Discusses the secrets of profitable investment, explaining mergers, restructurings, and other lesser-known money-making opportunities

Alan C. "Ace" Greenburg Chairman of the Board, Bear Stearns Joel is my kind of guy -- very, very long on common sense. This book is great!

Autorentext

Joel Greenblatt is the founder and a managing partner of Gotham Capital, a private investment partnership that has achieved 40% annualized returns since its inception in 1985. He is a professor on the adjunct faculty of Columbia Business School, the former chairman of the board of a Fortune 500 company, the cofounder of ValueInvestorsClub.com, and the author of several books, including You Can Be a Stock Market Genius, The Big Secret for the Small Investor, and Common Sense. Greenblatt holds a BS and an MBA from the Wharton School.

Klappentext

An investment book that explains how to profit from mergers, bankruptcies, liquidations, spin-offs, and rights offerings.

Zusammenfassung
A comprehensive and practical guide to the stock market from a successful fund manager—filled with case studies, important background information, and all the tools you’ll need to become a stock market genius.

Fund manager Joel Greenblatt has been beating the Dow (with returns of 50 percent a year) for more than a decade. And now, in this highly accessible guide, he’s going to show you how to do it, too. You’re about to discover investment opportunities that portfolio managers, business-school professors, and top investment experts regularly miss—uncharted areas where the individual investor has a huge advantage over the Wall Street wizards. Here is your personal treasure map to special situations in which big profits are possible, including:

-Spin-offs
-Restructurings
-Merger Securities
-Rights Offerings
-Recapitalizations
-Bankruptcies
-Risk Arbitrage

Prepared with the tools from this guide, it won’t be long until you’re a stock market genius!

Leseprobe
Chapter 1
Follow the Yellow Brick Road --
Then Hang a Right
It doesn't make sense that a book can teach you how to make a fortune in the stock market. After all, what chance do you have for success when you're up against an army of billion-dollar portfolio managers or a horde of freshly trained MBAs? A contest between you, the proud owner of a $24 "how to" book, and these guys hardly seems fair.
The truth is, it isn't fair. The well-heeled Wall Street money managers and the hotshot MBA's don't have a chance against you and this book. No, you won't find any magic formula in chapter 8, and this isn't a sequel to How to Succeed in Business Without Really Trying, but if you're willing to invest a reasonable amount of time and effort, stock market profits, and even a fortune, await.
Okay: What's the catch? If it's so easy, why can't the MBAs and the pros beat your pants off? Clearly, they put in their share of time and effort, find while they may not all be rocket scientists, there aren't many village idiots among them either.
As strange as it may seem, there is no catch. The answer to this apparent paradox -- why you potentially have the power to beat the pants off the so-called market "experts" -- lies in a study of academic thinking, the inner workings of Wall Street, and the weekend habits of my in-laws.
We start with some good news about your education: simply put, if your goal is to beat the market, an MBA or a Ph.D. from a top business school will be of virtually no help. Well, it's good news, that is, if you haven't yet squandered tons of time and money at a business school in the single-minded quest for stock market success. In fact, the basic premise of most academic theory is this: It is not possible to beat the market consistently other than by luck.
This theory, usually referred to as the efficient-market or "random-walk" theory, suggests that thousands of investors and analysts take in all the publicly available information on a particular company, and through their decisions to buy and sell that company's stock establish the "correct" trading price. In effect, since stocks are more or less efficiently priced (and therefore, you can't consistently find bargain-priced stocks), it is not possible to outperform the market averages over long periods of time. Although exceptions (e.g., the January effect, small size effects and low price/earnings strategies) are covered briefly by the academics, most of these "market-beating" strategies are dismissed as trivial, transient, or difficult to achieve after factoring in taxes and transaction costs.
Since beating the market is out of the question, finance professors spend a lot of time teaching things like quadratic parametric programming -- which, loosely translates to how to pick diversified stock portfolios in three-dimensional space. In other words, if you muddle through complex mathematical formulas and throw in a little calculus and statistical theory along the way, you stand a pretty good chance of matching the performance of the popular market averages. Wow! While there are plenty of other bells and whistles, the message is clear: You can't beat the market, so don't even try. Thousands of MBA's and Ph.D.'s have paid good money for this lousy advice.
There are two reasons not to accept the basic teachings of the professors. First, there are some fundamental flaws in the assumptions and methodology used by the academics -- flaws we'll look at briefly later on, but which are not the central focus of this book. Second, and more important, even if the professors are generally correct and the market for stocks is more or less efficient, their studies and conclusions do not apply to *you.*
Obviously, most of Wall Street must also ignore the academics because the whole concept of getting paid for your investment advice, whether through commissions or investment advisory fees, doesn't square too well with the idea that the advice really isn't worth anything. Unfortunately for the professionals, the facts would seem to support the conclusions of the academics. If academic theory held true, you would expect the long-term record of pension and mutual-fund managers to equal the performance of the market averages reduced by the amount of the advisory fee. In a slight deviation from efficient-market theory, the professionals actually do approximately 1 percent worse per year than the relevant market averages, even before deducting their management fees. Does the theory that markets are "more or less" efficient explain this disappointing performance on the part of professionals, or are there other factors at work that lead to these lackluster results?
The Professional's Challenge
I spoke with a professional whom I consider one of the best in the business, a friend I'll call Bob (even though his real name is Rich). Bob is in charge of $12 billion of U.S. equity funds at a major investment firm. For some perspective, if you went to the racetrack and placed a bet with $100 bills, $12 billion would stack twenty World Trade Centers high (needless to say, a bet that would almost certainly kill the odds on your horse). According to Bob, the bottom line and the measure of his success is this: How does the return on his portfolio stack up against the return of the Standard & Poor's 500 average? In fact, Bob's record is phenomenal: over the past ten years his average annual return has exceeded the return of the S&P 500 by between 2 and 3 percent.
At first blush, the word "phenomenal" and an increased annual yield of 2 or 3 percent seem somewhat incongruous. Though it is true that after twenty years of compounding even 2 percent extra per year creates a 50 percent larger nest egg, this is not why Bob's returns are phenomenal. Bob's performance is impressive because in the world of billion-dollar portfolios, this level of excess…