I will start a new feature today. I will review an investment book and give the highlights as well as how to apply their wisdom in today’s market. I will also include helpful tools like Internet resources, excel sheets, and programmed indicators and strategies.

Joel GreenBlatt How to be a stock Market Genius

We start with a book about different strategies to capture hidden profits in unique stock situations. It’s called How to Be a Stock Market Genius by Joel GreenBlatt. He ran Gotham Capital and includes a performance table with average yearly returns of 50%.

His trading axioms include

1. Pick you spots . Look for unique situations to ramp up your returns. It is similar to the Ted William’s approach to hitting. Get to know your strike zone and hit any good pitches in your zone to maximize your returns
2. The past doesn’t measure your real risk. Use the past as a yardstick but be very wary of using that a your risk possibilities. The black swan, an unforeseen event with massive impact, is always possible.
3. Use different approaches. He employs the Mr Market theory from Benjamin Graham. The Market will present many opportunities so be ready when a bargain falls in your lap. It may not be from the usual path.

In part 2, we look at his first proposed niche, Spinoffs.