Joel Greenblatt Quotes

Value investing strategies have worked for years and everyone's known about them. They continue to work because it's hard for people to do, for two main reasons. First, the companies that show up on the screens can be scary and not doing so well, so people find them difficult to buy. Second, there can be one-, two- or three-year periods when a strategy like this doesn't work. Most people aren't capable of sticking it out through that.

If you spend your energies looking for and analysing situations not closely followed by other informed investors, your chance of finding bargains greatly increases.

Here is part of the tradeoff with diversification. You must be diversified enough to survive bad times or bad luck so that skill and good process can have the chance to pay off over the long term.

Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.

We are busy surviving, herding, fixating on what just happened, and being overconfident!

companies that achieve a high return on capital are likely to have a special advantage of some kind. That special advantage keeps competitors from destroying the ability to earn above-average profits.

Figure out what something is worth and pay a lot less.

My goal is to buy a company at a low multiple to normal earnings power several years out and that the company earns good returns on capital at that level of normal earnings. A holding period of more than one year also works quite well as the factors are persistent in years 2 and 3.

I still believe that for good business analysts a concentrated portfolio is a good strategy combined with a long term horizon. Once again, the secret to success in following the formula strategy is patience, a quality in short supply for both professionals and individual investors alike. I think investors should have a large portion of their assets in equities over time.

Something out of the ordinary course of business is taking place that creates an investment opportunity. The list of corporate events that can result in big profits for you runs the gamut - spinoffs, mergers, restructurings, rights offerings, bankruptcies, liquidations, asset sales, distributions.

Look down, not up, when making your initial investment decision. If you don't lose money, most of the remaining alternatives are good ones.

The more confidence I have in each one of my stock picks, the fewer companies I need to own in my portfolio to feel comfortable.

I wait until an investment idea is so good, it hits me over the head like an anvil.

If I plug my estimates into the Magic Formula, and it comes out cheap, that's good.

Remember, it's the quality of your ideas not the quantity that will result in the big money.