The Little Book That Still Beats the Market is a book written by Joel Greenblatt that aims to provide readers with a simple yet effective investment strategy that can help them beat the market. The book is set in the world of finance and investment, and the author uses real-life examples to illustrate his points.
The main character in the book is the author himself, who shares his investment philosophy and strategy with the readers. The conflict in the book is the challenge of beating the market, which is a daunting task for most investors.
The book’s themes revolve around the concept of value investing, which is the practice of buying stocks that are undervalued by the market. The author’s writing style is straightforward and easy to understand, making it accessible to readers of all levels.
One of the things I enjoyed about the book is the author’s use of real-life examples to illustrate his points. This makes the book relatable and helps readers understand the concepts better. I would recommend this book to anyone who is interested in investing and wants to learn more about value investing.
Here are ten key takeaways from the book:
1. Value investing is a proven investment strategy that can help investors beat the market.
2. The key to value investing is buying stocks that are undervalued by the market.
3. The author’s investment strategy involves buying stocks with a high earnings yield and a high return on capital.
4. The author’s investment strategy also involves buying stocks with a low price-to-earnings ratio.
5. The author’s investment strategy is based on the principle of buying good companies at bargain prices.
6. The author’s investment strategy is simple and easy to implement.
7. The author’s investment strategy has been proven to work over the long-term.
8. The author’s investment strategy requires patience and discipline.
9. The author’s investment strategy is not foolproof and requires ongoing monitoring and adjustment.
10. The author’s investment strategy is a great starting point for anyone interested in value investing.
The strengths of the book include the author’s clear and concise writing style, the use of real-life examples to illustrate his points, and the simplicity of the investment strategy. One weakness of the book is that it may not be suitable for more experienced investors who are looking for more advanced investment strategies.
In conclusion, The Little Book That Still Beats the Market is an excellent book for anyone interested in value investing. The author’s investment strategy is simple and easy to implement, and the book is written

The Little Book That Still Beats the Market by Joel Greenblatt is a guide to investing in the stock market using a simple and effective strategy called the “Magic Formula.” The book explains how to identify and invest in undervalued companies with strong financial performance, using a combination of earnings yield and return on capital. Greenblatt also emphasizes the importance of patience and discipline in investing, and provides practical advice for building a successful investment portfolio. Overall, the book offers a straightforward and accessible approach to investing that can help both novice and experienced investors achieve better returns in the stock market.

The book is divided into nine chapters, each building upon the previous one:
1. Introduction: The author introduces the concept of value investing and explains how the book is based on a simple but powerful formula that has consistently outperformed the market.
2. The Big Secret: Greenblatt reveals the formula for his investment strategy, which involves buying high-quality companies at bargain prices.
3. The Magic Formula: This chapter provides a detailed explanation of the formula, which involves ranking companies based on two factors: return on capital and earnings yield.
4. How to Use the Magic Formula: Greenblatt explains how to use the formula to select stocks and build a diversified portfolio.
5. The Little Book, Step by Step: This chapter provides a step-by-step guide to implementing the strategy, including how to screen for stocks, calculate the formula, and manage the portfolio.
6. The Magic Formula in Practice: Greenblatt presents real-world examples of the formula in action, including case studies of successful investments.
7. The Magic Formula Goes to Wall Street: This chapter explores the challenges of implementing the strategy in the institutional investing world.
8. The Magic Formula Goes Global: Greenblatt discusses how the formula can be applied to international markets.
9. Conclusion: The author summarizes the key points of the book and encourages readers to follow the magic formula and stick to the strategy over the long term.

