The Little Book That Beats the Market
EBIT/(Net Working Capital + Net Fixed Assets)
Joel Greenblatt • The Little Book That Beats the Market
as stocks in our portfolio reach the one-year holding mark, we will replace only the 5 to 7 stocks that have been held for one year.
Joel Greenblatt • The Little Book That Beats the Market
first year of investing. That means adding 5 to 7 stocks to our portfolio every few months until we reach 20 or 30 stocks
Joel Greenblatt • The Little Book That Beats the Market
don’t want to buy all 30 stocks at once.
Joel Greenblatt • The Little Book That Beats the Market
For taxable accounts, we will want to adjust that slightly. For individual stocks in which we are showing a loss from our initial purchase price, we will want to sell a few days before our one-year holding period is up. For those stocks with a gain, we will want to sell a day or two after the one-year period is up. In that way, all of our gains
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the magic formula works on average,
Joel Greenblatt • The Little Book That Beats the Market
20 to 30 stocks at one time.
Joel Greenblatt • The Little Book That Beats the Market
where you invest a relatively small amount of money, earn a reasonable rate of return over time, continually reinvest all the earnings from those investments, and end up with a large amount of money.
Joel Greenblatt • The Little Book That Beats the Market
know how to evaluate businesses and project normal earnings several years into the future,