Author, hedge fund manager, writer, and educator Joel Greenblatt is one of today’s most influential value investors.
Greenblatt has written acclaimed works on investing, including The Little Book that Beats the Market, The Big Secret of the Small Investor, and You Can Be a Stock Market Genius. Admirers of Greenblatt’s writings include investing legend Seth Klarman.
One of the best ways to understand Greenblatt’s philosophy and strategies is to read the books he recommends. Those books reveal the ideas and insights that shape Greenblatt’s thinking and guide his management of Gotham Funds.
1. One Up on Wall Street by Peter Lynch
How to Use What You Already Know to Make Money in The Market
Legendary fund manager Lynch describes his stock-picking methodology in this classic. Lynch shows how you can make money by investing in companies that make products you use every day.
Lynch offers a simple value investment strategy that any person with little knowledge or experience of the markets can use. A person who loves her iPhone could buy Apple (NASDAQ: AAPL) stock, for instance.
Lynch’s philosophy is that opportunities for moneymaking investments are all around us. Lynch also thinks most people know enough about some subjects to be successful investors. Most people, however, ignore those opportunities.
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2. University of Berkshire Hathaway
30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting
This book reprints and retells many of Buffett’s classic writings, including some of his famous letters to Berkshire Hathaway (NYSE: BRK.B) shareholders.
In the essays, Buffett offers investment advice in plain English on such subjects as regulated industries, investing opportunities, market valuation, popular opinion of the market, financial crises, housing bubbles, acquisitions, and corporate governance.
Greenblatt admires this book because it offers a deep insight into Buffett’s thoughts, philosophy, and methodology. Those who want to learn Buffett thinks and invests can learn a great deal from this book.
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3. The Big Secret for the Small Investor by Joel Greenblatt
A New Route to Long-Term Investment Success
Greenblatt’s guide to value investing is widely admired by some of today’s top value investors, including Michael Price and Andrew Tobias.
Greenblatt distills modern value investing principles for a mass audience. This is the book to read if you want to learn and understand Greenblatt’s philosophy and strategies.
He explains to everyday investors how to value a business and why the small investor has an inherent edge over the big investment firms that have to show results month by month, quarter by quarter, year by year.
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4. The Intelligent Investor by Benjamin Graham
The Definitive Book on Value Investing. A Book of Practical Counsel
Zweig’s 2006 update of Graham’s 1949 classic is an important resource for value investors in today’s world. Zweig rewrites Graham’s lessons with modern examples.
If you read one value investing book, this version of The Intelligent Investor should be it.
Anyone who wants to learn what value investing is and apply it in the modern world needs to consult Zweig and Graham.
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5. The Little Book That Still Beats the Market by Joel Greenblatt
This 2010 update of a 2005 classic distills Greenblatt’s strategies and philosophies for ordinary people.
The original Little Book introduced Greenblatt’s famous “Magic Formula” to a mass audience. This edition redefines the Magic Formula for the post-2008 Financial Crisis markets.
The Little Book is a step-by-step guide to value investment in the modern markets. Greenblatt shows how to apply value investing formulas to contemporary investments in bull and bear markets.
If you need a good introduction to value investing in modern markets, The Little Book is a tremendous resource. Plus, The Little Book offers a great introduction to Greenblatt’s thinking.
Joel Greenblatt also features in our All-Time Top 20 investment Books List.
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6. What Works on Wall Street by James O’Shaughnessy
The Classic Guide to the Best-Performing Investment Strategies of All Time by James O’Shaughnessy
O’Shaughnessy offers a basic guide to investment strategies that explains how the professionals invest. If you want to understand such concepts as EBITA, price-cash flow, dividends, shareholder yields, market capitalization, and price-to-earnings ratios, What Works on Wall Street is the book for you.
Greenblatt recommends What Works on Wall Street because it introduces investment strategies and concepts for ordinary people. If you want to begin investing, What Works on Wall Street is a great book to start with.
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7. The Only Investment Guide You’ll Ever Need by Andrew Tobias
Greenblatt considers this book a good introduction to the basics of investment written for ordinary people. Tobias offers simple explanations of important investment concepts, including minimal risk, tax strategies, skepticism, planning, and decision making.
Tobias’s work is still one of the best investment books for ordinary people around. The basic strategies Tobias offers can help any investor survive and make money in a complex market.
