You Can Be a Stock Market Genius by Joel Greenblatt – Book Review by Mitchell Mauer
This article appeared first on The Stock Market Blueprint Blog.
Not What It Appears To Be
Stone House Capital Partners returned 4.1% for September, bringing its year-to-date return to 72% net. The S&P 500 is up 14.3% for the first nine months of the year. Q3 2021 hedge fund letters, conferences and more Stone House follows a value-based, long-long term and concentrated investment approach focusing on companies rather than the market Read More
If there is ever a book that should not be judged by its cover, You Can Be a Stock Market Genius is the one.
First, the flashy title suggests a book filled with the hype of a too-good-to-be-true sales pitch. Second, the overly simplistic promise of the title gives the impression the book is for beginner investors.
Neither indication is an accurate assessment. Rather, the book provides experienced individual investors ideas to add unique and profitable positions to their portfolios.
You Can Be a Stock Market Genius – Special Situation Investing
Gotham Capital founder, Joel Greenblatt — who is better known for his more popular publication The Little Book That Beats the Market — sophistically documents the strategies of special situation stock market investing.
The advanced level investment approaches discussed are: Spinoffs, Rights Offerings, Risk Arbitrage, Merger Securities, Bankruptcies, Recapitalizations, Stub Stocks, LEAPS, Warrants, and Options.
With the exception of Risk Arbitrage, all of these special situations are encouraged by Greenblatt as being opportunities to “beat the pants off the market.”
Examples Are Worth A Thousand Words
To Greenblatt’s credit, he concisely and coherently defines every approach by clearly explaining the details of each situation. His extensive use of case-studies ensures readers are able to fully understand all the topics.
These real-world examples give average investors an opportunity to get inside the mind of a professional investor. In addition, Greenblatt’s corny but appreciated sporadic attempts at humor give a light-hearted feel to an otherwise serious read.
Greenblatt opens chapter 6 with the following statement: “So I told you about spinoffs in chapter 3. That information alone was worth the price of this book.” While this is true, it doesn’t take away from the valuable information offered throughout the rest of the text.
Read The Book, It’ll Make You Smarter
Even if an investor does not intend to implement any or all of the strategies discussed, understanding this information will prove beneficial to aspiring investors.
Though it would be wise for a beginner to obtain a foundational knowledge before reading, it’s safe to say You Can Be a Stock Market Genius is a terrific book with a terrible title.
Mitchell Mauer is the Founder of TheStockMarketBlueprint.com. The Stock Market Blueprint is a free site that finds value stocks for investors building long-term wealth. The site’s investment philosophy is anchored in principles established by Benjamin Graham and his most reputable followers over the last 100 years.