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But as for now I would trust it only as far as how much money you are willing to invest into "speculating" and even then do your own calculations instead of blindly going by the website. But queezy isnt even the word I could use about using last years #s for future earnings. which I really do like IF you know where to find the info on the Balance Sheet and Income Statements) and they werent even close.But as for the formula itself I personally believe its worthy enough to at least consider. Also, I didnt like the fact he has a website that just spits out companies without showing the rankings OR how the company got on the list in the first place.
I really like the simplicity of the formula. BUT if you insist on taking someone elses word instead of doing your own homework I would almost insist that you use S&P's 5 star. Unfortunately, its going to take a good 5 years for me to update this review. For someone who invests and believes in the value approach this book makes sense.
I cross referenced some of his stocks on the list to inputting the companies #'s in his formula (the formula used in the Appendix. It has a proven (emphasis on that word) track record of beating the average. There are some good valuations used for buying undervalued stocks. That just screems yikes.
My wife that is not a Market savvy person, enjoyed so much and after read this book she got more clear understanding about Investment.I really recommend this book to anyone that want's to understand better basic principles of the market with out getting too involved with esoteric concepts and formulas. I read this book after hearing so much from my boss, and my bosses boss. Certain moment's it was way to simplistic, for my style, but pretty clear explaining the basic principles of the market.
You use only common sense and 2 simple concepts, and you have to review it only once every few months. Why success eludes almost all individuals and professional investors. This book contains a "magic formula" which will enable you to buy companies at bargain prices. However, I will not disclose the details of this formula in this review lest I will spoil the fun. How to find good companies at bargain prices and (4). So, everything he says should be taken seriously. The use of magic formula is very easy.
How you can beat the market all by yourself; (3). How to view the stockmarket; (2).
Joel Greenblatt, the founder of Gotham Capital, has an average of annualised returns of 40% for over 20 years. Finally, this book will teach you: (1).
This formula will enable you to beat the market and professional managers by a wide margin the low-risk way. What Prof Greenblatt would have you considered is an index-fund-plus where the plus comes from including in your basket of stocks only good businesses settling at low valuation.
Digest this book and you will easily and surely beat the market. You just have got to buy the book.
Prof Greenblatt also explains why the formula would still work even after everyone is cognizant of it.
He even tells you not *not* look at and analyze annual reports for companies. Instant success.So, here is his real method for beating the market.There is one formula to use and it will predict the *same* set of stocks to purchase for everyone who uses it. He also forcefully states a couple of times that you are not a financial expert and he is and so you should not trouble yourself with trying to figure out the formula, just trust it. Once he had that, he concocts a plausible reason for believing the formula and then he publishes it along with the good data sets while leaving out the bad data sets. I read the entire book and found several faults with his presentation, in particular, he left out several data sets and just *says* that they performed well.
You will purchase and still be holding them when the price bubble collapses and you, the user of his formula will lose because you are expecting the price to continue rising. You just have to be quicker (and I am sure he is) than the collapse which might be 1 month at best. Voila. He then takes his profits and waits for the next cycle.This is basic strategy folks, create a demand where is isn't one knowing that it will collapse because it is just than, an artificial demand. The only way to actually make money in the stock market is to figure out how to take it from others and absolutely no other way. Because his formula says which stocks to buy the price *will* go up because everyone who is using his formula will drive the price up. He doesn't care about helping *you* beat the market. However, he will use the annual reports to figure out which companies will be predicted by the formula *prior* to you having access to the same information and he will purchase them.The predictable result.
He also did not present directions on how he actually computed any of the data as other reviewers have stated. Since he told you not to look at annual reports you have to wait for the information to be made available from other sources. It won't. All of this caused me to ask what his *real* method for beating the market is.You must first realize that *he* is trying to beat the market. He most likely used a number of data mining techniques to find the formula that looked the best.
Although, with an abundance of highly complicated books and strategies on the market it is understandable why these apologies were made and equally refreshing to read a book that is so straightforward and takes investors back to the basics of stock picking. The author's "magic formula" for investing removes all of the emotion from picking stocks for a portfolio, which makes it perfect for people who don't believe in hunches. Well, most of the time the strategy presented in this little book will beat the market according to the author, Joel Greenblatt. In spite of the fact that it is a few years old, this book is a must read for anyone who is now utilizing or is considering utilizing individual stocks in his investment portfolio. We highly recommend this book. We found this book to be a very easy read with an easy to understand concept for individual stock investing. At times the author practically apologizes for the simplicity of the strategy, which is really not necessary.
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