Joel Greenblatt

Joel Greenblatt

Postby winston » Thu Sep 29, 2011 7:57 am

Greenblatt: Stocks Looking Cheap, Very Cheap

Hedge fund guru Joel Greenblatt says that, based on trailing free cash flow yields, stocks are trading at levels that put them in about the 95th percentile of cheapness when examining the past 20 years of market history.

Greenblatt tells CNBC that if the past is any indication, valuation levels this low could be proceeded by a 15%-20% gain for the broader market over the next year, and gains of more than 30% for value-focused portfolios.

Taking advantage of these bargains means having the fortitude to invest in some very unloved stocks, however, Greenblatt says.

Source: Guru Investor

http://theguruinvestor.com/2011/09/27/g ... ery-cheap/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Joel Greenblatt

Postby winston » Wed Nov 02, 2011 8:21 pm

This Information Is Worth Literally Thousands of Dollars

By Dan Ferris

On a recent business trip, one of the greatest living investors told me something that has the power to make you an awful lot of money.

It was late last month, I was in New York for the Value Investing Congress, a two-day conference featuring presentations by some of the greatest investors of our time.

One of those investors is a fellow named Joel Greenblatt. Greenblatt is an investment legend, who made his clients 40% a year for 20 years.

At that rate, you're almost doubling your money every two years. It's better than Warren Buffett.

Greenblatt is also a well-known author of some of the best investment books of our time (even though they all have hokey titles).

They include You Can Be a Stock Market Genius, The Little Book That Beats The Market (one of my top five must-read investment books of all time), and his new release, The Big Secret for the Small Investor.

On the second day of the conference, Greenblatt held a special breakfast for a small group of investors and analysts.

At breakfast, Greenblatt answered questions and told us about some of the research reported in his new book.

One story caught my attention: He said the best-performing mutual fund of the last decade made about 18% a year.

All you had to do was leave your money alone, and you could have made 18% a year for 10 years. That kind of compounding could turn a $1,000 investment into more than $5,200 in a decade.

But most investors in the fund didn't make that much. They didn't make anything at all. In fact, they lost 11% a year.

Why? Because the average fund shareholder bought at the top of the market and sold their fund shares at the bottom.

They pulled money out after the fund performed poorly and only put it back in after the fund performed well.

Instead of allowing the fund's managers to grow their investment at 18% a year, investors panicked and sold at the bottom… and bought back in at the top.

The moral of Greenblatt's tale was simple: Most investors are terrible at making buy and sell decisions. They let their emotions dictate what they're doing.

So how do we avoid that? How do we make sure you don't wind up like the great majority of investors, who buy in a euphoric rush at the top and sell in despair at the bottom?

This information is worth literally thousands, hundreds of thousands, or even millions of dollars to investors.

But it's simple enough.

For my money, the solution is to buy the highest-quality businesses you can find at great prices.

I'm talking about the names you've heard from me before: stocks like cigarette giant Altria, semiconductor giant Intel, and software giant Microsoft.

When you buy these stocks and skip out on the risky junk most investors buy, you're just doing what the father of value investing Ben Graham said: Never put your money into a low-grade enterprise.

When conditions get tough, those "low-grade enterprises" will roll over like dying bugs.
And they destroy your wealth in the process.

High-quality businesses, on the other hand, have the wherewithal to use tough times to their advantage.

They steal market share from their competitors. They buy back their stock when it's cheap, increasing the value for remaining shareholders.

They continue increasing their dividends year after year, meaning you're collecting more income regardless of what happens to the share price.

And their share prices often suffer less than their lower-quality counterparts.

This is what gives you the fortitude to ride out the occasional panic.

If you let the market's ups and downs scare you into selling, or entice you into buying, you're lost.

If you're able to ignore them and continue holding the safe, cheap stocks you've bought, you've got a great chance of winning.

You've also got a great chance of making an awful lot of money.

Source: Daily Wealth
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Joel Greenblatt

Postby iam802 » Wed Nov 02, 2011 8:29 pm

winston wrote:
This Information Is Worth Literally Thousands of Dollars By Dan Ferris

..

The moral of Greenblatt's tale was simple: Most investors are terrible at making buy and sell decisions. They let their emotions dictate what they're doing.

...




Let me give you the answer to this which is literally worth MILLIONS of DOLLARS. If luck has it, it will be worth BILLIONS.

Hidden Content:
Always buy low and sell high. Or sell high and buy back low.
1. Always wait for the setup. NO SETUP; NO TRADE

2. The trend will END but I don't know WHEN.

TA and Options stuffs on InvestIdeas:
The Ichimoku Thread | Option Strategies Thread | Japanese Candlesticks Thread
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Re: Joel Greenblatt

Postby winston » Mon Feb 20, 2017 6:14 pm

Great investment ideas are not necessarily complicated.

“There’s a clarity that comes with great ideas:

You can explain why something’s a great business, how and why it’s cheap, why it’s cheap for temporary reasons and how, on a normal basis, it should be trad- ing at a much higher level.

You’re never sitting there on the 40th page of your spreadsheet, as Buffett would say, agonizing over whether you should buy or not.”

- Joel Greenblatt
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Joel Greenblatt

Postby winston » Mon Feb 20, 2017 6:17 pm

You should be able to defend your highest conviction investments at all times.

“There’s a virtuous cycle when people have to defend challenges to their ideas.

Any gaps in thinking or analysis become clear pretty quickly when smart people ask good, logical questions.

You can’t be a good value investor without being an independent thinker — you’re seeing valuations that the market is not appreciating.

But it’s critical that you understand why the market isn’t seeing the value you do.

The back and forth that goes on in the investment process helps you get at that.”

- Joel Greenblatt
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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