YouSaid · the spoken record

Joel Greenblatt

lines on the record: 116
first: 2018-04-20
most recent: 2018-04-20
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Right, so it may be cheap, it may not be cheap. They're not usually well followed. I would call it mispriced. It's ripe for mispricing. It doesn't really, all the studies that show the average spinoff does this or outperforms or doesn't outperform doesn't matter.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no. There are plenty of spin-offs, and it's inherent now, and people have done studies up through last year that show that they did much better than the market as a whole. But that wasn't really my point. My point is that the nature of spinoffs is they're not underwritten securities. They're usually given to people who don't want them.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“My goal, but you know, now lots of these big hatch funds handed out first a when someone walks in and says, go read this.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I really wrote it to be friendly and funny and, you know, just have a good time doing it. And I thought I was writing to an audience of average people, but I hadn't started teaching Columbia yet. And I realized as soon as I taught my first class back in 96 that I think I really wrote this at an MBA level because it was about at their level. And that wasn't my.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I have five kids and made all my kids read it. Number one. And so I still think it's everything in there is very valid Many hedge fund managers. I did not write it for hedge fund managers. That's really who took to it the most, which is how”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Covered that the parenthes Yeah, so, but I just really, it was really a collection of war stories from, you know, we had talked about, we had run outside money for 10 years, earned 50% before fees for that period. And how do we do that? You know, how can you do that? And what's the way you'd go about attacking that? And I just had a fun time writing about the war stories and having a good time with it.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“And so I had about 24 hours to change the name, and I was canvassing my family, and my father said something like, how about you can be a stock market genius? And then in parentheses, even if you're not too smart. And I kind of giggled about it and we put that in. It turned out to be one of the worst titles ever.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Really explain why, but I love investing and I. Can be a stock market genius. See, I can't even think of the name because it was such a bad name.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, well, not only that, but we also don't buy big positions and small pieces of the S&P 500, so we're not worried about capacity here. We're just worried about getting high returns for investors.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“The underperformance periods would be way mitigated based on the way we're doing it, and we're already long a dollar in the market.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Over the next two years. So if we get closer to what we're thinking over the next year, three to five, and when we tested this over the 17 years before we went live, we were able to add about seven points to that. So if we can add anywhere close to that, and the market's only earning three to five, people are really going to enjoy those extra returns at that time. Our best returns are actually in not up three to five percent, which is very good returns above average returns, but negative returns. We had double-digit spreads in all the four years that we looked at that the market in our tests, that the market was down. And that'll be very precious to have, not lose money. So you own the index plus protection. It's a more painless way to 100% long the market. And we think people will stick with us because it's...”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“It's more expensive 16% of the time cheaper 84% of the time. My apologies. So it's expensive. And we can go back in time and look at what's happened to the market over the next few years from this valuation level in the past. It's not a prediction. It's just saying, what's happened from this valuation level in the past? And the answer to that is your Ford returns have averaged 3% to 5%, two-year Ford's 8 to 10. Not negative because the market averaged 9 to 10% returns during those 28 years. And that's something we've come to. Get used to, it's not necessarily, will continue in the future, but that's what we've come to get used to, and we're more expensive than that. So from the 16th percentile, expected returns about three to five percent, 8 to 10.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Great spreads in bad markets. And let me just tell you where I think the market is. We value, we have a big research team, and we value all the companies in the S&P 500. We also value the top roughly 3,000 companies, but we value the stocks in the S&P 500 every day for the last 28 years. Bottoms up. So I can contextualize where do we stand today relative to those 28 years. And right now we stand in the 16th percentile towards expensive over those 28 years, meaning the market's been cheaper 84% of the time for the S&P, and cheaper 16% of the time. Then I can go back and look at what's happening.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Over time. Shocker. And so in bad markets, even worse than that, those stocks will get crushed. We're buying stocks that have huge cash flows. People have low expectation for them. That's why we're getting them so cheap. And so we don't pay for high expectations in the long book. So when the bad news comes in, we didn't pay for high expectations. So our longs tend to hold up better. Our shorts are getting killed.