The Little Book That Still Beats the Market

The Little Book That Still Beats the Market

Your Safe Haven in Good Times or Bad

Book - 2010
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In 2005, Joel Greenblatt published a book that is already considered one of the classics of finance literature. In The Little Book that Beats the Market—a New York Times bestseller with 300,000 copies in printGreenblatt explained how investors can outperform the popular market averages by simply and systematically applying a formula that seeks out good businesses when they are available at bargain prices. Now, with a new Introduction and Afterword for 2010, The Little Book that Still Beats the Market updates and expands upon the research findings from the original book. Included are data and analysis covering the recent financial crisis and model performance through the end of 2009. In a straightforward and accessible style, the book explores the basic principles of successful stock market investing and then reveals the author’s time-tested formula that makes buying above average companies at below average prices automatic. Though the formula has been extensively tested and is a breakthrough in the academic and professional world, Greenblatt explains it using 6th grade math, plain language and humor. He shows how to use his method to beat both the market and professional managers by a wide margin. You’ll also learn why success 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 formula works is the true key to success for investors. The book will take readers on a step-by-step journey so that they can learn the principles of value investing in a way that will provide them with a long term strategy that they can understand and stick with through both good and bad periods for the stock market.

As the Wall Street Journal stated about the original edition, “Mr. Greenblatt…says his goal was to provide advice that, while sophisticated, could be understood and followed by his five children, ages 6 to 15. They are in luck. His ‘Little Book’ is one of the best, clearest guides to value investing out there.”

Using entertaining anecdotes to drive home his points, the author expands on the successful investing strategy from his original best-seller, offering a time-tested "magic formula" for profiting in any market.

& Taylor

A hedge fund manager and Columbia Business School professor shows how "beating the market" can be made simple and easy for investors of any age, updated by an afterword covering the recent financial crisis.
The author expands on his successful investing strategy to offer a time-tested "magic formula" for profiting in any market.

Publisher: Hoboken, N.J. : Wiley ; Chichester : John Wiley [distributor], 2010
Edition: 2nd ed
ISBN: 9780470624159
Characteristics: 183 p. ; 19 cm


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Dec 30, 2018

A good introduction to the world of investment in the first chapters.
A basic concept of buying undervalued stocks is fine. But make sure you are not buying a dwindling down company.
Make sure you check Financial statements in places like
for Net Income and Gross Income. Both have to be positive and growing or soon to be growing for cyclical companies.
Check both yearly and quarterly statements.
If last year Net income smaller than previous, read about the company and see if there is a potential come back. If yes, buy it, otherwise, don't.
Watch for the companies that are down on earning in the last one or two quarterly statements, but have the potential to grow in the near future.
Summary: I would never buy a stock just because it's on a good sale (magic formula) unless the above mentioned financial statements are quickly checked as well.
The author himself mentions that in the last chapters.
The idea of Cost of Revenue be smaller than Gross Profit is good though.
My biggest problem is that the author is suggesting to rely on 'magic formula' only for most of the people.

Jan 13, 2015

A useful introduction to investing. Although it is a struggle to be confident in MFI investing as a sole strategy, it can be useful as a primary stock screening tool.


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