Value Investing - Book review "The little book that beats the market"

I had recently finished reading "The little book that beats the market" by Joel Greenblatt.

It was a pretty fun and easy read considering I don't have any financial background.

I will summarize what i have learnt from this book below.

1) The stock market is crazy and the prices of stocks will swing wildly depending on short term emotions of people.

2) When you invest in the stocks market, you are buying a piece of a business. Not just a stock ticker where you bet if the price will go up or down.

3) To beat the market, you will have to buy a basket of good businesses at cheap price (around 20 to 30 businesses)

4) Good business = High return on capital (approximately > 25% ROA)

5) Cheap price = high earning yield (Lowest P/E ratio)

6) Repeat yearly and be patient.... very patient

That's it. Easy. The book even detailed step by step instructions on how to invest to beat the market. But like the steps to losing weight, easy but difficult as hell to stick to.

I strongly encouraged any value investor pick up the book to read. I'm pretty sure you will gain a lot of insights from it.

(PS: I did a screen of all companies with ROA > 25% in SGX with Unclestock and i found that there are only 12. Not enough to form a basket of 20 to 30 stocks. Seems like the criteria in the book is more suited for the US and not Singapore

I did a backtest on Joel Criteria with Unclestock and it only returned 12%. I did the same backtest on the criteria i have and it returned 28%. I guess you will have to find suitable measurement of "Good business" and " Cheap price" in your respectively market.)