The Intrinsic Value Podcast - The Investor’s Podcast Network
MI381: Joel Greenblatt: Behind the Magic Formula w/ Shawn O’Malley
Dec 9, 2024
Dive into the world of legendary investor Joel Greenblatt and uncover his unique Magic Formula for stock investing. Learn about the allure of undervalued stocks emerging from bankruptcy and the essential role of management decisions in maximizing shareholder value. Discover why even seasoned investors find potential in microcap stocks and special situations. Explore the power of independent thinking in investing, breaking free from the constraints of groupthink. Each topic reveals valuable insights for thriving in today’s stock market.
57:13
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Quick takeaways
- Joel Greenblatt's 'magic formula' for investing emphasizes high earnings yields and high returns on capital for successful stock selection.
- Analyzing case studies, like NVR's innovative land control model, illustrates strategies that minimize risk while targeting superior returns on investment.
Deep dives
Introduction to Joel Greenblatt's Teachings
The episode emphasizes the opportunity to learn from Joel Greenblatt, a legendary investor known for his exceptional market returns and teaching role at Columbia University. Greenblatt's approach to investing is defined by his 'magic formula,' which focuses on identifying companies with high earnings yields and high returns on capital. By analyzing his teachings, listeners are given insights into the principles behind successful investing without the high cost of formal education. The discussions aim to highlight not just the mechanics of investing but also the mindset required to thrive in the financial markets.
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