📖Joel Greenblatt
Contrarian Thinking
Good investments often feel uncomfortable.
The best investments often feel uncomfortable because they go against popular opinion. If everyone loves a stock, it's probably overpriced. If everyone hates it, investigate.
🏠 Everyday Analogy
📖 Core Interpretation
In Contrarian Thinking, 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：Popularity signals overvaluation; hatred signals opportunity.
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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
American Express Post-Asia/Russian Crises (2001)
American Express traded at depressed multiples after emerging market and Russian crises hurt travel and card volumes.
✨ Outcome：Greenblatt’s long-term view on brand strength and card economics led to holding; as conditions normalized, valuation rerated and produced strong multi-year gains.
2
Host Marriott Spinoff from Marriott (1993)
Marriott split into Host Marriott (real estate, heavy debt) and Marriott International (management business). Many institutions dumped Host due to leverage and index constraints, depressing its price.
✨ Outcome：Host traded at a deep discount to asset value; investors who bought after forced selling saw strong multi‑year gains.
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