Vous voulez voir cette page en français ? Cliquez ici.

Have one to sell? Sell yours here
The Little Book That Beats the Market
 
 
Share your own customer images
Search inside this book

The Little Book That Beats the Market [Hardcover]

Joel Greenblatt (Author)
4.2 out of 5 stars  See all reviews (5 customer reviews)

Available from these sellers.


Formats

 Amazon Price New from Used from
Hardcover CDN $17.29   -- --
Hardcover, Nov 15 2005 --   -- --
Audio, CD, Audiobook, Unabridged CDN $19.55   -- --
There is a newer edition of this item:
The Little Book That Still Beats the Market The Little Book That Still Beats the Market 4.2 out of 5 stars (5)
CDN$ 17.29
In Stock.

Customers Who Bought This Item Also Bought

Product Details

Product Description

From 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 © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From AudioFile

A Wharton-trained head of a successful investment partnership has a foolproof method for evaluating stocks: Companies are worth what they return to investors on a consistent basis. Trusting yourself to use this simple principle will work much better than any get-rich schemes, and much better than trusting other people to select stocks for you. The method requires some digging into a stock's fundamentals, understanding risk factors, and paying close attention to timing when buying and selling. An enhanced CD contains printable details of the author's "magic formula" for evaluating stocks. Adam Grupper does well with this material, projecting confidence and using vocal tones and pacing that are enjoyable for the entire program. T.W. © AudioFile 2006, Portland, Maine-- Copyright © AudioFile, Portland, Maine --This text refers to the Audio CD edition.
See all Product Description
Inside This Book (Learn More)
Explore More
Concordance
Browse Sample Pages
Front Cover | Copyright | Table of Contents | Excerpt | Back Cover
Search inside this book:

Suggested Tags from Similar Products

 (What's this?)
Be the first one to add a relevant tag (keyword that's strongly related to this product)
 
(6)
(4)
(1)
(2)
(1)
(1)

Your tags: Add your first tag
 
See most popular tags
 

Customer Reviews

5 Reviews
5 star:
 (3)
4 star:    (0)
3 star:
 (2)
2 star:    (0)
1 star:    (0)
 
 
 
 
 
Average Customer Review
4.2 out of 5 stars (5 customer reviews)
 
 
 
 
Share your thoughts with other customers:
Most helpful customer reviews

11 of 11 people found the following review helpful:
3.0 out of 5 stars A New Way to Buy Low and Sell Annually, July 15 2006
By 
Donald Mitchell "Jesus Loves You!" (Thanks for Providing My Reviews over 109,000 Helpful Votes Globally) - See all my reviews
(TOP 10 REVIEWER)    (#1 HALL OF FAME)   
This review is from: The Little Book That Beats the Market (Hardcover)
Ever since computer databases have become more available and computing time and memory have been cheap, anyone can take investment history and devise a "back-tested" solution that would have made you a fortune.

I don't recall any version of such a scheme that ever held up for long when it was then used to make investments going forward. Why? Conditions change.

Mr. Greenblatt's approach uses a 17 year history during one of the strongest bull markets in American investing history to come up with his approach. Will this approach work during a flat or declining market? Who knows?

Mr. Greenblatt argues (unpersuasively to my mind) that his approach will continue to work because the method fails to work very consistently over periods of less than three years. That will discourage anyone from using it for very long.

The approach is summarized on pages 134 and 135. Basically, you go to his Web site (www.magicformulainvesting.com) and use the data there to pick companies with a low price relative to buy 20-30 stocks over the next year (a few every 3 months). You sell each one a day or so after a year has passed (to get capital gains treatment), and replace it with another stock. You pick a minimum size market cap (he suggests at least $50 million), and you select from among the stocks for companies which traded at the lowest multiple of EBIT (earnings before interest and taxes) which had the highest ration of EBIT to the sum of net working capital plus net fixed assets in the prior 12 months. The Web site does this for you now for free.

Here is another practical problem with the book. You need to have quite a lot of money to start with or trading fees will eat up your capital. Let's say you have $10,000 to start. You will be making 60 trades a year to buy and sell 30 stocks. Assuming you pay on-line commission rates of $10 a trade, that's $600 gone to start. If you pay more for trading the problem is worse. So to be efficient, you will probably have to be able to commit at least $25,000. More is better.

