Greenblatt’s Magic + 5 Value Stocks that Make the Cut

Hedge fund manager Joel Greenblatt, author of The Little Book that Beats the Market, uses what he calls a “magic formula” to earn returns that outperform the market. In a recent article for TheStreet.com, John Reese, CEO of Validea, explains Greenblatt’s strategy of focusing on return-on-capital and earnings yield to find “good companies at bargain prices.” But this straightforward, seemingly simple strategy is no magic bullet. It is based on a long-term view (3 to… Read More

Greenblatt on Why Passive, not Active, is Best for Most Investors

“I think the big move now is from active [investing] to passive, and that’s good for most people,” says Joel Greenblatt, Managing Principal of Gotham Asset Management and the guru Validea’s “Earnings Yield Investor” is based on. In a recent interview with CNBC, Greenblatt shared his opinion that “most people shouldn’t be picking individual stocks unless they know how to value businesses. That’s hard work, and a full time job.” When it comes to selecting… Read More

Greenblatt: Why I Changed Strategies

Why did top strategist Joel Greenblatt change his investment strategy from a highly concentrated one to one that invests in hundreds of stocks? That is one of the many interesting topics Greenblatt covers in a recent interview with WealthTrack.

Good Companies, Cheap Shares: How To Win With The Greenblatt Approach

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the Joel Greenblatt-inspired strategy, which has averaged annual returns of 10.7% since its late 2005 inception vs. 5.3% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Greenblatt-based investment strategy. Taken from the September 12, 2014 issue of The Validea Hot List

Why Greenblatt Altered His Approach

While he hasn’t changed his general value investing approach, hedge fund guru Joel Greenblatt has changed the way he implements that strategy. The reason? Many investors just can’t handle the ups and downs of a concentrated portfolio.