#1
Annual Rebalancing
"Rebalance your portfolio annually based on the formula rankings. Dont trade too frequently."
Rebalance annually based on new rankings.
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Joel Greenblatt🛡 Risk Management
Joel Greenblatt's Risk Management 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·Risk Management
3 Key Risk Management Principles
#2
Risk-First Approach
"Before considering how much you can make, consider how much you can lose. Risk management is not about avoiding risk entirely, but about understanding and controlling it."
Consider the downside before the upside.
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Position Sizing Discipline
"The size of your position should reflect your conviction and the risk involved. Never bet so large that a single mistake can wipe out your portfolio."
Size positions based on conviction and risk.
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What are Joel Greenblatt's key risk management principles?
Joel Greenblatt has 3 key principles on risk management. The most important one is "Annual Rebalancing" — Rebalance your portfolio annually based on the formula rankings.
How does Joel Greenblatt apply risk management in practice?
Joel Greenblatt applies risk management through several key principles including "Annual Rebalancing" and "Risk-First Approach". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Joel Greenblatt's approach to risk management unique?
Joel Greenblatt's approach to risk management 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.