Chapter 1: The Big Secret
The author introduces the concept of value investing and explains how it can be used to beat the market. He also introduces the “Magic Formula” which combines two key metrics, earnings yield and return on capital, to identify undervalued stocks.
Chapter 2: The Magic Formula
Greenblatt explains the Magic Formula in more detail, providing examples of how it works and why it is effective. He emphasizes the importance of using the formula consistently over time.
Chapter 3: How the Formula Works
The author provides a step-by-step guide to using the Magic Formula, including how to calculate earnings yield and return on capital. He also explains how to adjust for differences in industry and company size.
Chapter 4: The Formula in Action
Greenblatt provides real-world examples of how the Magic Formula has worked in the past, including the performance of his own investment firm. He also addresses common criticisms of the formula and explains why they are not valid.
Chapter 5: Why It Works
The author explains why the Magic Formula works, including the fact that it identifies companies that are undervalued by the market and have strong fundamentals. He also explains why the formula is not a guarantee of success and requires discipline and patience.
Chapter 6: Putting It All Together
Greenblatt provides practical advice on how to implement the Magic Formula in a real-world investment portfolio. He emphasizes the importance of diversification and risk management.
Chapter 7: The Formula’s Future
The author addresses the potential limitations of the Magic Formula and how it may need to be adapted in the future. He also encourages readers to continue learning and adapting their investment strategies over time.
Chapter 8: Final Thoughts
Greenblatt summarizes the key points of the book and encourages readers to take action and start using the Magic Formula in their own investment portfolios. He also emphasizes the importance of staying disciplined and focused on long-term results.

1. “Investing is simple. It’s the financial industry that works hard to make it complex.”
2. “The stock market is a device for transferring money from the impatient to the patient.”
3. “The key to successful investing is not predicting the future, but learning from the past and understanding the present.”
4. “Investing is not about beating others at their game. It’s about controlling yourself at your own game.”
5. “The beauty of value investing is that it doesn’t require a high IQ, unusual business insights, or inside information. What it does require is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.”

Introduction:
– The stock market is unpredictable, but investing in good companies at low prices can lead to long-term success.
Chapter 1: The Secret Formula Revealed
– The key to successful investing is finding companies with high earnings yield and high return on capital.
– This formula can be applied to any company, regardless of size or industry.
Chapter 2: A Formula That Beats the Market
– Using the formula, investors can create a “magic formula” portfolio that consistently outperforms the market.
– This portfolio should be rebalanced annually to maintain its effectiveness.
Chapter 3: The Magic Formula in Action
– The magic formula has consistently outperformed the market over the long-term.
– Investors can use the formula to identify undervalued companies and potentially earn higher returns.
Chapter 4: The Magic Formula Goes to Work
– The magic formula can be applied to various investment strategies, including small-cap and value investing.
– Investors should have patience and discipline when using the formula to achieve long-term success.
Chapter 5: Why It Works
– The magic formula works because it identifies companies with strong financials and undervalued stocks.
– This approach is based on sound investment principles and a focus on long-term value.
Chapter 6: The Magic Formula and Your Portfolio
– Investors can use the magic formula to create a diversified portfolio that maximizes returns and minimizes risk.
– The formula can be applied to both individual stock picking and index fund investing.
Chapter 7: The Magic Formula in Perspective
– While the magic formula is a simple and effective investment strategy, it is not a guarantee of success.
– Investors should be aware of market fluctuations and adjust their portfolios accordingly.
Conclusion:
– The magic formula is a proven investment strategy that can lead to long-term success.
– Investors should focus on finding undervalued companies with strong financials and have patience and discipline when implementing the formula.

The practical application suggested by the author in The Little Book That Still Beats the Market is the use of his investment strategy, called the Magic Formula. The Magic Formula involves selecting stocks based on two factors: the company’s earnings yield and return on capital. Greenblatt suggests that investors should buy a portfolio of 20-30 stocks that rank highly according to these two factors and hold them for one year before re-evaluating the portfolio.
The author also emphasizes the importance of sticking to a disciplined investment strategy and avoiding emotional decision-making. He suggests that investors should focus on the fundamentals of the companies they invest in rather than short-term market fluctuations.
Overall, the actionable steps suggested by Greenblatt involve implementing his Magic Formula strategy and maintaining a disciplined approach to investing.

