We Study Billionaires - The Investor’s Podcast Network

TIP677: You Can Be a Stock Market Genius w/ Roger Fan

Nov 22, 2024

Roger Fan, Chief Investment Officer at RF Capital Management, dives deep into Joel Greenblatt's investment strategies. They discuss the lucrative world of spinoffs and how they serve as ripe opportunities for mispricing. Fan highlights the importance of concentration in portfolios and shares his preferred special situations to invest in, including unique bankruptcy deals. They also explore case studies like Host Marriott and L'Occitane, revealing how strategy and market psychology can lead to significant investment success.

01:17:54

Episode guests

Roger Fan

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Episode notes

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Quick takeaways

Joel Greenblatt's investment success stems from his focus on special situations, allowing him to identify mispriced opportunities in the stock market.

Spinoffs often become undervalued as market dynamics and investor psychology lead to overselling, presenting profitable investment prospects for savvy investors.

Greenblatt emphasizes that thorough research and understanding key characteristics of investments, such as insider ownership and institutional interest, are vital for success.

Deep dives

The Legacy of Joel Greenblatt

Joel Greenblatt is recognized as one of the most successful hedge fund managers, famously achieving average annual returns of 40% over two decades. His expertise and track record have placed him among the elite in the investment community, particularly for his focus on special situations. Greenblatt's books, including 'You Can Be a Stock Market Genius', serve as guides for investors eager to understand his strategies. His ability to convey complex concepts in a straightforward manner makes his insights accessible to both novice and seasoned investors.

Intro

3min

Unlocking Investment Success: Special Situations and Beyond

16min

Analyzing the Strategic Spinoff of Host Marriott

2min

Analyzing Spinoff Opportunities: The Case of Marriott

5min

Insider Influence and Investment Insights

16min

Analyzing L'Occitane's Strategic Acquisition and Financing

3min

Understanding Market Spreads and Investment Opportunities

4min

Navigating the Complex World of Bankruptcy Investing

24min

On today’s episode, Clay is joined by Roger Fan to discuss Joel Greenblatt’s book, “You can be a Stock Market Genius.” Joel Greenblatt is one of the greatest hedge fund managers of all time. Greenblatt famously averaged 40% a year over 20 years. At that rate, $1 million grows into $836 million.

He’s also the author of best-selling classics like “The Little Book that Beats the Market” and was a key character in William Green’s book, “Richer, Wiser, Happier.”

Roger Fan is the Chief Investment Officer at RF Capital Management. RF Capital seeks to achieve superior risk-adjusted returns by investing in obscure, undervalued companies globally.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

02:22 - An overview of Joel Greenblatt’s background as an investor, author, teacher, and philanthropist.

06:22 - Why Greenblatt focused much of his attention on special situations to beat the market.

10:47 - What a spinoff is and why they are ripe hunting grounds for mispricings.

19:04 - One of Greenblatt’s favorite case studies for spinoffs.

21:01 - The three key characteristics to look for in a spinoff transaction for investors.

33:50 - How Joel Greenblatt views investing in bankruptcy deals.

58:50 - Which special situations Roger prefers to invest in.

01:11:03 - How Roger approaches concentration in his portfolio.

And so much more!

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Roger’s Firm: RF Capital Management.
Joel Greenblatt’s books: You Can Be a Stock Market Genius, The Little Book That Beats the Market.
Related Episode: RWH003: How To Win The Investing Game w/ Joel Greenblatt.
Related Episode: TIP339: Common Sense Investing w/ Joel Greenblatt.
Follow Roger on Twitter & LinkedIn.
Follow Clay on Twitter.
Check out all the books mentioned and discussed in our podcast episodes here.
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