In his book, The Little Book That Beats the Market, Joel Greenblatt explains how investors may outperform market averages by following his “Magic Formula” - simple process of investing in good companies.

2. Use value investing

3. Understand how to work with share prices

4. Do it for yourself

5. Screen for stocks with a minimum market
capitalization

6. Exclude any utility and financial stocks

7. Exclude foreign, non US companies

8. Determine the company's Earnings Yield

9. Determine the company's Return on Capital

10. Re-balance portfolio once per year

11. Repeat

12. Thank You