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The Little Book That Still Beats the Market

4.05  ·  Rating details ·  5,143 ratings  ·  350 reviews
In 2005, Joel Greenblatt published a book that is already considered one of the classics of finance literature. In The Little Book that Beats the Market--a New York Times bestseller with 300,000 copies in print--Greenblatt explained how investors can outperform the popular market averages by simply and systematically applying a formula that seeks out good businesses when t ...more
Hardcover, 208 pages
Published September 7th 2010 by Wiley (first published 2007)
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 ·  5,143 ratings  ·  350 reviews


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David
Mar 01, 2011 rated it really liked it  ·  review of another edition
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.

Greenblatt's book is aimed at the very naive (in the sense of not knowing much, not in the sense of being stupid or gullible) investor. That is, the average American who thinks s/he can use "common sense" and a few hot tips or some "expert opinions" on
...more
Steve
Jan 30, 2011 rated it did not like it
Shelves: investment
Wish I hadn't wasted any money on this one. Although I am a big proponent of value investing and wanted to give Greenblatt a chance, this book is far too simple to be useful to anyone with a more than a passing interest in the stock market. Return on Capital and Earnings Yield are not terrible filters to start off with, but I do believe there is more to successful value investing than applying a simple formula.

Greenblatt is spot on when he says most people end up losing money because of impatie
...more
Martin
Mar 18, 2019 rated it did not like it
As a general rule, if a book promises you a magical money-making formula that works if and only if you truly believe in it, close that book. I do not know whether the author's claims are true or not but the way he sells it screams "scam" to me. In fact, it looks like a genius ponzi scheme which lets you buy stocks and then advertise them to your followers, thus increasing their price. Not to mention the income from the sales of the book itself. On the positive side, the introduction explains som ...more
Anna Avian
Feb 08, 2021 rated it did not like it
What a waste of time. I’m not sure I should even call it a book. It sounded like some unnecessarily long and underwhelming blog post. Too repetitive and poorly written. Extremely pointless conclusions, e.g. “If you answered that 30% is obviously better than 20% and 10% you would be correct!” Seriously?
The little books by Christopher H. Browne and John C. Bogle are a much better choice than this.
KG
Dec 19, 2015 rated it it was amazing
This is a fantastic read. It's short and succinct. I like that Joel uses humorous writing to make something accounting less boring.

In a net shell, he is promoting a strategy he calls "Magic Formula Investing". Building on the time-tested strategies of Ben Graham and Warren Buffet, Joel tells us to invest in companies that return very high return on capital AND high profit per share.

He also sets the right expectations, by providing enough data to prove that it works (mostly), and that it works if
...more
Darin Shreves
Dec 27, 2018 rated it it was amazing
This book first explains complex financial and investing concepts in a highly approachable and relatable manner (albeit with a folksy tone that may wear on some). With that foundation, it then explains (in just a few brisk pages) the author's stock-picking methodology. That this (or any) strategy can consistently outperform the overall stock market is, of course, a highly suspect claim. But the author makes a persuasive case, by far the most persuasive I've seen in my short investing career. Rea ...more
Mikedariano
Mar 02, 2017 rated it it was ok
When people say, "that book should have been a blog post" this is what they mean.

