📖Joel Greenblatt
Simplicity Wins
Simplicity beats complexity in investing.
Complex strategies rarely beat simple ones. The best investment approach is one you can understand and stick to.
🏠 Everyday Analogy
📖 Core Interpretation
Joel Greenblatt advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Wall Street sells complexity to justify fees. But simple strategies often outperform elaborate ones. The magic formula uses just two variables and beats most hedge funds. Complex models with dozens of inputs introduce noise and overfitting. Focus on the few variables that truly matter. Elegance lies in simplicity, not sophistication.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
🎙️ Master's Voice
Special situations—spinoffs, mergers, restructurings—often create mispricings.
Greenblatt made his early career in special situations. These events create forced selling and temporary mispricings.
⚔️ Practical Guide
✅ Decision Checklist
- Is there a special situation?
- Is there forced selling?
- Is this mispriced?
📋 Action Steps
- Look for special situations
- Identify forced selling
- Exploit mispricings
🚨 Warning Signs
- Ignoring special situations
- Missing forced selling
- Not seeking mispricings
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
Coca-Cola’s Simple Business (1988)
Greenblatt highlighted Coke’s dominant brand, straightforward business model, and predictable cash flows as a classic simple investment.
✨ Outcome：Long-term holders earned substantial returns as earnings compounded and the brand expanded globally.
2
Avoiding Complex Tech Mania (2000)
During the dot-com bubble, Greenblatt emphasized avoiding hard-to-value tech companies with no profits and unclear models.
✨ Outcome：Investors who stayed with simple, profitable businesses avoided the crash and outperformed over the next decade.
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