Why do small companies, often ignored by investors, earn higher average returns than giant blue‑chip firms? And why do stocks that look cheap on the books—trading at a low price compared to their accounting worth—tend to beat expensive “glamour” stocks over long periods? These two simple patterns, based on firm size and the book‑to‑market ratio, changed how we think about investing. In this chapter, we build the tools to measure them, turn them into portfolios that capture these effects, and understand when they really work.