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Either I read Greenblatt's books out of order or this entire book missed the main point of why I read it... to learn how to value companies.
The book adeptly described the difficulty of being accurate in valuations of a business and offered some ways of thinking about valuing a business relative to many factors that I personally would not have thought of. The book went into very interesting detail about why the small investor has a big leg up on hamstrung Wall St. mutual fund managers just seeking to keep their day jobs. He even describes different types of indexes that you can buy and sell as ETFs and how these perform at higher levels than market cap indexes.
In the end, with all this high level understanding and real depth of knowledge on the intricacies of investing, I was still left without the basic strategy of how to go about valuing a business. Annoyingly, he kept alluding to us having or him later explaining the actual way to perform valuations, but it never came.
In the end, I'm like a first time fisherman trying to land a marlin with a 20 lb deep sea rod, 200 lb test line, the best lure money can buy, with no clue how to reel the **** thing in.
12 of 12 people found this review helpful
Holy LORD this is bad ! Now I'm sure there will be some intellectuals out there that will spin his advice into a "Horoscope-Like" interpretation of how they can get their portfolio to perform better... but overall, this book tells you NOTHING!! In addition the author can't make his mind up on whether he wants to be "folksy" in his dispensing of info or an MBA throwing so much jargon at you that your head spins.
His whole premise is basically: Find Something; and Buy it for Less... But then goes on to talk about every way to determine a valuation (so that in theory you can buy it for less) and then says... yeah but that doesn't really work. Even his end advice... yeah big surprise here , invest in value mutual funds is flawed, because he pretty much admits that they will be up or down (depending on shear luck of the draw) but Never talks about how to determine if they're on the way up or down or over/under valued. Here's free advice.... There is No formula. Your best bet is to use the Bear Analogy.... If you and a buddy are getting chased by a bear, you don;t have to outrun the bear....just your buddy. Everyone is in the same crappy investment boat, as long as you hedge your bets and don;t go all in on freakin iceberg futures in Ethiopia, you'll be better off then the majority of people out there investing in lottery tickets every week. You Are Smarter Than This BOOK!!!
But I will say that the Narrator was pretty decent
2 of 2 people found this review helpful
unfortunately i found this book a bit of an example of a C grade student trying to get through their exams - dump everything down on paper you can remember and fail to reach any conclusions
I think the book can be summarised in:
investing is hard
it takes patience
you probably cannot beat the market so just buy a low cost index tracker
value stocks beat the market but due to going against the herd and tracking issues it will mess with your head
smaller stocks will have best opportunity as big players won't be fishing in that pond
It's a pity as Joel's other books are fabulous and the magic formula was revolutionary
1 of 1 people found this review helpful
What was the most interesting aspect of this story? The least interesting?
It presents key issues that are vital to understanding how collective investments work, their weaknesses and the true behaviours of fund managers. It steers people towards passive, cheaper, systematic investments in the form of ETFs and particularly the newer breed of 'smart beta' ETFs. However, whilst the journey was enjoyable and informative, they could have just skipped to that simple suggestion without the need for an entire book. But if you are new to investment then the ideas will not be lost, they will be valuable.
1 of 1 people found this review helpful
My favourite investor Joel Greenblatt has done it again and with the same narrator as previous books have made it enjoyable. I have followed his teachings and the returns I've made from less then $59 invested in his books is unbelievable.
Would you listen to The Big Secret for the Small Investor again? Why?
I would recommend this book as a great starting point for anyone looking to expand their knowledge on investing. Joel Greenblatt breaks it down into simple principles that are easily applied to the real world.