Joel Greenblatt

If you just stick to buying good companies (ones that have a high return on capital) and to buying those companies only at bargain prices (at prices that give you a high earnings yield), you can end up systematically buying many of the good companies that crazy Mr. Market has decided to literally give away
The secret to success in following the formula strategy is patience
Maintaining a three- to five-year horizon for your stock market investments should give you a large advantage over most investors. It is also the minimum time frame for any meaningful comparison of the risks and results of alternative investment strategies
Most people don’t (and shouldn’t) invest by buying stocks and holding them for only one month. Besides the huge amount of time, transaction costs, and tax expenses involved, this is essentially a trading strategy, not really a practical long-term investment strategy
Even finding one good opportunity a month is far more than you should need or want
Many studies over the years have confirmed that value-oriented strategies beat the market over longer time horizons
If your strategy works, do not let underperformance change your mind – it happens: I love our strategies. We can make lots of money over time with them. But people don’t stick with it. Most people have a difficult time sticking with strategies that underperform from time to time
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
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
A strategy of buying stocks at low prices relative to their book values has been shown to consistently beat the market
You need to have a system that screens and analyzes every investment you might make
If you are going to be a very concentrated investor, you should not use leverage
You can’t leverage because you need to live through the downturns and that is incredibly important
The thing you bought goes down and the thing you sold goes up, but I have learned to ignore the pain
While it’s nice and often helpful to have a rising market, it’s not required to time the market
If you really want to ‘beat the market’ most professionals and academics can’t help you
The record of research analysts at major brokerage firms for predicting future earnings or stock prices is quite poor… Even institutional clients of reputable investment firms don’t get particularly good advice
Although over the short term Mr. Market may price stocks based on emotion, over the long term Mr. Market prices stocks based on their value
Stock prices move around wildly over very short periods of time. This does not mean that the values of the underlying companies have changed very much during that same period. In effect, the stock market acts very much like a crazy guy named Mr. Market
Over the short term, Mr. Market acts like a wildly emotional guy who can buy or sell stocks at depressed or inflated prices
Over the long run, it’s a completely different story: Mr. Market gets it right
The strategy of putting all your eggs in one basket and watching that basket is less risky than you might think
Although over the short term, Mr. Market may set stock prices based on emotion, over the long term, it is the value of the company that becomes most important to Mr. Market
Reading and studying Graham’s work is how I first became fascinated with the stock market. I still apply his teachings wherever and whenever I can
[On value-oriented strategies] Though these strategies have been well documented over many years, most individual and professional investors do not have the patience to use them
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
Bargains are often created by anxious sellers who never wanted the stuff in the first place
New bargains are constantly being created
To be a successful investor over the long-term, you must also pretty much enjoy the journey
The secret to investing is to figure out the value of something – and then pay a lot less
The odds of anyone calling you on the phone with good investment advice are about the same as winning Lotto without buying a ticket
So one way to create an attractive risk/reward situation is to limit downside risk severely by investing in situations that have a large margin of safety. The upside, while still difficult to quantify, will usually take care of itself. In other words, look down, not up, when making your initial investment decision. If you don’t lose money, most of the remaining alternatives are good ones
Somehow, when ownership interests are divided into shares that bounce around with Mr. Market’s moods, individuals and professionals start to think about and measure risk in strange ways. When short-term thinking and overly complicated statistics get involved, owning many companies that you know very little about starts to sound safer than owning stakes in five to eight companies that have good businesses, predictable futures, and bargain prices
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
You don’t want to be well paid merely for taking big risks. Anyone can manage that
The truth is you can’t really tell much of anything just from measuring a stock’s past price movements
[On money] If viewed in the proper light, it can buy you time – the freedom to pursue the things that you enjoy and that give meaning to your life
You don’t need special formulas or mathematical models to help you choose the really big winners. Logic, commonsense, and a little experience are all that’s required
The financial markets have… been known to accommodate those who prefer instant gratification
I usually just look at a simple multiple to normalized earnings. If I can buy something at a very low multiple and I have confidence in the earnings stream, I don’t have to calculate a DCF to know whether I want to buy it
I think investors should have a large portion of their assets in equities over time. I don’t know too many people that are good at timing the market relative to macroeconomic events
The markets are emotional, it’s not always rational, and you’re systematically taking advantage of that by buying companies that are unreasonably cheap and good
Our investment philosophy for all of our funds is simple, straightforward and consistent
Time is the currency of everyone’s life

	Business Inquiry
	masnar.capital@gmail.com