Joel Greenblatt On Value Investing

In New York, at the fifth annual value investing congress, specialists from all around the world gather there to talk about investment ideas and strategies. One of the kings of value investing, Joel Greenblatt, is also there. The host of the show is curious to know where to look for value now. He tells that if a company can earn fifty percent of its capital instead of thirty two percents of its capital, that is a good company. What he talked about at the congress was just doing a ranking of stocks based on how could they return capital and how can you buy them at a cheap price.

Some cheap good companies come from health care or oil field. He is not so good at predicting where the market is going, but he did a study over the past 10 years, and saw that the market is down with two percent. When Joel Greenblatt looks at a company, he search for those that uses fixed assets and how well those companies use them, how much do they earn when they spend money. If they get high returns from what they spend, that is something that he is looking for. He says that there are very few places to protect yourself from inflation, so if you can find companies that can raise their prices along with inflation, this means protection, and stocks are a good protection against inflation overtime.

Joel Greenblatt quotes from this video:

  • Where the market goes is not the whole question
Submitted by YouTube Trader on Tue, 04/06/2010 - 18:58

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