📖Joel Greenblatt
Market as Your Servant
Use the market as your servant, not your guide.
The market exists to serve you, not to guide you. Use market prices to your advantage — buy when the market offers bargains and sell when it offers premiums.
🏠 Everyday Analogy
📖 Core Interpretation
In Market as Your Servant, 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：The market offers prices; you decide whether they're fair.
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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 Spin-Off Opportunity (2004)
Greenblatt analyzed American Express when it was temporarily out of favor, trading below its intrinsic value based on earnings and returns on capital.
✨ Outcome：Invested at depressed prices, earning strong returns as earnings normalized and the market rerated the stock.
2
McDonald's Temporary Earnings Slump (2002)
McDonald’s faced operational issues and lower earnings, leading investors to punish the stock despite strong underlying economics and durable brand strength.
✨ Outcome：Bought during the period of pessimism and profited significantly as operations improved and the valuation reverted upward.
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