📖Joel Greenblatt
Quality Business Criteria
Quality businesses compound wealth and reduce risk.
Invest in businesses with durable competitive advantages, strong cash flows, and management integrity. Quality businesses compound wealth over time and reduce downside risk.
🏠 Everyday Analogy
📖 Core Interpretation
Joel Greenblatt emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Durable advantages and good management create superior returns.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 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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