In 2005, Joel Greenblatt published a book that is alreadyconsidered one of the classics of finance literature. In TheLittle Book that Beats the Market—
a New York Times
bestseller with 300,000 copies in print—
Greenblattexplained how investors can outperform the popular market averagesby simply and systematically applying a formula that seeks out goodbusinesses when they are available at bargain prices. Now, with anew Introduction and Afterword for 2010, The Little Book thatStill Beats the Market
updates and expands upon the researchfindings from the original book. Included are data and analysiscovering the recent financial crisis and model performance throughthe end of 2009. In a straightforward and accessible style, thebook explores the basic principles of successful stock marketinvesting and then reveals the author’s time-tested formulathat makes buying above average companies at below average pricesautomatic. Though the formula has been extensively tested and is abreakthrough in the academic and professional world, Greenblattexplains it using 6th
grade math, plain language andhumor. He shows how to use his method to beat both the market andprofessional managers by a wide margin. You’ll also learn whysuccess eludes almost all individual and professional investors,and why the formula will continue to work even after everyone“knows” it.
While the formula may be simple, understanding why the formulaworks is the true key to success for investors. The book will takereaders on a step-by-step journey so that they can learn theprinciples of value investing in a way that will provide them witha long term strategy that they can understand and stick withthrough both good and bad periods for the stock market.
As the Wall Street Journal stated about the originaledition, “Mr. Greenblatt…says his goal was to provideadvice that, while sophisticated, could be understood and followedby his five children, ages 6 to 15. They are in luck. His‘Little Book’ is one of the best, clearest guides tovalue investing out there.”