8. The New Finance by Robert A. Haugen
Overreaction, Complexity, and Their Consequences
This textbook is one of the best introductions to behavioral finance and basic value investing philosophy around. Haugen exposes the inefficiency and dangers of markets by explaining how their weaknesses.
Anybody who wants a good understanding of modern markets and Behavioral Finance Theory needs to read The New Finance. If you want to understand value investing’s academic basis, The New Finance is a great resource. The latest editions include two chapters on the stock volatility after the Great Financial Meltdown of 2008.
9. Value Investing: From Graham to Buffett and Beyond
Bruce C. N. Greenwald, Judd Kahn, and Michael van Biema
A history of value investing that introduces readers to the top minds in value investing and their theories. Lead author Greenwald teaches value investing at Columbia Business School in New York.
Greenblatt considers Value Investing a valuable resource because it contains case studies of the value investment masters’ techniques and strategy. This book is a must-read because it is an academic analysis of value investment and a great introduction to the markets for serious investors.
10. Money Masters of Our Time by John Train
Greenblatt recommends Money Masters because it examines some of the greatest investment wizards of our age and their strategies.
Train’s “Money Masters” include George Soros, Warren Buffett, Jim Rogers, and many investors ordinary people could be unfamiliar with. Train shows how and where the Money Masters get their information and their criteria for investments.
If you want to learn from the great investors our time, Money Masters is an important book.
11. The New Contrarian Investment Strategy by David Dreman
Dreman explains the basics of contrarian investment in this modern investing classic. Greenblatt admires The New Contrarian because it teaches investors to distrust the market.
Dreman’s most interesting recommendation is to buy below-average stocks for which you have low expectations when they trade at a good price. The theory behind this belief that you will lose less money if you invest in good low-priced stocks.
If you want to understand contrarian investment Dreman’s writing is a good introduction. Those seeking a new investment strategy can learn from Dreman.
12. Security Analysis and Business Valuation on Wall Street by Jeffrey C. Hooke
A Comprehensive Guide to Today’s Valuation Methods
Hooke rewrites and refines Benjamin Graham’s classic value investing strategies for the 21st Century. Greenblatt finds Security Analysis and Valuation valuable because it offers contemporary real-world security analysis examples in the modern stock market.
Hooke introduces such major market players as private equity funds, hedge funds, mutual funds, institutional money managers, and investment banks. If you want a guide to the modern investment markets, this book is an excellent resource.
13. Contrarian Investment Strategies by David Dreman
Dreman presents four important contrarian investment strategies in this classic from 1999.
Important insights Dreman offers include investors’ tendency to overvalue the best stocks and undervalue the worst stocks. Dreman thinks this tendency leads to price surprises in the markets.
Dreman’s strategy is based on the belief that investors always react to market changes. Investors sell stocks fast in bear markets and buy quickly in bull markets, for example. This overreaction is why investors are caught by surprise when the market rises or falls.
Dreman’s major recommendation is to buy good stocks when they are out of favor with the market. Contrarian Investment Strategies is a good explanation of a basic value investment strategy and behavioral investment.
Summary
Joel Greenblatt is one of the most interesting value investors in today’s world. Greenblatt manages $4 billion worth of assets under management at Gotham Asset Management. Yet Greenblatt has taught value investment at Columbia Business School for over 20 years.
Anybody who wants to understand contrarian and value investing needs to study the books on Greenblatt’s reading list. Understanding the connection and contrasts between value and contrarian investing strategies can help you devise an effective investment strategy that works for you.
If you want to create an investment strategy, Joel Greenblatt’s book recommendations can be a great resource. A good reading list is the first tool a value investor needs in his or her toolbox.
Sources
Columbia University MBA Course Reading List
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Hi,
I am the editor of University of Berkshire Hathaway.
To hear Joel Greenblatt recommend our book is a great thrill.
Can you tell me the source of this recommendation? I’d love to find out where it came from.
Thanks!
Hi Austin, thanks for the question. Yes the Warren Buffett Book is recommended in Joel Greenblatt required course reading at Columbia University. https://www6.gsb.columbia.edu/courses/syllabus/Value%20%26%20Special%20Situation%20Investment%20(Greenblatt,%20Yarsky)%20FA2015.pdf