- Hardcover: 160 pages
- Publisher: John Wiley & Sons Inc (12 April 2011)
- Language: English
- ISBN-10: 1119979609
- ISBN-13: 978-1119979609
- Product Dimensions: 13.6 x 1.8 x 19.8 cm
- Boxed-product Weight: 259 g
- Average Customer Review: 1 customer review
- Amazon Bestsellers Rank: 4,311 in Books (See Top 100 in Books)
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The Big Secret for the Small Investor: A New Route to Long-Term Investment Success Hardcover – International Edition, 12 Apr 2011
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From the Inside Flap
1. They can do it themselves. Trillions of dollars are invested this way. (Of course, the only problem here is that most people have no idea how to analyze and choose individual stocks. Well, not really the only problem. Most investors have no idea how to construct a stock portfolio, most have no idea when to buy and sell, and most have no idea how much to invest in the first place.)
2. They can give money to professionals to invest. Trillions of dollars are invested this way. (Unfortunately, most professionals actually underperform the market averages over time. In fact, it may be even harder to pick good professional managers than it is to pick good individual stocks.)
3. They can invest in traditional index funds. Trillions of dollars are also invested this way. (The problem is that investing this way is seriously flawed–and almost a guarantee of subpar investment returns over time.)
4. They can read The Big Secret for the Small Investor and do something else. Not much is invested this way. Yet . . .
Let top hedge–fund manager, Columbia Business School professor, former Fortune 500 chairman, and New York Times bestselling author Joel Greenblatt take you on a journey that will reveal the Big Secret for both individual and professional investors. Based on path–breaking new research, find out how anyone can beat the market, the index funds, and the experts by following a new approach that relies on the principles of value investing, common sense, and quantitative discipline. Along the way, learn where "value" comes from, how markets work, and what really happens on Wall Street. By journey′s end, small
investors (and even not–so–small investors) will have found their way to some excellent new investment choices.
From the Back Cover
THE LITTLE BOOK THAT BEATS THE MARKET
"One of the best, clearest guides to value investing out there."
Wall Street Journal
"Simply perfect. One of the most important investment books of the last fifty years!"
"A landmark book–a stunningly simple and low–risk way to significantly beat the market!"
Michael Steinhardt, the dean of Wall Street hedge–fund managers
"The best book on the subject in years."
"The best thing about this book–from which I intend to steal liberally for the next edition of The Only Investment Guide You′ll Ever Need–is that most people won′t believe it. . . . That′s good, because the more people who know about a good thing, the more expensive that thing ordinarily becomes. . . ."
Andrew Tobias, author of The Only Investment Guide You′ll Ever Need
"This book is the finest simple distillation of modern value investing principles ever written. It should be mandatory reading for all serious investors from the fourth grade on up."
Professor Bruce Greenwald, director of the Heilbrunn Center for Graham and Dodd Investing, Columbia Business School
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Different to his previous books, market genius and the little book that beats the market (blue book).
Explains why hedge funds and investment managers, or ETFs continue to underperform long term minded investors. It all goes back to ben graham and dodd's ideas, it seems.
Most helpful customer reviews on Amazon.com
But for anyone who has read Greenblatt's other books, this one is a severe disappointment. Here is my outline of the book:
* Everybody selling you stuff in the financial area has incentives that don't line up with yours, so don't fall for their tactics
* High return on capital and earnings yield identify good investments, on average
* I have found a nifty new way to get good returns at low risk, but I'll only give you the 30,000-foot view
* Whatever you do, don't get greedy (invest too high a percentage in stocks) or fearful (invest too small a percentage), especially in reaction to recent results
* But there is nothing you can do with this information since a) it's impractical to do yourself, b) I didn't give you enough information anyway, and c) there are no products available that use my method
Cross referencing back to previous books (especially The Little Book That [Still] Beats the Market) could help more technically minded investors derive the return on capital and earnings yield formulations (they are not straightforward). But I am at a loss to understand how a novice investor would use any of the information in this book, aside from avoiding bad money managers (which I suppose is worthwhile, but isn't the apparent point of the book).
All in all this reads like a book thrown together from pieces here and there and not finished. It's choppy and incomplete, and varies a great deal in tone and intended audience from one passage to the next.
Entirely unexpectedly poor quality from someone as good at what he does.
"The Big Secret" is a simple and relatively concise view into exactly why the majority of active managers underperform the market averages over time, net of fees; and why disciplined adherence to the proposed solution will likely result in significant out-performance by the small investor. The professional money manager will be equally well served by reviewing the insights into the greatest stumbling blocks obstructing the path to successful money management (as well as suggestions for surmounting and avoiding those obstacles).
The explanation of what makes the value approach work is coupled with the necessary insight into behavioral finance, which together provide one with the necessary perspective for successful money management. It is these very insights into the practical difficulties of money management, as well as into behavioral finance, which virtually ensure the proposed solution will continue working over time; in addition to why it will likely remain "a secret".
The only weird thing about this book is that he tries really hard to describe why his last two books might be too complicated for some people. He does this by describing DCF and other investment concepts and then explaining why those concepts are hard. Well... if the reader is a novice, I have a feeling they'll be confused by this discussion. In other words, this book might appear to be geared toward a novice, but I suspect that only the "intermediate" investor who doesn't want to really invest on his own will really get it. If this describes you then this book is for you, and the fact that it's short and to the point should probably be perfect for you. And if you're a novice who's open minded who doesn't want to do any more research than this (and who's willing to gloss over the DCF stuff), this book is perfect for you too.
Note that he doesn't plug his new mutual funds ANYWHERE in the book. (His firm has new funds that apparently invest based on his 'magic formula' method from his last book.) He does provide a new website that he created to go with the book, but even there you have to click through some tabs before you get to his fund. I'm almost surprised he buried them so deep, but I guess he didn't want to make this a plug for his funds.
All in all pretty good. I'm a bit of an investing geek so I would rather try some of the tips in his previous books, but if you really don't want to do that then this, I think, is the only real alternative method of investing.