Usually, I like the "Little Books" series but this one was no good for me. I do like Greenblatt though, I strongly suggest you read You Can Be a Stock Market Genius instead.
...more
Higgs
Jun 28, 2021 rated it really liked it
Pretty easy to understand which is nice since I'm only a beginner. Can be repetitive at times but the magic formula that is promoted all throughout the book seems to be worth a shot. ...more
Maja
Apr 13, 2020 rated it it was amazing
Great book to get deeper understanding of how trading works.
Fred Forbes
Jul 11, 2015 rated it really liked it
Want my attention? Free books will usually do it! Picked this up at a recent trade show for investment professionals as I like to review what is available in the popular press so I can field questions and comments from clients. (Explains why I subscribe to a lot of "financial pornography" like "Money", "Kiplingers" and "Consumer Reports".) At any rate, this simplistic, repetitive and slender volume still contains some worthy ideas. The "magic formula" emphasizes investments in companies that com ...more
Sheffy
Jul 12, 2015 rated it liked it
Shelves: nonfiction, audio
You can almost judge this book from its title (and it beats “Investing for Dummies” although it meets the same goal). While author Greenblatt is a professor at a business school, it is less a primer about stock investments (although it does serves as a 101, for illiterate investors such as myself), but more to push his “Magic Formula” for investing, which is actually quite simple, backed by years of his research that shows it beats the market, and can be applied with the help of his free website ...more
Jonathan
Dec 06, 2014 rated it it was amazing
A few weeks ago I read another book from Joel Greenblatt called "the big secret for the small investor". At the time I felt disappointed by the level of simplicity but still wanted to continue to learn from the author. I understand now that back then I missed the point. The principles of value investing are meant to be that way: good businesses at bargain prices, and Joel Greenblatt masters the art of telling this story. Yet 30 holdings to rebalance on a yearly basis seems a lot. I can't help bu ...more
Wigger Tolsma
Jan 04, 2015 rated it liked it
I read this book after reading 'the intelligent investor', and had to get used to the simplicity in which this book is told. At first I liked it, because it is almost straight forward what he is telling, but it gets kind of annoying at the second half of the book.

Too repetetive, and he's promoting his so-called 'magic formula' too much. Still a nice read if youre into investing though! Not the only book youll only need to read on investing as mentioned.
...more
Wei Han
Aug 31, 2014 rated it liked it
This review has been hidden because it contains spoilers. To view it, click here.
Bhargav Pandya
Sep 02, 2020 rated it really liked it
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.
The author is really humorous as well! Seriously sounds like he’s messing around with their kids while teaching them some important things, and thereby, the book wouldn’t feel boring at any point in time. I highly appreciate the author’s funny narration, and it genuinely does seem like the book and the formula taught in the book are extremely valuable
...more
Brian Sachetta
May 20, 2021 rated it it was amazing
As the title hints, this one is centered around a set of simple strategies (called the “magic formula”) that helps investors beat the market. The author pulls no punches here — he readily admits the pros and cons of such a strategy and invites readers to try their hand at it, despite the fact that it doesn’t necessarily win all the time.

But, as he also suggests, the fact that the formula doesn’t beat every strategy when analyzed over all time periods is exactly what makes it so good; success wit
...more
Saif
Dec 16, 2020 rated it really liked it
Placed a pretty good foundation for what it means to buy businesses at bargain prices. Because you always hear about it but never actually know what criteria a business has to pass to be consider good while also being undervalued thus being sold at a bargain price.

The combination of high return on capital with a high earnings yield (earnings per share) is what makes up Joel's "magic formula". Now idk if the magic formula works but he does do a good job explaining why it *should* work and how it
...more
Caleb Smith
Sep 04, 2020 rated it really liked it
This is a simple book almost to the point of being useless. But being that simple really emphasis the facts of what is really important when it comes to investing in stocks. In doing this I believe it does a great job at its goal. Which is an introduction to Value Investing and a reminder of the basics of evaluating a business. I also like the idea of the magic formula for the purpose of eliminating the human emotion from the equation which I believe to be the biggest crutch in investing.
Overall
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Brent
Nov 24, 2020 rated it it was amazing
This is like a condensed version of intelligent investor boiled down to some key valuation criteria and a bit more applicable to current market valuations.

Written in a clear straight forward way that’s easy to comprehend. Another solid investment analysis tool to identify undervalued stocks.

I highly recommend. As more people lean towards index funds there will be more opportunities for growth selecting a few individual stocks.
Manasvi Karanam
Jul 27, 2021 rated it liked it
2.5

If you are completely new to the stock market world, this might provide some basic concepts. Good rationale and disclaimers given for the so called “magic formula”.

However the examples provided to explain some these concepts are over simplified. And there is this childish tone that runs throughout the book which is really irritating.

