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 9:01:09 PM
From: Shane M	Read Replies (1) of 218

Does Greenblatt's method make allowances for different industries wrt macroeconomic trends? Like others have said, no special consideration other than exclude financials, utilities, and ADRs. = = = One of the biggest problems I'm having is his urging at the end of the book to just believe that it works without wanting a better understanding of why it works. He didn't even walk through one real life example of why he thinks companies like this are great investments, or discuss some of the confusion with the ROC calc. Why not use a more traditional return on total capital calc instead? When some ROC calcs are coming back over 100% (or over 1000%) something needs explaining. Very small denominators are possible. I've got the older book just now from the library and hope it explains some things better. I'm also going to look at Stew's recommendation to add some other assets to the denominator of the ROC calc to see if it makes a difference. I just don't see why the difference in current assets less liability should be central to the ROC result when there's so much more to consider. Shane

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