📖Joel Greenblatt
Learn from Past Sells
Post-mortem every sell decision to improve.
After every sell, review the outcome. Did you sell too early, too late, or at the right time? Post-mortems on sell decisions improve future judgment.
🏠 Everyday Analogy
📖 Core Interpretation
Joel Greenblatt sees markets as cyclical rather than linear. Understanding cycle position improves risk-taking decisions more than trying to call exact tops and bottoms.
💎 Key Insight：Reviewing sell decisions sharpens future timing.
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❓ Why It Matters
Ignoring cycles repeats the same mistakes: excessive optimism at peaks and excessive pessimism near troughs. Context matters for position sizing.
🎯 How to Practice
Monitor credit, valuation, earnings, and sentiment signals; reduce aggressiveness in euphoric phases and preserve flexibility in fearful phases.
⚠️ Common Pitfalls
Treating short rebounds as full cycle turns
Extrapolating peak conditions indefinitely
Becoming maximally defensive near valuation troughs
📚 Case Studies
1
Apple Post-Dot-Com Bust (2000)
After the tech bubble burst, Apple traded at a low earnings yield despite strong product pipeline and improving profitability.
✨ Outcome：Investors focusing on high earnings yield and durable business saw significant multiple expansion and outsized returns over the next decade.
2
Best Buy Value Opportunity (2011)
Best Buy’s price fell on fears of Amazon competition, pushing its earnings yield high relative to normalized profits and free cash flow.
✨ Outcome：Investors buying on elevated earnings yield saw strong recovery as buybacks, cost cuts, and stable demand lifted the stock in subsequent years.
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