Greenblatt's Little Book That Beats The Market Message Board

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Strategies & Market Trends : Greenblatt's Little Book That Beats The Market

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To: David Bogdanoff who wrote (65)	2/7/2006 7:54:15 AM
From: Stewart Whitman	of 218

Does Greenblatt's method make allowances for different industries wrt macroeconomic trends? No. It does recommend you eliminate choices like financials that are more interest rate sensitive and focus on services or manufacturers. Is it logical to have one formulaic set of criteria apply equally to all industries and sectors? Perhaps. In as much as every business can be represented by its trailing twelve month's balance sheet and income statement, and every business has capital requirements, and every business attempts to produce an operating profit, and every business uses its profit to expand or returns its profit to investors in some efficient manner, and you should buy business that are better when they are cheap, then it is logical. If you buy the 20 or 30 top choices, at least right now, it seems like you are getting a relatively diverse set of stocks. Though I can't say what the choices were in the past. If you use it as a screen, then the question becomes less "is it logical" and rather "is it a good starting point". So far, it seems reasonable, especially for stocks with larger capitalization.

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