I wouldn't necessarily say to read this as your first investment book, as my slight knowledge and experience in investing helped me get much more out of reading it, but it wouldn't be the worst choice if you're an absolute novice. I think that the year of getting my feet wet, having read a few books prior to this one, was a good idea.
It was an incredibly insightful book, with humor inserted here and there, keeping it from being an extremely boring read like something written by Benjamin Graham. There are many useful ideas that I was able to take away to further enhance my rapidly evolving investment strategy. I would highly recommend reading this book, no matter what your level of experience is.
Excellent book. Mr. Greenblatt masterfully explains his frameworks for spotting and assessing investing opportunities, both at the micro and macro level. Few stock market books pull back the curtain in such a succinct and lucid way. I highly recommend this book, although I know I am late to the party.
The title may dismay you if you're a knowledgeable investor, but don't let it prevent you from reading this book. It has some brilliant points that can be broken down into several themes. Special situations such as spin-offs are a great way to profit in the markets. Understand the financial incentives of those spinning off and those spun off. Look for situations where incumbent investors are forced to sell due to silly rules like a security's departure from an index. The examples are old, but the themes still hold true today. Many of these themes are those used by hedge funds. The only problem in today's markets may be that so many hedge funds now understand the market dynamics described here that the opportunities may have been whittled away. In the book, the author cites the example of merger arbitrage, which used to be hugely profitable, but which at the time of writing did not provide adequate compensation for the risks. Such *may* be the case for many of the strategies in the book today.
Classic value investing books like Intelligent Investor tells you *what* value investing is (i.e. buying businesses at a big discount to intrinsic value). Joel Greenblatt book tells you *why* these situations exist (index inclusion/exclusion, spin-offs, restructurings etc.) and *how* to identify these situations and recognize the catalysts that will bring a stock's price back closer to intrinsic value.
The main criticism I see in the reviews are: 1) The writing it too advanced, the situations are complicated and it takes too much work to profit from these situations. 2) There is no standardized formula for the novice investor to follow
My responses would be: 1) If it was easy, everybody would be a billionaire. It definitely requires a lot of work, identifying situations and reading lots of regulatory filings to figure out the nuances of certain transactions/situations. That is also why decades after this book was published, people can still find these situations to generate abnormal returns - precisely because many investors may not be willing to be in the time, effort and work into it. 2) Joel Greenblatt has since written the magic formula books for novice investors to follow. That "works" to a certain extent to give you better than average results but not the potential for phenomenal return situations identified in this book. Again it is an effort/reward thing.
Seriously, you can't expect to read one book, put in no effort, and make boatloads of money from the stock market. This book gives you many of the tools you need, IF you're willing to put in the blood, sweat and tears into your investing endeavour.
Unlike many other investment books, this book is written in plain English that everybody can understand. Anybody can then apply the knowledge and steps presented in this book. I would say this is one of the best books I have read so far. So I highly recommend it!
Another extremely well done book by JG. very easy to follow for the novice or the expert. Recommended for the person who is willing to roll up his or her sleeves and do a little work. Lots of "Noise" filtered out by this book. FLM
Great book, one of my favorites for how simply its written but how effective it's ideas are. I find a lot of market books are a waste of time by being rehashed material. This one is different if you haven't read about special situations which is a great place to look.
Awful title. Great book. This is not for beginners. While this is an easy read, the application of the various strategies requires solid knowledge of finance, accounting and capital markets.
The case studies, which are easily readable (even entertaining), are part of what makes this book fantastic. Greenblatt examines special situations in which he has participated and breaks down the various considerations, risks and rewards.
Anyone looking to do a lot of homework for the prospects of outsized returns should pick up a copy.