📖Joel Greenblatt
Catalyst-Aware Stock Picking
Identify specific catalysts that will unlock value.
Look for investments where a specific catalyst will unlock value. Without a catalyst, even cheap stocks can remain undervalued indefinitely.
🏠 Everyday Analogy
📖 Core Interpretation
In Catalyst-Aware Stock Picking, Joel Greenblatt focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Catalysts transform undervaluation into realized gains.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
General Cinema Spin-off (1985)
General Cinema separated its beverage subsidiary, forming Coca-Cola Bottling Group. The spin-off was underfollowed and sold by index and legacy holders, creating a mispricing.
✨ Outcome：Greenblatt accumulated shares at low valuations; the spin-off appreciated significantly as fundamentals and market recognition improved.
2
Host Marriott / Marriott Spin-off (1988)
Marriott restructured, spinning off its real estate-heavy Host Marriott from its management business. Many investors dumped the more leveraged entity, pushing the price below intrinsic value.
✨ Outcome：Investing in the unpopular spin-off produced strong gains as asset values and earnings power were recognized over time.
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