The Little Book That Beats the Market (Little Books. Big Profits)

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concerning XLK: even a monkey would have been able to overperform the index (on average) during 2010-2020. I appreciate the report that something doesn't work anymore. In academia, if you do not have results supporting that X causes Y, the research results are unlikely to be published. That wastes a lot of time by other researchers trying to show that X causes Y, because they don't know that it has been demonstrated that X does not cause Y.

Why was Greenblatt’s system successful for so long, and why has it now failed spectacularly for ten years running? And the formulas made a lot of financial sense too. They were common-sense formulas that were transparent and fair. There seemed to be nothing at all up Greenblatt's sleeve - no complicated market-timing mechanisms, no opaque and complex accounting formulas. Just one numerator and two denominators, both easy to grasp and standard in the financial literature. He touts the success of his magic formula in his book 'The Little Book that Beats the Market' ( ISBN 0-471-73306-7 published 2005, revised 2010), stating it averaged a 17-year annual return of 30.8%. [1]

Rank all companies above chosen market capitalization by highest earnings yield and highest return on capital (ranked as percentages). If anyone—I don’t care if he’s the pope or she’s the queen—tells you something like this, run! There’s no such thing as a magic formula because there’s no such thing as magic. Greenblatt’s entire book is a fairy tale. Hocus Pocus The book sold well enough that Greenblatt published a second edition in 2009, adding the word Still before Beats the Market, and adding a nice new afterword that updated his numbers. Luo, Min (2019). "Case Study of Magic Formula Based on Value Investment in Chinese A-shares Market". Advances in Computational Science and Computing. Advances in Intelligent Systems and Computing. Vol.877. pp.177–194. doi: 10.1007/978-3-030-02116-0_22. ISBN 978-3-030-02115-3. S2CID 158778392. It’s sometimes a bit confusing that solid investing can be so simple. But this book, and all the statistics and historical data within it, show us that simple really can lead to great results. And results are all that matters in investing — not the level of difficulty or complexity of one's approach.

Last quote: "The [magic] 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." If anyone - I don't care if he's the pope or she's the queen - tells you something like this, run! There's no such thing as a magic formula because there's no such thing as magic. Greenblatt's entire book is a fairy tale. This book is just so damn good! It’s simple to read. Extreme laymen like me should find no difficulty in understanding the concepts of this book. I'm far from a financial expert (don't ask me about my own portfolio... I tend to leave money in CDs and mutual funds and forget about it). However, I have done a bit of reading, and know enough to smell BS or something that has the ring of truth.

Customer reviews

In 2005, Joel Greenblatt published a book called The Little Book that Beats the Market. Its explicit aim was to "explain how to make money in terms that even my kids could understand (the ones already in sixth and eighth grades, anyway)." Although it used language and examples that were aimed at children, it was widely read by folks of all ages. The first five chapters, before Greenblatt gets into his investment strategy, comprise an excellent introduction to value investing. Clearly written, easy to understand, it's principled and right. Why was Greenblatt's system successful for so long, and why has it now failed spectacularly for ten years running? the result is that, despite i get a huge dividend compared toSP500, my book lag awfully compared to sp500!!! Forfatter kunne også spart seg for tiraden mot kvaliteten på det amerikanske skolesystemet og hva som kan gjøres for å bedre det. Det kommer litt utav det blå, og burde vært hagesakset ut. Positivt: prinsippene er gode. Enkel og grei formel som bunner ut i at man skal kjøpe kvalitet til en billig penge, for så å vente til resten av tomsingene på markedet skjønner at aksjen er kvalitet. For det vil de skjønne, men det kan ta litt tid. Den er grei.