#1
Special Situations
"Spinoffs, mergers, and restructurings create opportunities where value is mispriced."
Corporate events create temporary mispricings.
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Joel Greenblatt📌 Business Judgment
Joel Greenblatt's Business Judgment Rules
Joel Greenblatt (born December 13, 1957) is an American investor, hedge fund manager, and author. He is the founder of Gotham Capital, which achieved annualized returns of approximately 40% from 1985 to 2006, and is a professor at Columbia Business School. Greenblatt is best known for developing the "Magic Formula" investing strategy, a systematic approach that ranks stocks based on...
3 principles·Business Judgment
3 Key Business Judgment Principles
#2
High Return on Capital
"Companies that earn high returns on capital are usually better businesses. Quality matters."
High return on capital signals business quality.
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Spinoff Opportunities
"Spinoffs are often mispriced because institutional investors are forced sellers. Study them carefully."
Spinoffs are sold by forced sellers, not value.
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What are Joel Greenblatt's key business judgment principles?
Joel Greenblatt has 3 key principles on business judgment. The most important one is "Special Situations" — Spinoffs, mergers, and restructurings create opportunities where value is mispriced.
How does Joel Greenblatt apply business judgment in practice?
Joel Greenblatt applies business judgment through several key principles including "Special Situations" and "High Return on Capital". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Joel Greenblatt's approach to business judgment unique?
Joel Greenblatt's approach to business judgment is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Joel Greenblatt provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
