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3.76 AVERAGE
3.76 AVERAGE
informative
fast-paced
This is a fantastic read. It's short and succinct. I like that Joel uses humorous writing to make something accounting less boring.
In a net shell, he is promoting a strategy he calls "Magic Formula Investing". Building on the time-tested strategies of Ben Graham and Warren Buffet, Joel tells us to invest in companies that return very high return on capital AND high profit per share.
He also sets the right expectations, by providing enough data to prove that it works (mostly), and that it works if you have patience. He also wants us to know that investing in individual stocks is not for everyone (surprise. Graham and Buffett have said the same).
After some digging, I found that Joel has his own mutual fund with holdings chosen using the Magic Formula: https://www.google.com/finance?q=MUTF%3AFNSAX&ei=r0p4VqGYLKrBigKd47eADw
The fund has returns 18%+ over 3-year period, beating the market.
Formula:
1. Return on Capital = EBIT / (Net working capital + net fixed asset)
2. Earning yield = EBIT / Enterprise Value
In a net shell, he is promoting a strategy he calls "Magic Formula Investing". Building on the time-tested strategies of Ben Graham and Warren Buffet, Joel tells us to invest in companies that return very high return on capital AND high profit per share.
He also sets the right expectations, by providing enough data to prove that it works (mostly), and that it works if you have patience. He also wants us to know that investing in individual stocks is not for everyone (surprise. Graham and Buffett have said the same).
After some digging, I found that Joel has his own mutual fund with holdings chosen using the Magic Formula: https://www.google.com/finance?q=MUTF%3AFNSAX&ei=r0p4VqGYLKrBigKd47eADw
The fund has returns 18%+ over 3-year period, beating the market.
Formula:
1. Return on Capital = EBIT / (Net working capital + net fixed asset)
2. Earning yield = EBIT / Enterprise Value
funny
informative
lighthearted
medium-paced
informative
fast-paced
informative
fast-paced
funny
informative
Some interesting concepts but in terms of a strategy it’s utterly useless for the average person because of the sheer complexity of execution.
hopeful
informative
lighthearted
fast-paced
A terrific and very short vision of investing marred only by the author's juvenile sense of humor. But if you can't be funny in your own book, where the hell else can you? If it makes me money, he can make all the bad jokes he wants. A bit more detail on the details would be nice, too.
Greenblatt's "magic formula investing" sounds like a scam. But the way it's presented is surprisingly credible, and it has seemingly worked well enough for some people. However, the book didn't sway me enough to actually invest money this way, and I'd advise other people to use more conventional strategies as well.