On Value Investing: A Conversation with Joel Greenblatt W’79 WG’80

Joel Greenblatt W’79 WG’80, Managing Partner and Co-CIO of Gotham Asset Management speaks with Howard Marks, W’67, Chairman, Oaktree Capital Management L.P. The Howard Marks Investor Series at The Wharton School brings high-profile investors to the Philadelphia campus once per semester to share their real-world, practical investment perspectives with graduate and undergraduate Wharton students and other members of the Penn community.

Comments

1. 24:11 best part
2. This interview is truly worth it's weight in gold- Thanks Wharton School for posting it.
3. Check audio levels....ever? If you have to turn everything all the way up to 11 then you are doing it wrong!
4. Ummmmmmm
5. Uhhhhhhhhh
6. Jim R. mentioned not by name at 23 minutes. Worked in the supermarket.
7. Most Graham analyses today only follow the quantitative part of Graham's recommendations (NCAV, Graham Number etc) without the supporting qualitative criteria, thus leading to the misconception that Graham only recommended inexpensive stocks.
   
   Benjamin Graham actually did recommend paying more for quality and growth. His only prerequisite was that there be the Margin of Safety between Price and Value, whether the Value be qualitative or quantitative.
   
   In fact, when we look at Graham's actual stock selection rules, we see that most of the rules were concerned with the qualitative assessment of a stock.
   
   Benjamin Graham - also known as The Dean of Wall Street - was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.
   
   Warren Buffett once wrote a detailed article explaining how Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called "The Superinvestors of Graham-and-Doddsville".
   
   Buffett describes Graham's book - The Intelligent Investor - as "by far the best book about investing ever written" (in its preface).
   
   Graham's first recommended strategy - for casual investors - was to invest in Index stocks. 
   For more serious investors, Graham recommended three different categories of stocks - Defensive, Enterprising and NCAV - and 17 qualitative and quantitative rules for identifying them. 
   For advanced investors, Graham described various "special situations".
   
   The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
   The last requires more than the average level of experience, intuition and talent. Such stocks are not amenable to impartial algorithmic analysis, and require a case-specific approach.
   
   But Defensive, Enterprising and NCAV stocks can be reliably detected by today's data-mining software, and offer a great avenue for accurate automated analysis and profitable investment.
8. What Buffett did more than anything was own an income generator. Without that he wouldn't be as wealthy.