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“All those guys are going to get crutched. It turns out through all our research and everybody else is that buying things at 100 times earnings or things that are losing money is pretty much the world's worst strategy.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, those are our best markets for our spread. So obviously, the index portion wouldn't do all that well. But you would want, we view it as an index and you own protection. In other words, for that portion of your portfolio, you want to be 40, 50%, 60% net long. If that's where your risk tolerance is, what's the smartest way to take that 100% long allocation to the market of that 40 or 50, 60? And so what we like about Index Plus is it's really like owning the index with protection attached because you take high price cashing companies out or companies selling it a hundred times pre-tax free cash flow or 50 times. They're going to take those guys out and shoot them in bad markets. These are hope stocks. Those are going to get crushed.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. So it's as index plus. But the great news is that spread, that 90 by 90 longstood spread, actually does better in bad markets.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“We're short hope stocks. The 90 cents we're short are hope stocks. When you take risk in hope stocks and you get paid, then you take more risk and you take more risk and there's no correction. So there's a very tough period for our short book. Luckily our longbook were not, as I said before, we're not low priced to book, low price sales. Investors were cash flow oriented investors. And people get very optimistic about our cash flows and our businesses when things are going well. So our longs were able to keep pace with our shorts and even add three points a year to that.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Capital N where the SP is. And the most important part is that we didn't do nearly as well as I hoped to do in the next three years. This was a very tough period for us, even though we did very well relative to the other funds. We didn't do very well relative to our expectations. And the reason for that is because the market, you know, excluding the last two months, went straight up during those three years with no correction.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“So they're buying these. These are hope stocks based on the future. They're trading at $40, $50, $100 times earnings, but there are other reasons why people like them. Maybe sales are growing really quickly or other aspects of the fundamentals are going well. So we balance those fundamentals. So if you took a look at our long portfolio, we have just as good sales growth in the cheap stocks we're buying as the expense of stocks we're shorting. So they're not unbalanced that way. In other words, we're just getting them cheaper. They're cheaper. We're making we're buying the cheapest stocks we can find. We're shorting the most expensive subject to constraints that keep us in line. One is there's a zero beta. Two is that small stocks won't drive returns. Three is that we balance fundamentals. So all we're doing is buying companies they're doing really well and we're just getting them cheaper. And as a result, we just passed our three-year anniversary in this fund. We got five stars from Morningstar, but more importantly, we beat all 1,200 funds in our category, which is...”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't want to drive tracking her, so we don't want small stocks to drive returns. So if something's, let's say, 0.01% of the S&P 500, we don't want that driving our returns, but we may really like that stock. We may think it's really cheap. So we will buy more of it. And we may even buy five or eight times more of it, but that's only 0.05 or 0.08% not really going to drive returns. We'll buy as much as we can subject to the constraints that we don't want to drive too much tracking error. The third thing we do is we balance fundamentals. In other words, the stocks were short of stocks trading at 40, 50, 100 times earnings. These are hope stocks people really think they're buying them now, not on current earnings, but 2022. They think it's going to be really great.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“So we're trying to mitigate the losing part. So, what do we do? We're buying the cheapest stocks we can find and putting 90 cents into them in addition to the index, the dollar already in the index. And we're shorting 90 cents of our least favorite. But we want to balance that 90-90. So we have a zero beta on that 90-90 because we're already long a dollar in the market.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“What happens is we to the 250 out of the 500 stocks in the SP 500 that we like the best, we add 90 cents more of those in the order in which we like them. So the more we like something, the more we'll add to it And then we'll short or we'll sell 90 cents worth of the stocks we like the least. So we have a 90 long, 90 short, long short overlay on top of the dollar in the S&P. But we do some things to mitigate because obviously if we're going to zig and zag too much, we want to have tracking error, but positive tracking error. People don't mind winning all the time. It's the losing part that they don't like. Of course.