Joel Greenblatt's Little Book that Beat the Market became a financial publishing phenomenon.

In a simple writing style, the successful hedge fund investor showed how picking 'good' stocks at 'cheap' prices was enormously profitable. He claims that a portfolio of the top 30 Magic Formula stocks has averaged a 17-year annual return of 30.8% and beats the S&P 500 96% of the time. It should be noted that these returns are volatile and require a fully diversified portfolio.

Greenblatt suggests sticking to A+ stocks (in the top 10%) for the best chance of outperformance and ideally to a basket of the top 50 ranked stocks in the market.