We Study Billionaires - The Investor’s Podcast Network

TIP339: Common Sense Investing w/ Joel Greenblatt

13 snips
Mar 7, 2021
Guest
Joel Greenblatt
Trey Lockerbie chats with Joel Greenblatt, a legendary investor and professor at Columbia University. They delve into Greenblatt's investment philosophy and the balance between concentrated and diversified portfolios. He shares insights on position sizing, emphasizing risk management in investment decisions. The conversation also touches on the impact of low interest rates on stocks and the importance of knowing your circle of competence. Greenblatt's recent book 'Common Sense' is highlighted as a guide for practical investing.
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INSIGHT

Investing Epiphany

  • Greenblatt's investing epiphany came from a Forbes article about Ben Graham's formula.
  • It challenged efficient market theories and emphasized valuing businesses bought at a discount.
ANECDOTE

Concentrated Success

  • Greenblatt's highly concentrated fund generated 50+% annual returns for a decade.
  • Despite success, he returned outside capital to reduce pressure and focus on his enjoyment of investing.
INSIGHT

Concentrated Strategy

  • Greenblatt's concentrated portfolio held 6-8 stocks representing 80+% of assets.
  • This approach, similar to Buffett's early partnership, focused on special situations and deep-value opportunities.
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