MI381: Joel Greenblatt: Behind the Magic Formula w/ Shawn O’Malley
The Intrinsic Value Podcast - The Investor’s Podcast Network
Navigating Investment Strategies
This chapter delves into investment strategies amidst market fluctuations, discussing the difficulty of maximizing returns. It explores the principles of the 'magic formula,' focusing on the importance of identifying undervalued stocks while distinguishing between temporary and permanent company challenges.
In today’s episode, Shawn O’Malley (@Shawn_OMalley_) takes you into the classroom of legendary investor Joel Greenblatt, sharing his biggest takeaways from watching Greenblatt’s lectures at Columbia. Greenblatt is a wildly successful investor, professor, founder of the Value Investor’s Club forum, and best-selling author of some of the most popular stock investing books ever written.
You’ll learn how Greenblatt thinks about the upside and downside potential for investments through three case studies, how Joel Greenblatt derived his Magic Formula for investing, why buying cheap stocks still works even though the strategy is well-known, where to look for the rarest but most attractive types of stock investments, what was Joel Greenblatt’s biggest investing mistake, plus so much more!
Prefer to watch? Click here to watch this episode on YouTube.
IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
02:34 - How to think through stock investments via case studies on the best pitches ever submitted to the Value Investor’s Club forum
03:02 - How Joel Greenblatt derived the Magic Formula for investing
05:12 - Which investments are the rarest but most attractive
07:34 - Why it’s important to condense an investment thesis down to just a few sentences
11:52 - How bankruptcy restructurings can actually generate undervalued and overlooked stocks
19:02 - Why so many great investors get their start with microcap stocks and special situations
30:16 - Why value investing still works and has worked across time
41:29 - How Joel Greenblatt made his biggest investing mistake
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
- Joel Greenblatt's book, The Little Book that Beats the Markets.
- Watch the Video summary of The Little Book that Beats the Markets.
- Joel Greenblatt’s site: MagicFormulaInvesting.com.
- Playlist of Joel Greenblatt’s video lectures.
- Check out Value Investors Club (VIC).
- Norbert Lou interview (Charlie479).
- Joel Greenblatt’s 2022 interview on the Richer, Wiser, Happier podcast | YouTube Video.
- Joel Greenblatt’s 2021 interview on the We Study Billionaires podcast | YouTube Video.
- Check out NVR Pitch on VIC.
- Take a look at the NII Pitch on VIC.
- See the SGDE Pitch on VIC.
- Review the WNMLA Pitch on VIC.
- Check out the books mentioned in the podcast here.
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