The Little Book that Beats the Market is Joel Greenblatt’s attempt to explain investing to his kids. In that, he succeeds. But it also offers some insights into his simple investing strategy.
If you’ve read any value investing books before, the first half this Little Book will be familiar. Greenblatt understands that investing is not easy. It takes discipline, work, and patience – areas where investors fail – to put up with manic Mr. Market. Greenblatt offers up his Magic Formula to help the cause.
Greenblatt based the concept of his formula off of another investing strategy by Ben Graham. Graham came up with a simple strategy that bought a basket of 20-30 stocks that were cheap enough to meet Graham’s specific requirements, and without doing additional work, the “results would be quite satisfactory”. Continue Reading…
Sometimes we’re wrong. We make mistakes. Bad luck happens.