Joel Greenblatt is managing director and co-chief investment officer at Gotham Asset Management, having co-founded Gotham in 1985. His written work includes the famous tome The Little Book That Beats the Market, published in 2005, which set out his ‘magic formula’ for private investors.
In this interview, he speaks to Dan Jones about the relative cheapness of certain US shares, why he is still a fan of big tech, the origins of the magic formula and its usefulness for investors, and the prospects for the UK equity market.
Timestamps:
00:00 - Intro
00:58 - Investment philosophy
04:27 - Risk-free rate in 2023
06:00 - Are we in a 'normal' environment?
13:40 - Knowing your 'circle of competence'
17:06 - Value versus growth in the last decade
20:40 - The magic formula
27:03 - Cash flow versus EBIT
32:00 - The UK market
36:23 - Company spin-offs
39:35 - Conglomerates
40:37 - Outro
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