The Big Secret for the Small Investor: A New Route to Long-Term Investment Success Hardcover – April 12, 2011

If you are new to investing or have been burned by your own actions or those of your managers, this book is likely to be useful to point out the specific conditions that make the markets and money managers' interests not line up with yours. It also quickly summarizes a simple but on-point method of evaluating companies and whether their stock is a good investment.But for anyone who has read Greenblatt's other books, this one is a severe disappointment. Here is my outline of the book:* Everybody selling you stuff in the financial area has incentives that don't line up with yours, so don't fall for their tactics* High return on capital and earnings yield identify good investments, on average* I have found a nifty new way to get good returns at low risk, but I'll only give you the 30,000-foot view* Whatever you do, don't get greedy (invest too high a percentage in stocks) or fearful (invest too small a percentage), especially in reaction to recent results* But there is nothing you can do with this information since a) it's impractical to do yourself, b) I didn't give you enough information anyway, and c) there are no products available that use my methodCross referencing back to previous books (especially The Little Book That [Still] Beats the Market) could help more technically minded investors derive the return on capital and earnings yield formulations (they are not straightforward). But I am at a loss to understand how a novice investor would use any of the information in this book, aside from avoiding bad money managers (which I suppose is worthwhile, but isn't the apparent point of the book).All in all this reads like a book thrown together from pieces here and there and not finished. It's choppy and incomplete, and varies a great deal in tone and intended audience from one passage to the next.Entirely unexpectedly poor quality from someone as good at what he does.

I would recommend this book to all readers, both individual and professional investors, who seek to achieve relative out-performance. While the proposed solution is most suitable to passive investors, the principles and investment framework are equally of value to professional money managers (although the latter may further benefit from reading Greenblatt's earlier works)."The Big Secret" is a simple and relatively concise view into exactly why the majority of active managers underperform the market averages over time, net of fees; and why disciplined adherence to the proposed solution will likely result in significant out-performance by the small investor. The professional money manager will be equally well served by reviewing the insights into the greatest stumbling blocks obstructing the path to successful money management (as well as suggestions for surmounting and avoiding those obstacles).The explanation of what makes the value approach work is coupled with the necessary insight into behavioral finance, which together provide one with the necessary perspective for successful money management. It is these very insights into the practical difficulties of money management, as well as into behavioral finance, which virtually ensure the proposed solution will continue working over time; in addition to why it will likely remain "a secret".

Most reviews covered this book pretty well. Basically, it's very short, and it's very to the point. This book is definitely geared at someone who wants to know how they should invest their money but are not into investing and don't want to do the analysis work themselves. There's not a lot of analysis here, except for a few summary tables that show the historical back-tested returns of his strategy. He also openly admits that his past couple books might have been too much work for many readers.The only weird thing about this book is that he tries really hard to describe why his last two books might be too complicated for some people. He does this by describing DCF and other investment concepts and then explaining why those concepts are hard. Well... if the reader is a novice, I have a feeling they'll be confused by this discussion. In other words, this book might appear to be geared toward a novice, but I suspect that only the "intermediate" investor who doesn't want to really invest on his own will really get it. If this describes you then this book is for you, and the fact that it's short and to the point should probably be perfect for you. And if you're a novice who's open minded who doesn't want to do any more research than this (and who's willing to gloss over the DCF stuff), this book is perfect for you too.Note that he doesn't plug his new mutual funds ANYWHERE in the book. (His firm has new funds that apparently invest based on his 'magic formula' method from his last book.) He does provide a new website that he created to go with the book, but even there you have to click through some tabs before you get to his fund. I'm almost surprised he buried them so deep, but I guess he didn't want to make this a plug for his funds.All in all pretty good. I'm a bit of an investing geek so I would rather try some of the tips in his previous books, but if you really don't want to do that then this, I think, is the only real alternative method of investing.

This book is actually better than Joel's previous two books as the advice is actually quite sound. The problem is that there are really only about 4 pages of "actionable" advice in the book. As an example he spends the first 49 pages talking about estimating earnings and growth rates of companies and then on page 50 says "not to bother." After that he spends another 60 pages building up to one actionable recommendation on page 110! What a waste of a lot of trees! If you want the whole synopsis of the book just read the 6 page Appendix. At least Joel's books are going in the right direction!

Every investor should read this book. First, because Greenblatt is a wonderful writer. Second, because in this book he explains that although he believes in tenet of value investing ("figure out the value of something, then pay a lot less"), in practice this is somewhere between extremely difficult and impossible - at least, for a single company.The key way to value a company is to sum all of the expected earnings over its lifetime, then discount these back to current dollars. But this is essentially a load of guesses; worse, tiny changes in our guesses can result in wildly different estimates of value. We could use alternative methods of valuation e.g. relative value, but these have equally fatal flaws.So if you are value investor, and have lots of books telling you invest in single stocks via cashflow calculations - you really should bin those books and stop "investing" this way (my conclusion, not his). Because you're "investing" based on guesses, which means you're "investing" using luck. If you are investing in funds where the fund manager does these calculations for you, you are also being unsound because these funds are also investing using luck, because the professional fund manager has to make the same guesses.He also tells us that indexes based on market cap will systematically buy too much of overpriced stocks, and too little of underpriced stocks; so really we should be using equal weight indexes rather than market cap indexes.You'll have to read the book to find out his "secret" for the small investor i.e. how to solve the riddle of how to do value investing without buying stocks based on guesses wrapped up as precision calculations; and how to do better than just buying a market-cap index (S&P, Nasdaq, FTSE, ...). But be warned about the dangers of valuing companies. Maybe this explains the genius of Warren Buffett, as he clearly does know how to value individual companies.

