KhizooologyThe Little Book That Still Beats the Market
A formula still needs judgment about its limits.
Big Idea
Greenblatt proposes combining a measure of business quality with a measure of price to identify potential stock investments.
Think Like an Owner
A stock represents part of a business whose future profits and uncertainties matter.
Quality of the Business
Return on capital compares operating earnings with the capital needed to produce them.
Price of the Business
Earnings yield compares operating earnings with the price paid for the business.
Combined Ranking
The formula ranks companies on both measures instead of choosing only the cheapest or only the strongest.
Patience and Evidence
Historical tests can show long weak periods as well as success, and cannot promise future results.
Khizooo Take
Understand what each ranking measures and misses before confusing a simple formula with an assured outcome.
- Educational book ideas, not personalized financial advice or promised returns.
Remember
A backtest describes the past, not a contract with the future.