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, we buy the individual stocks because, as you'll hear in a moment, we're very, very tax efficient. So it helps us to own the individual stocks. Then we go out and we buy 90 cents more of our favorite SP stocks within the mutual fund”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it sounds almost like an impossible puzzle, but I'll tell you how we solved it. We said number one, most people judge how they're doing for better or worse by seeing if they beat the S&P 500. That's in this country. And so we started there. We said most people are going to stick with things if it's beating the S&P 500 and lose if it's losing by too much to the S&P 500. So we started with that base for Gotham Index Plus. And we said you give us a dollar. We're going to buy the underlying stocks in the S&P 500. We're going to put a dollar into that in the weights of the S&P 500. So you give us a dollar. This is in mutual fund form. You give us a dollar. We recreate the S&P 500 bottoms up and put a dollar into the S&P 500. Okay? That doesn't sound so hard to do and don't think of ourselves as charging for that portion. That's pretty easy to do.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and it's very hard to find them up front before they beat the market. And if you do, it's almost impossible to stick with them because to beat the market, you have to do something different than the market. So, you know, picking active managers has been a loser's game for a long time, even if there are some that win, and it's a minority. I agree it's a minority. And so my partner, Rob and I took a look at this problem and said, how can we solve this? Because part of the reason we're doing this, we like making money, but if we're not making money for other people, which is there really is not a lot of sense. And once we got into the mutual fund area, we wanted to help individual investors take advantage of the fact that we think we know what we're doing. So we develop something called Gotham Index Plus.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“And the one I love is that 47% half. They ended up with the best 10 year record, but they spent at least three of those 10 years in the bottom decile, the bottom 10% of performers. So you know no one stayed with them. But that's how you end up with the best record. So here's a conundrum. A minority of active managers who beat the market.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“It's astonishing and it's typical, even for institutions. I wrote up a study of institutional managers. So I took a look at that study which showed the top performing institutional managers for the same decade, 2000 to 2010, who ended up with the best 10-year record, Quartile. And who ended up in the top quartile and what did that look like? And what the study showed was that 97% of those who ended up with the best 10-year record spent at least three of those 10 years in the bottom half of performance. Not shocking, but everyone, because to beat the market, you have to do something different. You're going to have periods of outperform, underperformance. And everyone did. 79% of those who ended up with the best 10-year record spent at least three of those 10 years, at least three of the 10 years in the bottom quartile of performance.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“So every time the market went up, people piled into that fund. When the market went down, they piled out. When the fund outperformed, they piled in, when the fund underperformed, they piled out. And they took that 18% annual gain when the market was flat. So that's great on an annualized basis over 10-year period to beat the market by 18 points. But for outside investors, they went in and out so badly that the average investor on a dollar weighted basis lost 11% a year.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, to beat the market, you have to do something different. But your returns are going to, as a result, zig and zag differently. So I wrote a book called The Big Secret in 2011, and I still say it's a big secret because no one bought that or read that. So I'll just tell you about it. In it, I wrote up a few studies of, remember, I wrote in 2011. So I wrote up the decade 2000 to 2010. This was a period where the market was flat, but the best performing mutual fund for that decade was up 18% a year. It's just that the average investor in that fund managed to lose 11% a year on a dollar-weighted basis by moving in and out at all the wrong times.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“But this is what we discovered, and this is my long winded way of answering your question, your very good question. How do we get into the Gotham Index Plus strategy, which is our new strategy? Well, it turns out, and we know this, but once we were able to come to registered investment advisors who talk to individual investors much more closely than institutionals, institutional clients, the problem with active management in general is that to beat the market, you have to do something different than the market.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“And ability to have their money anytime, it was actually turned into a very sticky business. And that's why three years later, we were able to get into the mutual fund business, not dilute our strategy because we were not charging exorbitant rates. We weren't charging a performance fee on our hedge funds. And so we were able to turn institutional quality hedge funds into mutual funds without diluting our strategy. If you're charging 2 and 20 to your, or 1.5 and 20, whatever it is to your investors, you can't move into the mutual fund space and just charge one and a half or two percent because without diluting your strategy because your institutional investors would get upset. So what ended up happening is we ended up going to the mutual fund area because we were charging very reasonable fees that would also work in the mutual fund area.