156: Joel Greenblatt: Legendary Investor and Author on Patience in the Investing Business
Update: 2024-10-24
Description
This recording took place at the London Value Investor Conference over summer, where Simon hosted a discussion with Joel Greenblatt. Joel not only founded and runs Gotham Asset Management, but was also an adjunct professor at Columbia Business School for 20+ years.
Joel previously ran Gotham Capital, where he achieved 50% annualised returns between 1985-1994 (34.4% net). Joel also helped Michael Burry set up Scion Capital in 2000.
In this discussion, Joel offers some exceptionally valuable insights into the issues of active versus passive, if valuation works pays, the need for patience, thoughts on concentration, and learning from mistakes.
He talks on the need for detailed valuation work in order to identify compelling valuation opportunities, but also of the need for patience for the market to recognise such situations.
He advocates passive for those ill-equipped to undertake detailed valuation work, and also recognises the challenges of owning too many overvalued and insufficient undervalued companies when you are passively invested.
He then explains how the best way to learn from one’s investing mistakes is to lose amounts of money that matter. Joel goes on to acknowledge that he would have been fired several times over, had it not been his own firm! A treasure trove of advice from a pro!
The interview is followed by a short Q&A. Thanks to the following for their contributions here: Steve Clapham of Behind the Balance Sheet, Mark Rubenstein of HPS Investment Partners, Ajit Dayal of Quantum Advisors India, and Cole Smead of Smead Capital Management.
The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors, and the World Gold Council.
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Joel previously ran Gotham Capital, where he achieved 50% annualised returns between 1985-1994 (34.4% net). Joel also helped Michael Burry set up Scion Capital in 2000.
In this discussion, Joel offers some exceptionally valuable insights into the issues of active versus passive, if valuation works pays, the need for patience, thoughts on concentration, and learning from mistakes.
He talks on the need for detailed valuation work in order to identify compelling valuation opportunities, but also of the need for patience for the market to recognise such situations.
He advocates passive for those ill-equipped to undertake detailed valuation work, and also recognises the challenges of owning too many overvalued and insufficient undervalued companies when you are passively invested.
He then explains how the best way to learn from one’s investing mistakes is to lose amounts of money that matter. Joel goes on to acknowledge that he would have been fired several times over, had it not been his own firm! A treasure trove of advice from a pro!
The interview is followed by a short Q&A. Thanks to the following for their contributions here: Steve Clapham of Behind the Balance Sheet, Mark Rubenstein of HPS Investment Partners, Ajit Dayal of Quantum Advisors India, and Cole Smead of Smead Capital Management.
The Money Maze Podcast is kindly sponsored by Schroders, IFM Investors, and the World Gold Council.
Sign up to our Newsletter | Follow us on LinkedIn | Watch on YouTube
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