Monday, March 14, 2011

The Big Secret

New Book by Joel Greenblatt

I saw a note on the Yahoo message board that our hero has a new book coming out: The Big Secret for the Small Investor

Now for today's contest, and all my readers and followers must play! What do people think the big secret is? I think I know, but I will post it tomorrow so as not to influence everyone (maybe it is not to invest in Chinese stocks... ouch! China MediaExpress’s CFO Resigns; Auditor Quits, Calls for Investigation).


Homer315 said...

Value index funds?

Invest in the MF mutual fund?

Quit investing and try your hand at writing investment books instead?

Stephen said...

I'll say that he reveals a third or fourth factor to the current two factor Magic Formula strategy.

AndrewsDad said...

I am going with additional factors to MFI also. Something along the lines of momentum, touching on what Marsh recently said about the streakiness of MFI performance. Maybe buying stocks new to the MFI list because of recent financials or they now have a market cap of 50M.

Then the book will end with, guess what, you can do all of these great things through Formula Investing.

Homer315 said...

If he really does add more "factors" to the MFI strategy, then my opinion of him will decrease further. To be clear, I think his first book was great, and helped me tremendously in my investing career. His MF book is also a good book I think, but he has been pimping his MF mutual fund for a while now, and he just recently put out the sequel to the MF book, so for him to write essentially a third book adding some more factors regarding MF investing would make me think he's just stringing people along trying to make more money off his books. I find it hard to understand why he would do this given his financial success.

Marsh_Gerda said...

You guys are pretty funny. I think the big secret will be one of two things, or perhaps a combination:

(1) common sense
(2) reading sec filings


CLJACKSON04 said...

I would say:

The optimal sell point (rather than holding for 1 year)

A better way to value stocks rather than EBIT/EV (DCF?)

A third factor involving debt

Adopting a Long Term mindset.

CLJACKSON04 said...

I just read it this is virtually worthless. Greenblatt has just taken a major step backward.

Basically-there is a new type of indexing that beats the market by 2-3% a year called fundamental weighted indexes. For more info:

Another this is the writing is very discordant and rambling...most of the time aimless. Don't get your hopes up.

Paul said...

Greenblatt let the cat out of the bag.

Using a Value Weighted Index for a basket of 800-1000 stocks.