Book Review: You Can Be A Stock Market Genius By Joel Greenblatt

by: Mitchell Mauer

You Can Be A Stock Market Genius

Not What It Appears To Be

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.

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.

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