which also helps make reading it a breeze.
Greenblatt offers two simple rules to investing. I won't give them away here because, well, because then you wouldn't need to buy the book. (I do my best to avoid giving away all the nuggets of information in any review.)
How convincing is the argument for his recommended investment techniques? On a scale of 1 to 10, I'd give it a 10. In fact, I've already got a message in to the broker handling that rolled-over 401K telling him I want out - I'm going to take all the funds in that account, shift them over to one of the low-priced web brokers recommended in the book and reinvest them following Greenblatt's step-by-step instructions. Crazy? I don't think so. Get the book and find out why.
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A great introduction to value investing for beginning investors
I picked this
little
book
up at an airport
bookstore shortly
after it came out when I had a long flight ahead of me and nothing to read. I work professionally as a value investor (I'm an analyst with an institutional equity manager), and picked up this book with a high degree of skepticism - I'm a believer
that
, about 99% of the time when someone touts something like a "magic formula", they're full of BS. My intention was more to critique the book than to learn anything from it.
I have to say I was pleasantly surprised by this book, and I'd rate it an excellent introduction to value investing for beginning investors. I'm still not completely sold that his 'magic formula' will consistently generate the type of returns he talks about, but I will admit the underlying philosophy of the formula is sound (with the one drawback that it could lead you to buy some cyclical companies just as they hit their cyclical earnings peak - the wrong time to buy such companies).
But this book does more than provide a 'magic formula' - it provides a good, easy to read, easy to understand description of important concepts such as return on invested capital. This is why I think it's a good read for a beginning investor.
It's unlikely that an experienced investor will learn much from this book, but I definately think a beginner who's interested in value investing will benefit from the small time investment (only 2 hours or so) required to read this short book.
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