Main idea: Investing in high-quality companies with a strong return on capital and a high earnings yield can lead to better long-term returns than simply investing in the overall market.
Example: Greenblatt uses the example of a hypothetical investor named “Mr. Market” who offers to sell his ownership stake in a company for a certain price each day. The price fluctuates based on Mr. Market’s emotions and perceptions of the company’s value. However, if an investor focuses on the company’s underlying fundamentals, such as its return on capital and earnings yield, they can make informed decisions about when to buy and sell the stock. Greenblatt argues that this approach can lead to better returns over time than simply following the ups and downs of the overall market.
Example: Greenblatt also discusses the importance of diversification and avoiding emotional decision-making. He tells the story of a friend who invested all of his savings in a single stock based on a tip from a coworker. When the stock price plummeted, the friend lost everything. Greenblatt emphasizes the importance of spreading out investments across multiple companies and not letting emotions or outside influences dictate investment decisions.
Example: Greenblatt provides several real-world examples of companies that fit his investment strategy and have seen long-term success. One such company is Walgreens Boots Alliance, which has a strong return on capital and a high earnings yield. Greenblatt notes that the company has consistently outperformed the overall market over the past decade. Another example is Apple, which also has a high return on capital and earnings yield, and has seen significant growth and success over the years.

In The Little Book That Still Beats the Market, Joel Greenblatt presents a simple yet effective investment strategy based on the principles of value investing and quantitative analysis. The key insights presented in this book include:
– The Magic Formula: The author’s investment strategy is based on a simple formula that ranks stocks based on their earnings yield and return on capital. By investing in companies with high earnings yield and return on capital, investors can generate above-average returns over the long term.
– The Importance of Patience: The author emphasizes the importance of patience and discipline in investing. He advises investors to stick to their strategy and avoid getting caught up in short-term market fluctuations.
– The Value of Diversification: The author recommends diversifying one’s portfolio across different sectors and industries to reduce risk and increase the chances of generating consistent returns.
– The Power of Compounding: The author highlights the power of compounding and how it can help investors achieve their long-term financial goals. He encourages investors to reinvest their dividends and stay invested for the long haul.
Overall, The Little Book That Still Beats the Market is a valuable resource for investors looking to adopt a simple yet effective investment strategy. The author’s approach is grounded in sound principles and has a proven track record of success.

The Little Book That Still Beats the Market by Joel Greenblatt is a concise and engaging read that provides valuable insights into the world of investing. Greenblatt’s writing style is straightforward and easy to understand, making it accessible to both novice and experienced investors alike.
The book centers around Greenblatt’s “Magic Formula” for investing, which is based on two simple metrics: return on capital and earnings yield. By using these metrics to identify undervalued companies, Greenblatt believes that investors can consistently beat the market.
Throughout the book, Greenblatt provides real-world examples and case studies to illustrate his points, making the concepts he presents more tangible and relatable. He also includes practical tips and advice for implementing his Magic Formula strategy, making it a useful resource for anyone looking to improve their investment performance.
Overall, The Little Book That Still Beats the Market is a must-read for anyone interested in investing. Its concise and engaging writing style, combined with its valuable insights and practical advice, make it a valuable resource for investors of all levels.

Overall, The Little Book That Still Beats the Market by Joel Greenblatt is a valuable read for novice investors looking to understand the basics of value investing. Greenblatt’s investment strategy is simple to understand, and he breaks it down into easy-to-follow steps that can be implemented by anyone. The book’s focus on finding undervalued companies through a combination of earnings yield and return on capital is a sound approach that has proven successful over time.
However, the book’s emphasis on a single investment strategy may limit its usefulness for more experienced investors who have already developed their own investment approach. Additionally, the book’s reliance on historical data to support its claims may not be entirely applicable in today’s rapidly changing market.
Overall, The Little Book That Still Beats the Market is a worthwhile read for those new to value investing, but it should be supplemented with additional research and analysis before making any investment decisions.