December 13, 1957 |
Great Neck, New York
|Occupation||Founder of the New York Securities Auction Corporation
Former chairman of the board of Alliant Techsystems
|Website||Columbia Business School Faculty|
Joel Greenblatt (born December 13, 1957 in Great Neck, New York) is an American academic, hedge fund manager, investor, and writer. He is a value investor, and adjunct professor at the Columbia University Graduate School of Business. He is the former chairman of the board of Alliant Techsystems and founder of the New York Securities Auction Corporation. He is also a director at Pzena Investment Management, a high-end value firm.
Early life and education
Career in finance
In 1985, Greenblatt started a hedge fund, Gotham Capital, with $7 million, most of which was provided by junk-bond king Michael Milken. Gotham Capital was also a partner in Scion Capital, a hedge fund managed by Michael Burry. According to Michael Lewis, in his book The Big Short, while Michael Burry was betting against the sub-prime mortgage market through credit default swaps between 2005 and 2007, Gotham Capital led an investor revolt in order to withdraw their investment from Scion Capital due to lack of confidence in Burry's strategy. Burry instituted a lock-out of the assets under his control to prevent withdrawal by investors, including Gotham Capital. The strategy of using credit default swaps to bet against the excesses of the sub-prime mortgage market ended up paying off due to events leading to the 2008 financial crisis.Through his firm Gotham Capital, Greenblatt presided over an impressive annualized return of 40% from 1985 to 2006.
Value Investors Club
Greenblatt co-founded a website with John Petry called the Value Investors Club, where investors approved through an application process exchange value and special situation investment ideas. Membership is capped at 250 members and considered highly prestigious. A 2012 academic study showed that the recommendations of members do in fact appear to generate significant abnormal profits. The club awards $5000 bimonthly to members who provide the best advice.
Magic formula investing
His book The Little Book that Beats the Market introduced an investment strategy of "magic formula investing", which is a method for determining which stocks to buy: "cheap and good companies" with a high earnings yield and a high return on invested capital. His strategy is featured in The Guru Investor by John P. Reese.
In October 2009 he launched Formula Investing, an online money management firm that follows the investment strategy described in his New York Times bestselling book The Little Book That Beats the Market. Formula Investing is a money management firm that uses a proprietary stock-screening system and a disciplined approach to manage portfolios of value stocks. The firm offers its services to individual investors and institutions and to registered investment advisors, who can use Formula Investing as a sub-advisor.
Formula Investing uses a system that determines portfolio selections based on a combination of their relative cheapness and quality, as measured by earnings yield and return on capital. Formula Investing allows money to be managed in a disciplined manner that removes factors, like excess emotion and future projections, that often lead to bad investment results.
Greenblatt is also famous for his contributions to education in New York City. In 2002, he donated $2.5 million to P.S. 65Q, a public elementary school in the borough of Queens, whose students come largely from the neighborhood's South American and South Asian immigrant communities. This investment, equal to about $1,000 per student per year over five years, helped P.S. 65Q to go from a struggling school to an urban success story almost overnight. He continues to aid the school in Ozone Park currently as they have continued to rise. Recently the school and principal Rafael Morales received a progress report score of A, scoring 98 out of a possible 100 points.
In 2006, Greenblatt also helped start the Success Academy Charter Schools, then known as the Harlem Success Academy Charter School, an elementary school in the city's historically African American neighborhood. He is also a board member of the Institute for Student Achievement, a national leader in developing new small high schools and transforming large comprehensive public high schools into small learning communities.
- Greenblatt, Joel (2011). The Big Secret for the Small Investor: A New Route to Long-Term Investment Success. New York: Crown Publishing Group. ISBN 0-385-52507-9.
- Greenblatt, Joel (2006). The Little Book That Beats the Market. Hoboken, NJ: John Wiley & Sons. ISBN 0-471-73306-7.
- Greenblatt, Joel (1997). You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits. New York: Simon & Schuster. ISBN 0-684-83213-5.
- Greenblatt, Joel. Le petit livre qui bat le marché (translation in french of The Little Book That Beats the Market), Valor Editions. Hendaye, France, 2011. isbn=978-2-36117-001-1. External link in
-  Greenblatt's Life
- Times of Israel: "The Jewish Origins of Value investing" by Gabriele Grego December 8, 2014
- Gannon, Geoff. "Value Investing Encyclopedia: Joel Greenblatt". December 28, 2005.
-  Gotham Capital
- Value Investors Club
- "Exclusive investor club reveals the value of ideas" (PDF). Financial Times.
- "Do Fund Managers Identify and Share Profitable Ideas?". Social Science Research Network.
-  Value Investors Club
- Formula Investing
- How Is a Hedge Fund Like a School?, Feb. 20, 2006.
- Institute for Student Achievement board of directors
- Ziegler, Maseena (1 December 2012). "When Quitting Is Not An Option - How You Can Find Purpose And Fulfillment Through Your Career". Forbes. Retrieved 27 December 2012.