#1
The Magic Formula
"Buy good companies at bargain prices. Rank by earnings yield and return on capital, then buy the top ranked."
High returns on capital plus low price equals value.
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Joel Greenblatt📌 Buying Principles
Joel Greenblatt's Buying Principles 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·Buying Principles
3 Key Buying Principles Principles
#2
Buy Below Intrinsic Value
"The cardinal rule of investing: buy only when the price is significantly below your conservative estimate of intrinsic value. This builds in protection against error."
Buy only at prices well below intrinsic value.
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Wait for the Right Opportunity
"The stock market is a no-called-strike game. You don't have to swing at every pitch. Wait for the fat pitch — the opportunity that offers exceptional risk-reward."
Wait for exceptional risk-reward opportunities.
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What are Joel Greenblatt's key buying principles principles?
Joel Greenblatt has 3 key principles on buying principles. The most important one is "The Magic Formula" — Buy good companies at bargain prices.
How does Joel Greenblatt apply buying principles in practice?
Joel Greenblatt applies buying principles through several key principles including "The Magic Formula" and "Buy Below Intrinsic Value". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Joel Greenblatt's approach to buying principles unique?
Joel Greenblatt's approach to buying principles 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.
