We Study Billionaires - The Investor’s Podcast Network

TIP339: Common Sense Investing w/ Joel Greenblatt

13 snips

Mar 7, 2021

Trey Lockerbie chats with Joel Greenblatt, a legendary investor and professor at Columbia University. They delve into Greenblatt's investment philosophy and the balance between concentrated and diversified portfolios. He shares insights on position sizing, emphasizing risk management in investment decisions. The conversation also touches on the impact of low interest rates on stocks and the importance of knowing your circle of competence. Greenblatt's recent book 'Common Sense' is highlighted as a guide for practical investing.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

ANECDOTE

Law School Dropout

Joel Greenblatt was smitten with investing before law school, running a small fund while studying.
Dropping out of law school, he joined a startup hedge fund, marking a pivotal career shift.

INSIGHT

Investing Epiphany

Greenblatt's investing epiphany came from a Forbes article about Ben Graham's formula.
It challenged efficient market theories and emphasized valuing businesses bought at a discount.

ANECDOTE

Concentrated Success

Greenblatt's highly concentrated fund generated 50+% annual returns for a decade.
Despite success, he returned outside capital to reduce pressure and focus on his enjoyment of investing.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

The Secret

Rhonda Byrne

The Secret by Rhonda Byrne introduces the concept of the law of attraction, which suggests that positive thoughts can attract positive outcomes in life. The book outlines a three-step process: ask, believe, and receive. Byrne emphasizes the importance of gratitude, visualization, and maintaining a positive mindset to achieve one's desires. The book covers various areas such as prosperity, relationships, health, and happiness, and includes examples and quotes from historical and modern-day teachers who have allegedly used this principle to achieve their goals[2][3][5].

Common Sense - the Investor`s Guide to Equality, Opportunity, and Growth

Joel Greenblatt

In *Common Sense*, Joel Greenblatt presents an investor's perspective on creating a more equitable economy. He proposes disruptive solutions to issues like education inequality, immigration reform, and banking regulation, aiming to spark meaningful conversations about economic growth and opportunity. Greenblatt draws on personal experiences and external insights to advocate for immediate changes that can benefit everyone.

You can be a stock market genius

Uncover the Secret Hiding Places of Stock Market Profits

Joel Greenblatt

This book provides a highly accessible guide to the stock market, focusing on special situations that portfolio managers and investment experts often miss. It includes case studies, important background information, and tools for individual investors to exploit opportunities in areas like spin-offs, restructurings, merger securities, rights offerings, recapitalizations, bankruptcies, and risk arbitrage. Greenblatt, who has been beating the Dow with returns of 50 percent a year for over a decade, shares his expertise to help readers become successful stock market investors.

The Little Book That Beats the Market

Joel Greenblatt

In this book, Joel Greenblatt provides a straightforward and accessible guide to value investing. He introduces a 'magic formula' that helps investors identify and purchase good businesses at below-average prices. The formula, explained using simple math and humor, has been extensively tested and proven to be effective in beating the market and professional managers. The book also explores why success often eludes individual and professional investors and why the formula remains viable even after widespread knowledge of it. Updated editions include data and analysis from the recent financial crisis and model performance through 2009[2][3][4].