The Little Book That Still Beats the Market

Metadata

• Author: Joel Greenblatt
• Publication date: 2010-09-07
• Link: amazon

Notes

From the summary video by The Swedish Investor. Length: 14min.

08:17:

10:10:

Strategy:

• Define your investing universe (list of companies that you have interest in). For example 10 companies in VN30
• Rank them by 2 conditions
  • low PE (1 for lowest PE, 10 for highest) and
  • high ROA (1 for highest ROA, 10 for lowest)
• Sort their scores by ASC order since you want the total score as low as possible
• then invest in the top 5 companies of this sorted list.

11:40:

Thoughts

The pros of this investing framework:

• Simple, easy to replicate, proven back test with historical price data

Cons:

• this approach "comparison by multiples" is only suitable for the comparable companies. For example, companies in the same sector
• all criteria are treated equally.

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Children

1. Practice

Tags

1. topic.investment
2. cat.read

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Backlinks

• Practice