The Little Book That Beats the Market Quotes

“Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.”
― Joel Greenblatt, The Little Book That Beats the Market

“In short, companies that achieve a high return on capital are likely to have a special advantage of some kind. That special advantage keeps competitors from destroying the ability to earn above-average profits.”
― Joel Greenblatt, The Little Book That Beats the Market

“Although over the short term, Mr. Market may set stock prices based on emotion, over the long term, it is the value of the company that becomes most important to Mr. Market.”
― Joel Greenblatt, The Little Book That Beats the Market

“if you just stick to buying good companies (ones that have a high return on capital) and to buying those companies only at bargain prices (at prices that give you a high earnings yield), you can end up systematically buying many of the good companies that crazy Mr. Market has decided to literally give away.”
― Joel Greenblatt, The Little Book That Beats the Market

“Stock prices move around wildly over very short periods of time. This does not mean that the values of the underlying companies have changed very much during that same period. In effect, the stock market acts very much like a crazy guy named Mr. Market.”
― Joel Greenblatt, The Little Book That Beats the Market

“Somehow, when ownership interests are divided into shares that bounce around with Mr. Market’s moods, individuals and professionals start to think about and measure risk in strange ways. When short-term thinking and overly complicated statistics get involved, owning many companies that you know very little about starts to sound safer than owning stakes in five to eight companies that have good businesses, predictable futures, and bargain prices.”
― Joel Greenblatt, The Little Book That Still Beats the Market

“Stock prices move around wildly over very short periods of time. This does not mean that the values of the underlying companies have changed very much during that same period.”
― Joel Greenblatt, The Little Book That Beats the Market

“Of course, there are plenty of ways we could define what makes a business either good or bad. Among other things, we could look at the quality of its products or services, the loyalty of its customers, the value of its brands, the efficiency of its operations, the talent of its management, the strength of its competitors, or the long-term prospects of its business.”
― Joel Greenblatt, The Little Book That Beats the Market

“After more than 25 years of investing professionally and after 9 years of teaching at an Ivy League business school, I am convinced of at least two things: 1. If you really want to “beat the market,” most professionals and academics can’t help you, and 2. That leaves only one real alternative: You must do it yourself.”
― Joel Greenblatt, The Little Book That Beats the Market

“Although over the short term Mr. Market may price stocks based on emotion, over the long term Mr. Market prices stocks based on their value.”
― Joel Greenblatt, The Little Book That Beats the Market

“Over the short term, Mr. Market acts like a wildly emotional guy who can buy or sell stocks at depressed or inflated prices.
• Over the long run, it's a completely different story: Mr. Market gets it right.”
― Joel Greenblatt, The Little Book That Beats the Market

“maintaining a three- to five-year horizon for your stock market investments should give you a large advantage over most investors. It is also the minimum time frame for any meaningful comparison of the risks and results of alternative investment strategies.”
― Joel Greenblatt, The Little Book That Beats the Market

“companies that achieve a high return on capital are likely to have a special advantage of some kind. That special advantage keeps competitors from destroying the ability to earn above-average profits.”
― Joel Greenblatt, The Little Book That Beats the Market

“When thinking about risk, rather than making things unnecessarily complicated, there are really two main things you should want to know about an investment strategy: 1. What is the risk of losing money following that strategy over the long term? 2. What is the risk that your chosen strategy will perform worse than alternative strategies over the long term?”
― Joel Greenblatt, The Little Book That Still Beats the Market