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The Big Secret for the Small Investor

The Shortest Route to Long-Term Investment Success
Narrated by: Adam Grupper
Length: 3 hrs and 9 mins
4 out of 5 stars (36 ratings)

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Summary

When it comes to investing in the stock market, investors have plenty of options:

  • They can do it themselves. Trillions of dollars are invested this way. (Of course, the only problem here is that most people have no idea how to analyze and choose individual stocks. Well, not really the only problem. Most investors have no idea how to construct a stock portfolio, most have no idea when to buy and sell, and most have no idea how much to invest in the first place.)
  • They can give it to professionals to invest. Trillions of dollars are invested this way.(Unfortunately most professionals actually underperform the market averages over time. In fact,it may be even harder to pick good professional managers than it is to pick good individual stocks.)
  • They can invest in traditional index funds. Trillions of dollars are also invested this way.(The problem is that investing this way is seriously flawed--and almost a guarantee of subpar investment returns over time.)
  • They can read The Big Secret for the Small Investor and do something else. Not much is invested this way. Yet....

Let top hedge fund manager, Columbia business school professor, former Fortune 500 chairman and New York Times best-selling author Joel Greenblatt take you on a journey that will reveal the Big Secret for both individual and professional investors. Based on path-breaking new research, find out how anyone can beat the market, the index funds and the experts by following a new approach that relies on the principles of value investing, common sense and quantitative discipline. Along the way, learn where "value" comes from, how markets work, and what really happens on Wall Street. By journey's end, small investors (and even not-so-small investors) will have found their way to some excellent new investment choices.

©2011 Joel Greenblatt (P)2011 Simon & Schuster
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still wondering where the secret is

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

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Good introduction to some key truths

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.

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trite

This book is written in the worst kind of bucolic cheesy American folksy style.
If you know a little about investing then this book is too simple for you .. if you are totally unknowledgeable then stick to experts or safer forms of investment.