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The Little Book That Beats the Market (Little Books. Big Profits)
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Sales rank 1,706
Customers rating (based on 214 reviews)
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Two years in MBA school won't teach you how to double the market's return. Two hours with The Little Book That Beats the Market will. In The Little Book, Joel Greenblatt, Founder and Managing Partner at Gotham Capital (with average annualized returns of 40% for over 20 years), does more than simply set out the basic principles for successful stock market investing. He provides a "magic formula" that is easy to use and makes buying good companies at bargain prices automatic. Though the formula has been extensively tested and is a breakthrough in the academic and professional world, Greenblatt explains it using 6th grade math, plain language and humor. You'll learn how to use this low risk method to beat the market and professional managers by a wide margin. You'll also learn how to view the stock market, why success eludes almost all individual and professional investors, and why the formula will continue to work even after everyone "knows" it.
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| Publisher | Wiley | | Release date | 11/2005 | | Availability | Usually ships in 24 hours | | Edition | Hardcover |
| | List price | $19.95 | | Our price | $13.57 (you save 31.98%) | | Used price | from $3.77 |
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 Not good condition
When I received the book, I was dissatisfied with the condition of the book. The hardcover was with mold and seemed to be wet before.
I will not purchase any book at this store.
 Excellent quick read for investors
If you are a fan of Magic Investing, you should read this. Well written, a quick read, and gives some background to the online website.
Enjoyable light read on a very serious topic
Well worth a read and a good start for the beginning or intermediate investor who wants to beat the market over time.
I suggest to read some basic stuff before you buy this book
First of all, I purchased this book, and did it as it suggested, but failed!!!
then I tried to learn some other basic book, such as "Stock Trend analysis", you will find this book did NOT teach you anything, and just ask you to believe some "Magic" in the world, if everyone has this book and follow what the author suggested, then everyone will make money from stock market, it is simply not true!!!
 How to invest intelligently in the Stock Market
1. The best equation is buying good companies with high rates of return on the capital and high earnings yields.
2. Margin of safety assumes the investor can not know the future; therefore, the best opportunity is to buy the stock of a good company, at discount. The optimum discount pricing for buying is near or below liquidation price. Graham identified prices at this level, as, "unreasonable prices". Most, investors shy away from seizing the opportunity at discount prices fearing greater valuation losses due to some undiscovered information, they are not aware.
3. Buying stock is equivalent to owning a percentage of the company. Knowing the value of the company and having confidence the future value of the company will appreciate validates the buying price of the stock. Otherwise, he will invest his money into bonds and gain a fixed interest income.
4. Investors have a hard time at making predictions. For some time after the great depression stock investment was considered risky.
5. Suppose, you own a company and that company is making a profit. The business valuations are known and you decide to sale part of the company as stock. The stock price can be easily computed. The stock price is equal to the business valuation divided by the number of stock. The stock price, at this point is deterministic. The company continues to operate and report profits. The profits are reflected on the income statement. However, the price of the stock fluctuates randomly away from the price too earnings, it initially started. The price swings vary, at times people are paying out outrageous price; and at other times missing bargain prices. But should you care that the price is fluctuation wildly? No. You don't care, about the causes, for the price fluctuation, only that price fluctuated!
6. You want to know the valuation of the business and using this valuation will predict the stock's value and support price to buy and sale. Buying high earning stock at bargain price allows you to earn income from dividend payments with relative without price dropping out.
7. The equation equals buying stocks with high earnings and high return on capital; these stocks come from good companies and are bargain priced.
8. How do we choose good companies at bargain prices? Find 30 stocks with the equation criteria for your portfolio. In one case study, the stocks performed 30% returns for 17 years. Choose companies through a ranking system. Companies with high rates of return on the capital and high earnings yields are ranked highest. Companies with good brand name can perform against competitors, who want a portion of the profits. Companies with a high return on capital are likely to achieve an advantage of kind. Eliminate companies that earn ordinary or poor returns on capital. Readjust your portfolio every three years according to rank. The equation works better than market averages and did not lose money. Don't buy and sell short term because the chances are high that you will lose, instead, invest long-term. Do be afraid of losing clients during short term drops in the valuation of the portfolio, instead, have confidence the equation will work long term.
9. If we know how a group of stock high earnings and high capital returns perform on the average, we gain greater confidence of how they will perform in the future. However, short term price fluctuation will not reveal any future pattern. You will have to be patient. The equation is a long-term performer and eventually outperforms the competition significantly. The equation will work in the long-term.
10. Look for companies you believe will be able to continue in business for many years and companies that should be able to grow their earnings over time.
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