The Little Book That Beats the Market (Little Books. Big Profits)

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There's a blogger in Fort Worth who has chronicled his adventures using the magic formula. His latest post reads, "My MF Portfolio has lost thousands since early 2017, while the S&P 500 Index has risen nearly 35%." I would like to extend to him my sympathies. In 2005, Joel Greenblatt published a book called The Little Book that Beats the Market. Its explicit aim was to "explain how to make money in terms that even my kids could understand (the ones already in sixth and eighth grades, anyway)." Although it used language and examples that were aimed at children, it was widely read by folks of all ages. The first five chapters, before Greenblatt gets into his investment strategy, comprise an excellent introduction to value investing. Clearly written, easy to understand, it's principled and right.

Rank the companies according to the above two factors and combine them to find the best companies for investment.A 2017 study from the markets in Sweden found application of the Greenblatt formula resulted in long-term outperformance of market averages in the periods 2005 to 2015, and 2007 to 2017. The authors also found the "magic formula" was also associated with short-term underperformance in some periods, and significantly increased volatility. [5] 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.

Greenblatt uses EBIT to calculate return on capital because his focus is on profitability from operations as it relates to the cost of the assets used to produce those profits. Forfatter kunne også spart seg for tiraden mot kvaliteten på det amerikanske skolesystemet og hva som kan gjøres for å bedre det. Det kommer litt utav det blå, og burde vært hagesakset ut. Earning yield how much money you can expect to make per year for each rupee you invest in the share. the only investment which was above expectation was my investment in genetic therapies biotech. investing in that kind of 'stuff' is completelly not natural, but i screw up my logic, realizing myself, that i was buying shit but i had no choice if i wanted to bet on the future. because gene therapy is the future. guess what: it paid above expecations. It’s sometimes a bit confusing that solid investing can be so simple. But this book, and all the statistics and historical data within it, show us that simple really can lead to great results. And results are all that matters in investing — not the level of difficulty or complexity of one's approach.I tillegg er første del av boka litt dryg hvis man kjenner prinsippene rundt aksjehandel og markedspsykologien sånn noenlunde. Det er som å være ferdig med grunnskolen, og plutselig skal du tilbake til å høre på "Per har to epler. Så får han et eple til" osv.