I did not read all the book by myself but my investor friend who have finished reading it told me the idea of this book. So this is just a rough idea on it .You can buy a book to read it entirely to get it idea perfectly. I will not spoil whole book. It is one of the best selling investment book right now in the market.

The author of this book claims that he can use a simple investment formula and it have yielded him an hefty 40% annual return for over 20 years periods. Remember, a legendary Warren Buffer have made 21% in 40 years periods. What is that formula? You are urged to know ,right ?

The formula is composed by only two normal ratio that we can find the daily newspaper. They are PE (Price-to-earning) and ROA (Return on asset) ratio. Here is the methodology to pick a stock.

1. Rank the shares by ROA .Make the list with only the 400 highest ROA ratio in the market.
2. Rank the shares by PE .Make the lowest one on the top of the list and so on.

3.Now ,we have two lists of shares. Let merge the lists together into one. By adding the rank number of a particular share in both lists. If that share appears in only one list, then it will be eliminated. And make a new list also sorting it by descent order .

4. Eliminate those shares that have abnormal earning out. Abnormal earning means the earning that will not recur again next year such as land sales, project sales.

5. Choose only the shares that are within 30 top . Buy them all and expect to sell at the end of year.

It is easy , isn’t it ? The key idea behind this model is lied on the book. Read it before you go further and use it to buy a stock !