Little Book That Beats The Market (incredible results) 1 Year Update

TL;DR

A year-long investment in Joel Greenblatt's book "The Little Book That Beats the Market" yields impressive returns and highlights the importance of sticking to a value investing process.

Transcript

welcome back to everything money it's seth and paul your two best pals we're glad you joined us today if you're scouring youtube for videos on this book the little book that beats the market or the little book that still beats the market by joel greenblatt you've come to the right place because i just spent the last year of my life invested in this... Read More

Key Insights

• 💓 Following a value investing process, as outlined in "The Little Book That Beats the Market," can yield impressive returns.
• 🤩 The book focuses on two key attributes, earnings yield and return on capital, for selecting stocks.
• 💋 Sticking to the value investing process, even during market euphoria, is crucial for long-term success.
• 🛀 Backtesting value metrics has shown consistent outperformance of the market over 20 years.
• 🔇 The speaker's personal experience of significant returns highlights the potential benefits of following the book's process.
• ❓ The importance of patience and discipline in value investing is emphasized.
• 🪡 The Little Book strategy can be implemented through a process-driven approach without the need for constant monitoring.

Questions & Answers

Q: Why did the speaker suggest "The Little Book That Beats the Market" to the audience member?

The book provides a process-driven approach to value investing, making it accessible for individuals who believe in value investing but lack the time for in-depth research.

Q: How does Joel Greenblatt rank the 3,500 companies he looks at?

Greenblatt ranks the companies based on their earnings yield and return on capital, adding the ranks together. The lowest 30 ranks are selected for investment.

Q: How does the speaker's return compare to the market's return after following the book's process for a year?

The speaker achieved a return of nearly 49%, beating the market's return of 44% by 20%.

Q: Why does the speaker emphasize the importance of sticking to the value investing process?

The speaker believes in the long-term effectiveness of value investing, and although short-term fluctuations may occur, sticking to the process can lead to significant returns over time.

Summary & Key Takeaways

• The content discusses the success of using the value investing process outlined in Joel Greenblatt's book. It emphasizes the importance of two attributes, earnings yield and return on capital, in selecting stocks.

• The speaker shares their personal experience of following the process for a year and achieving significant returns.

• The video highlights the importance of sticking to the value investing process, even during market fluctuations, and the potential long-term benefits it can bring.