You Can Be a Stock Market Genius has handsomely exceeded my expectations, not because of how short the book is (yes, it is a quick read) but because of how good its messages are. Joel Greenblatt compounded his fund at 50% a year for about ten years before returning all external capital in 1995. Surely, there is something to be learned from Joel’s book. Here we go.

Understand people’s motives

The word “motive” / “motivation” appeared at least 10 times throughout the book, while accounting-oriented fundamental analysis did not make an appearance until the second last chapter. It is not that proper accounting computations are unimportant but that for successful investing, a human understanding of the other humans in the same market is terribly important as well. That, I think, was a key message that Joel was communicating. In analyzing spinoff situations, Joel wrote, “analyzing the actions and motives of insiders … is of particular benefit.”

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Disclaimer: given the uniquely notorious reputation surrounding the book and the author, I want to make it clear that, in this article, I am not commenting on the morality of the book nor the author — I have zero intention in writing or implying anything in that regard.

Recently, I got a chance to read The Prince — the remarkable yet controversial book by Niccolò Machiavelli. Many people hold extremely negative views about the book and its author. Others see the book as one of the most influential works for modern political philosophy. I didn’t expect much prior to reading it.

Post the read, to my surprise, I realized the author Machiavelli might possess some of the qualities that are needed for successful investing.

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I recently read The Code Breaker: Jennifer Doudna, Gene Editing, and the Future of the Human Race by Walter Isaacson, the bestselling author of Steve Jobs. The book started at the story of Jennifer Doudna and expanded onto the potential applications of gene editing and what that technology could potentially mean for the human race. I highly recommend the book.

My key take-aways are as follows:

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Curiosity-driven motives lead to unusual discoveries

The word “curiosity” appeared more than 30 times in the book. It reminds me of the principle that I always think about, “If you don’t have passion, you cannot win.”

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I re-read the copy of the book that I bought four years ago, when I was learning about investing at the Yale Endowment. My new takeaways are as follows.

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Dare to be great

Human beings are a social species. To survive, we are inclined to huddle together and to imitate each other. For most investors, they care so much about how other people see them that they dare not say anything different or do anything new. If they do, they risk their job security, professional status, and social networks. Those behavioral inclinations are simply a natural part of us, and they are difficult to overcome – just like a software cannot debug itself. Most investors are conventional and do not have the ability to be different. Successful investors are unconventional, and so they are rare.

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