I would have been more impressed if the approach (which is a variation on value investing) had included a search for global value. The U.S. stock market is much more expensive now than many other markets. A bargain in an over-priced market may not be such a bargain after all.

Mr. Greenblatt does have a nice way of explaining his ideas. Any teenager could follow this book. I suggest that the book's best use is in introducing teenagers to the idea that Mr. Market is way too volatile in setting "correct" prices, and you can take advantage of that by buying low. Then hand your teenager a copy of The Intelligent Investor by Benjamin Graham to understand how you can find bargains. If that approach seems too complex for your teenager, provide next a copy of John Bogle's Commonsense on Mutual Funds.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


9 of 9 people found the following review helpful:
5.0 out of 5 stars Great book for regular people, April 20 2006
By 
Trina Hurdman (Alberta, Canada) - See all my reviews
This review is from: The Little Book That Beats the Market (Hardcover)
I never thought that I would recommend a stock market investment strategy to anyone, until I read this book. This is a short, simple book for:
1. Regular people who don't understand investment principles, and who really couldn't care less. They just want a simple system that gives great returns (around double the market!)
2. People who enjoy investing in the stock market themselves, but don't have the time to do all the research required to find great companies.
3. Investors who don't have a system that regularly beats the market by a significant margin.

This investment strategy is NOT for:
1. People with no discipline. You must believe in the system and stick to it for at least five years, no matter what happens in order to see results.
2. People with less than $60000 to invest. Performing 60 trades a year is not cheap, even with discount brokerages. You will be spending at least $600 just on fees every year. Although the formula is simple enough for a child to follow, it just isn't worth it unless you have enough money.
3. Investors that enjoy spending thousands of hours analysing businesses and already have a system that works just as well.

In response to the critics (mostly on Amazon.com):
1. This system will work anywhere in the world, including Canada. You do not have to do all the rankings manually. The author gives clear instructions on how to apply the formula using readily-available stock screens that charge nothing or a nominal fee.
2. As a foreigner, you can invest in the U.S., so don't say that this book isn't worth anything to those living outside the U.S.
3. Some stocks are losers. Just because the formula selected them to buy doesn't guarantee that they will be winners. That's why you have 30 stocks at a time.
4. Yes, you can get better returns by knowing how to analyze the stocks chosen, but that doesn't mean that if you don't know how to do this that you will end up losing. On the contrary, this formula has proven itself without any further analysis to make the final decisions about which stocks to include.
5. This formula will work even if everyone knows about it because most people won't follow it (not enough discipline), don't have enough money to start (and will have forgotten about it by the time they do), think they can do better (which may or may not be true) or have too much money to invest in the small caps where most deals are found (ie. institutional investors). So don't worry about the stocks prices being driven up just because they're at the top of the author's list to buy.
6. The author wrote this book for his kids, hence all the little anecdotes, and use of humor. I personally found it entertaining as well as informative. Yes, all his points could have been said in a few pages, but fewer people would have read it, and definitely wouldn't have understood it.

Even if you aren't in a position to take advantage of this investment formula now, this book is still a great read and will help you to understand how the stock market works and the principles behind finding good investments.

Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No


5 of 7 people found the following review helpful:
3.0 out of 5 stars Great Book - Don't Waste Your Time if You Live outside US, Mar 5 2006
By A Customer
This review is from: The Little Book That Beats the Market (Hardcover)
The book is pretty basic a the beginning but once you start to learn about the formula it gets interesting. The Magic Formula the Greenblatt speaks about is great and definitely a proven formula in the US. His website calculates all US stocks to give you a list of target stocks. But forget it if you live outside the US. It is impossible to find a tool that will calculate the numbers for you in Canada. Unless you are interested in manually calculating the formula for every stock on the TSX it is not worth the read.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No

Share your thoughts with other customers: Create your own review
Want to see more reviews on this item?
› Go to Amazon.com to see all 254 reviews  3.8 out of 5 stars 
 
 		 Most recent customer reviews



Only search this product's reviews


Listmania!

Create a Listmania! list

Look for similar items by category

Look for similar items by subject























i.e., each book must be in subject 1 AND subject 2 AND ...

Feedback

Would you like to update product info or give feedback on images?