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, well, the idea really was that when you give a gate, every September, October, people have to decide whether they want to lock up for another year or two. When you have monthly liquidity, you're never forcing them to make a decision, maybe at a long time. They can always have their money. And it's not a signaling device to say you should have a short time horizon. Actually, for what we do, you need a long time horizon. But what it is is a comfort to know you could always have it, and actually the money's stickier. So we thought those were two things wrong with the hedge fund business. People took out it all the wrong times. They're charging too much, so we would leave our investors with more money.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“That's wrong with the hedge fund business is that when people pay those kind of prices, they're not very patient. So it's the worst of all worlds. You know, you're charging too much to your clients and they don't stay very long because they're impatient when they're paying so much. So we made two decisions. One is to make our fees very reasonable so we didn't have a performance fee. We just had, depending on the strategy, you know, maybe a 2% management fee with nothing else on a hedge fund as opposed to 2% and 20%. That was pretty novel at the time. And the other was that instead of locking people in for a year or two or three, we said it's monthly liquidity. We don't want to run money for you if you don't want to be with us.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“We opened our first fund for institutions in March 09. We opened our first mutual fund in 2012. And we made some decisions back in 2009. Number one, we said that most hedge fund managers, because we were long, short investing with leverage, were charging too much. I had said on Penn's investment board for 10 years, UGAs for 10 years, and I saw most of the managers out there. Not many justify one and a half and twenty or two and twenty. And the other part...”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“But it turned out that only hundreds of names and being right on average was actually we could make more money because we would have much less volatile returns. We'd get what we expect more often by owning hundreds and being right on average. And so it was very easy to put it together as a long, short portfolio, buying our favorite cheapest stocks, shorting our most expensive. And because we were doing hundreds and because we were very good at valuing businesses on average as opposed to having to be right on every single one when you own six or eight, which turned out we made more money because we had spent less time getting negative returns with a diversified portfolio. When we discovered that we were willing to take outside money again.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“But my partner Rob Golstein and I looked at each other and said, you know, I would call that the not trying very hard method. We actually know how to value businesses. You know, couldn't we? It worked so well without trying. Couldn't we even improve on this? And so we built a big research team. You know, there's 13 of us now. We have a seven-person tech team. And what we're really trying to do is just take advantage of that initial research and actually valuing businesses. And what we discovered was that, and we were really building it for ourselves. Hey, can we do something with this?”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“And if you're trying to figure out whether that's a good deal or not. And if you could get $80,000 a year in rent, that's an 8% yield in a 2 or 3% interest rate environment. That today might look fairly attractive. So we sort of looked at how much cash is the business generating relative to the all-in-cost of buying the business. Then we looked at whether it's in a good business. When they have the money, what do they do with it? Okay, so we came up with two crude metrics for good and cheap. And, you know, Ben Graham said buy a cheap. Warren Buffett said if you buy a good business cheap even better, we combine those two. And we used a crude database, you know, simple database that was publicly available. Well, for a price that was publicly available. And we went and tested those two simple concepts, good and cheap. It's not like we spun the computer thousands of times. This was the very first test we did, and it came out so phenomenally well that I wrote a book about it called The Little Book that Beats the Market. That was the very first test we did. That's what I wrote up.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Still going to cost you roughly the $400,000, but because it's basically a stupid idea just to sell broccoli, maybe only earn $10,000. That's a two and a half percent return on tangible capital. And so all we said was all things being equal much prefer to own the business that can reinvest its money at 50% returns than 2.5% returns. So that was one metric. Good. That's what we looked at. If you read through Buffett's letters, that's the first thing he's looking for. The other metric we looked at is cheap. And the analogy I would use as a house, you know, it's a million dollar house. And one question you might ask is how much rent could I get for that thing?”