Joel Greenblatt is an investment genius who has distilled powerful, value investing concepts into a simple formula and detailed plan that anyone can understand and use to make money on the stock market. He even deals with the psychological barriers that cause most people to fail, even when they are conversant with the correct approach. All this is covered in The Little Book That Beats The Market, published in 2006.I was expecting something new in The Big Secret for the Small Investor, but the truth is that Joel is really re-iterating the same advice he gave in his earlier book. Admittedly, he goes into much more detail about why it is virtually impossible for anyone, including the professionals to accurately value companies, with a view to buying them cheap, together with other interesting peripheral information. But ultimately, his final recommendations for the small investor are based on the same fundamental information that he gave us in the earlier book. But that's not the worst of it. In the introduction he promises that this book will provide a solution for those who want to be hands off, allowing others to do their investing for them - but this solution never materialises and we are simply left with the vague idea that we need to construct our own value weighted index portfolio, without any detailed instructions how to do this. To be fair, it is possible to adopt some of the ideas he mentions via investment products that are available in today's marketplace - but these ideas are not those which he considers to be the best option! If I hadn't read the earlier book, I might be thinking that I had at least learned some valuable information - even if I wasn't quite sure how to implement an investment strategy based on it. But because I have read the earlier book, I'm just disappointed.

Very interesting book. Very easy to read for beginners too.

Somewhat repetitive of previous books from the same author.

because they were too busy just pushing adverts/marketing so we would continue being suckered...I am only in the early part of the book,but it has already given me much clarity & understanding of how it all works...Complementary to this,please read "Attack of the 50 Foot Blockchain"and, i think it is called"The Most Important Thing, Illustrated",which is on /value/-investing ( like Warren Buffet )To the author:Thank You!No-one else clarified the true-fundamentals so well as you are doing in the early part of this!( I am working on literally hundreds of books,just pushing through more of whichever it is that matters most /right now/, so it may be awhile before I finish any specific book,but will update this review later : )Namaste, eh?

The book provides a good framework for the small investors who cannot do research on their own. It tells how valuation is a difficult task, the difficulty faced by active find managers and how they are tied up by clients measuring performance in short term, the issues with the market cap weighted index funds. It also tells about what the small investors can do different, What to do when markets fall and rise.The book is a short one and is direct and simple.Its written for the common small investor who doesn't know much about finance.Over all good book.One con from India perspective is I am not sure whether funds like he has suggested are available in India.

You're better off by buying a Vanguard fund than by buying this book which is a piece of unreliable fluff.To suggest to the reader to buy a "value weighted fund" which is supposedly outperforming the cap-weighted S&P over time (spoiler alert: wishful thinking as it did not over the last 10 years) is mildly irritating if not misleading. The rest of the book's message is simple: don't trade, if you don't know what you're doing and if you think you do, you're wrong. This is probably good advice for newbies but then again newbies to the markets and investing wouldn't know who Greenblatt was in the first place. I was expecting better, Mr. Greenblatt... How disappointing. Two stars for some minor bits of eternal wisdom.

Demasiado repetitivo. Se va mucho por las ramas, tanto que parecería que el autor sólo escribió palabras suficientes para poder rellenar el libro con capítulos aburridos con el único fin de hacer un libro en lugar de un artículo decentemente largo pero interesante.No me malinterpreten, yo admiro y sigo el trabajo de Greenblatt pero este libro podría haber sido mucho más corto sin perder el mensaje esencial, el cual es comprar ETFs indexados y ponderados por Valor (Value Weighted Index) ya que son mejores que los índices de capitalización y nos ahorra un montón de problemas.No entiendo por qué la gente quiere estirar tanto una idea simple para escribir todo un libro sobre el tema, en lugar de escribir un artículo bueno, interesante y no-aburrido.

The Greenblatt book to read is The Little Book that Beats the Market, not this one. I got The Big Secret in the expectation it would add fresh refinements to the so-called magic formula. It does nothing of the sort: the 'secret' unveiled here is merely that managed funds underperform the market. What's new? In fact, the book would fit in a 1,500 word blog entry, including the recommendations of value-indexed funds at the end. It seems the reason Greenblatt chose to write this is that even the Little Book proved too complicated for some investors. If so, the author himself finally looses patience with them, going so far as to call his reader an 'idiot' (page 112). Read the Little Book, a great vulgarisation work in itself. If that is too complicated, the stock market simply is not for you.

Backtesting with few other criteria would've been useful. Otherwise, Greenblatt gets to the essence of sound investing principles as he usually does with his books. Would read anything he writes; hope he writes more books in the future without fear of getting a bit technical as his first book ("You can be a stock market genius").

Simply, I liked it.Different to his previous books, market genius and the little book that beats the market (blue book).Explains why hedge funds and investment managers, or ETFs continue to underperform long term minded investors. It all goes back to ben graham and dodd's ideas, it seems.

I am first time reader. The book with brief and terse language has surpassed the majesty of thoughts and styles. I intend to read chapters 6-9 again and again.Highly Impressive book on stock market.

I am a fan of Joel Greenblatt and have always enjoyed reading his books. This one is no exception. I would recommend this book to anyone who is new to stock investing. If you have already had some experience, his another book "You Can Be a Stock Market Genius" is definitely better. (Except for the title, that book is amazing.)

Joel Greenblatt did it again! Insightful, funny and easy to understand. I recommend this book to everyone who are looking for a smart and sensible way to invest!

Book on CD is awesome it would have taken me forever to read this but I have listened to it twice in the truck and it's been great. There is a lot of good information in here. I wouldn't make it the only investment book/CD that you get but it does provide good information.