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My incessant worry is that the book's recommendation is different from the book's backtest.

Certainly there will always be some differences in order to make the system easy to follow. But if I attempt to read between the lines, Greenblatt is trying to achieve the following three things:

1) A simple way to find good companies selling at bargain prices, on average
2) A mechanical buy and sell strategy to remove emotion (your "incessant worry" as many others will ahve as well)
3) Some aspect of dollar-cost-averaging, where you buy evenly in rolling time periods, so you do not get caught high and dry at market peaks -- when everybody is telling you to buy and is frequently the worst time to buy

Also, I know he is a little inconsistent about how many stocks to buy, but never did he say 5-7 per month. He gave a few guidelines to get you and keep you at around 30 once you have gone through a full year's cycle, and that means about 5 every couple of months, or 2-3 a month, or 7 a quarter. The basic strategy that underlies it is:

1) Hold 25-30 stocks once you're full up (once you've gone through a full year's cycle)

2) Buy on a regular schedule. The schedule should be whatever fits your time and interest level; it is not important what it is except that it should be at least a few times a year, and regular -- NOT driven by emotion. Divide 25-30 by how often you are going to go through the buy/sell cycle per year, and that is how many stocks you should buy and sell each time. If you do it quarterly, 6-7 stocks per quarter, for example. The basic idea is to make sure you roll the Greenblatt dice approximately 30 times per year. Calculate your trading costs for 30 buys and 30 sells per year and make sure it makes sense for you, and then fit those 30 transactions into how ever many regular periods you are comfortable with.

3) Buy equal dollar amounts of each stock to start, and scale that up or down based on the money available after each sale (after one year)

That's the default strategy and it is a very elegant one, and is close to what Greenblatt back tested. Much of the discussion on the board here is to take some more advanced steps. Greenblatt is cautious about recommending that, because very often investors end up adding emotion into their actions, thinking they are being "smarter." That is the trap that he tries so hard to keep most investors out of. Although there are some sharp people here on this board capable of adding some advanced ideas, one of the MOST COMMON psychological tendencies of investors is over confidence. Make sure you are not being over confident of your own abilities. That is very important.

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