A little book on investment

Joel Greenblatt was one of the founding partners of Gotham Capital which, as I found out later, was an enormously successful investment scheme and made over 40% a year for over two decades for its investor. He has come out with a new book called "A Little Book that Beats the Market".

A one sentence review would be: The book is marvellous.

A two sentence review would be: The book is marvellous. Go buy it now.

The book fundamentally teaches that owning stocks is really owning a business. It teaches some of the most important terminology found in financial reports of a company. Best of all, it demystifies the whole account book thing by starting with a simple example and making is more and more detailed as the book progresses.

That the book actually gives a mechanical investment strategy that also beats the market is indeed a bonus. The scheme, we are told and past history is given, is wildly successful. One does need quite a lot of money to get into it to make sure that trading costs don't offset the gains.

As an aside, in an age where everything is becoming DIY (Do it yourself) and most DIY kits come with instructions. Personal finance, in my opinion, is the most important DIY project most of us will ever undertake and unfortunately it is neither taught in schools nor is there a little instruction booklet. This "Little Book" however is a good start.