MICHEL PIREU: Joel Greenblatt has stunningly simple secret for the small investor
Build your own portfolio of cheap and good stocks or invest in a value-weighted index fund
Beating the market is very difficult. Most of us won’t. The solution is to learn a few simple concepts. Joel Greenblatt, the founder of Gotham Capital and adjunct professor at Columbia University’s Graduate School of Business where he teaches value investing, has published several books on the subject. The Big Secret for the Small Investor: a New Route to Long-Term Investment Success, published in 2011, was described by the Financial Times as "the best book on the subject in years". Prof Bruce Greenwald at Columbia Business School said it provides "the finest simple distillation of modern value investing principles ever written". "It should be mandatory reading for all serious investors from the fourth grade up," says Greenwald. So, by way of helping in that regard, here is a curt summary of its main tenets: Even if the efficient market hypothesis is not true, beating the market is very difficult. Most of us won’t. The solution is to learn a few simple concepts. But while most of us...
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