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“What's a good business? And if you read through Buffett's letters, it's very clear. He's looking for businesses that earn high returns on tangible capital. And what that means is every business needs working capital. Every business needs fixed assets. How well can it convert that working capital into fixed assets into earnings? And in the book, the little book that beats the market, which I really wrote for my kids to understand this, I explained it this way. Imagine you're building a store and you have to buy the land and build the store and set up the displays and stock it with inventory and all that cost you $400,000. And every year, if the store earns $200,000, that's a 50% return on tangible capital. Maybe I'll open some more stores. Then I compared it to another store, and I called that store just broccoli. It's not a very good idea just to sell broccoli. Set up the displays, stock it with inventory.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'd been teaching at Columbia for a number of years. I've been doing that 22 years now. But at that time, in the early 2000s, I'd been doing it for a bunch of years, and we had been making money using the same principles that Buffett uses, you know, buying cheap good businesses. And I wanted to prove that together with my partner Rob Goldstein, I wanted to prove that what I had been teaching my students, what we had been using to make money, worked very well just like we had shown that Ben Graham's simple methodology still worked back in the 70s and early 80s. I wanted to show that what we had evolved more into, the Warren Buffett way of earning money, worked too. We wanted to prove it in the same way that we had written that paper about. So we hired a computer analyst that could help us mine through data, and we came up with some very simple metrics for good.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Fourteen years. And then in 2009, we started taking outside money again. And it was really, you know, really starts really back when I was in business school, and I had read that article about Benjamin Graham and actually did a study with a couple of my classmates, Rich Pazina, who's a famous money manager now and Bruce Neuberg, who's still a good friend of mine. And we did some work on Ben Graham's formulas, and we ended up doing a research paper and having it published in the Journal of Portfolio Management back in about 1981. And it always been fascinated by that. And over the years, we had really evolved more towards the way Warren Buffett invests, not just cheap, but cheap and good.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, so we didn't run outside money until again after we returned it all in 94, we ran, we had been lucky enough to keep our staff and run our internal money. How long did you do?”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Three months or six months. I mean, it's a really good analogy. I usually use the house analogy when people ask me how do we go about and valuing stocks? And people understand it completely when they're buying a house. There's certain things you would do. And we don't do any different than owning a business.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“All of a sudden, if you invested in stocks and did the same type of work, people think you're insane And it's just an interesting analogy that I always think of when people make fun of me that I was that concentrated.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, well, Warren Buffett has a good response to that as well. You know, he says, listen, let's say you sold out your business and you got a million dollars and you're living in town and you want to figure out something smart to do with it. So you analyze all the businesses in towns. Let's say there's hundreds of businesses and you stick to you find businesses where the management's really good. The prospects for the business are good. It's run well. They treat shareholders well. And you divide your million dollars between eight businesses that you've researched well in town. No one would think that's imprudent. They'd actually think that was pretty prudent. But when you get to call them stocks and you get stock quotes daily on these pieces of paper that bounce around and people put numbers on it and volatility and all these other things where really it's not that meaningful you know so in one sense if you're investing in businesses and you did a lot of research and invest in eight different businesses with the proceeds of your sale people would think you're a pretty prudent guy”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. They must have been thrilled. They were not thrilled. But after 10 years returned all of it, that would have made them really not thrilled. And the other way is to be concentrated. So six to eight ideas were usually 80 plus percent of our portfolio. So that portfolio management theory doesn't like that strategy very much. Not diversified.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, one of the ways to get those kind of returns is not to run a lot of money. So, after five years in business, we returned half our outside capital.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“And, you know, after a half hour, I got the terms I wanted from his brother, and then when Mike got back, he was not very happy. But that's how I got into business. He was a good partner for me.”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source
“He negotiated like this was the biggest deal of his life, even though I knew it was just something he did, deserted lunch one day or something. And he left the room because I wouldn't give in and he sent his brother in”
2018-04-20 · Masters in Business · Joel Greenblatt Discusses the Thrill of Investing · IDENTIFIED FROM THE TRANSCRIPT · source