It’s a quick ‘skim through’ resource if you are new to the investing world.
Matt
May 26, 2021 rated it it was amazing  ·  review of another edition
I gave this book five stars as for a few reasons. First, the author makes a compelling case for his strategy while freely admitting the challenges associated with it. Second, he keeps the book brief. And last, he does a great job of blending humor to keep it light.

I am not certain if I will implement the investment strategy proposed as, by the author's own admission, it can be time consuming. But I am considering.
...more
Eric
Feb 28, 2021 rated it liked it
I liked this book. It had its moments of wit and moments where I thought it sounded a little too good to be true. Regardless, I think its principles will be useful to me moving forward. I wouldn't blindly follow the formula in this book, however I will use it for screening in the future. ...more
Abhijeet Singh
Aug 24, 2020 rated it liked it
Simple and short read. Describes a magic formula to picking stocks (long term investing). I'd suggest this to anyone interested in individual investing.
If you want to get to the crux of the matter even quicker, I'd suggest you only read the summary at the end of each chapter, that'd suffice.
...more
Héctor Pastor
May 12, 2021 rated it it was amazing
This book is just fantastic.
100% recommended to anybody trying to obtain decent returns in the stock market.
The most admirable quality of the book is that anybody could understand it.
No argot, no complex concepts. Plain and simple.
Brad Anderson
Jan 07, 2021 rated it liked it
Shelves: business
This is a decent introductory book which will build ones intuition regarding the methods a value investor uses to evaluate companies. I am not convinced by "the magic formula", so in that regard I cannot recommend it as a book whose advice can be followed blindly. If one is looking for a single reference manual for personal wealth management, one should look elsewhere. ...more
Saurabh Moitra
It is a rather average book. It wants to accomplish a lot and has a fancy name to it and a fancy hope of a so called magic formula but falls short. Following are some of my thoughts:

1. Who is it meant for? Someone who has spent less than a year in the investing business and essentially wants a ready-to-eat dinner. Though personally speaking, even if you are in that category you would be better off reading Peter Lynch.

2. Does it work? The so called magic formula does not do too well in real life
...more
Alec
Feb 20, 2012 rated it really liked it
In many ways, I would equate The Little Book That Still Beats The Market to P90x. I've always respected the P90x fitness plan because it basically says "Hey, if you want to get in shape, work your ass off and don't eat very much. It's going to really suck," which is the most honest approach to a weight loss program I have ever heard. Joel Greenblatt takes a similar approach in this book, as he basically says if you buy above average companies at below average prices, and remain disciplined in do ...more
Syed Ashrafulla
Jan 24, 2017 rated it really liked it  ·  review of another edition
This is a valuable book that you might detest. The reading is that the author takes a sales tone to describe the value investing strategy. There are a lot of anecdotes and italics and exclamation points. These will put you on the defensive. You will ask yourself what scheme the author is selling.

It's not a scheme though. Taking out the entertainment, it is principled value investing. The difference between the author's advice for you and fundamental stock investors is that those investors will c
...more
Yanjia Li
Dec 17, 2019 rated it really liked it
Shelves: favorite
This is the by far the best book about stocks market I've ever read! Well, I've only read three so far (the other two are CFA 1 textbook and O'Neil's book), so my opinion is not fair at all! Still, I feel like this is a great introduction for entry level stocks investor.

The reason I like this book so much, though, isn't because of the magical investment advices, but Joel's excellent writing skills. He is really good at translating his thoughts into words in an easy-going and structured way. His
...more
Frederic Kerr
Feb 18, 2015 rated it really liked it
The value oriented principles described here make a lot of sense. I used the book and Greenblatt's website as a source of ideas on which to do further research. Readers should consider other books like Peter Lynch's "One Up on Wall Street", which is more of a growth investing approach, or Benjamin Graham's classic and much more detailed "The Intelligent Investor", the bible of value investing, to supplement this book. I like the version edited by Jason Zweig.

Author Joel Greenblatt deserves a lot
...more
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Joel Greenblatt is an American hedge fund manager and founder of Gotham Capital. He is also an academic and a writer. He is also an adjunct professor at the Columbia University Graduate School of Business. He is the former chairman of the board of Alliant Techsystems and founder of the New York Securities Auction Corporation.

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