Oldest Joel Greenblatt Quotes
You can find Oldest Joel Greenblatt quotes, oldest Joel Greenblatt book quotes, the most impressive sentences and paragraphs on 1000Kitap.After more than 25 years of investing professionally and after 9 years of teaching at an Ivy League business school, I am convinced of at least two things:
1. If you really want to “beat the market,” most professionals and academics can’t help you, and
2. That leaves only one real alternative: You must do it yourself.
Sayfa 21Kitabı okudu
So, here’s what you need to know:
1. Buying a share in a business means you are purchasing a portion (or percentage interest) of that business. You are then entitled to a portion of that business’s future earnings.
2. Figuring out what a business is worth involves estimating (okay, guessing) how much the business will earn in the future.
3. The earnings from your share of the profits must give you more money than you would receive by placing that same amount of money in a risk-free 10-year U.S. government bond. (Remember: Last chapter we set 6 percent as your absolute minimum annual return when government bond rates fall below 6 percent)
4. No, I haven’t forgotten about the magic formula. But you’re going to have to stop bugging me about it, okay? Sheesh!
Sayfa 49Kitabı okudu
In any case, ready or not, here comes the summary:
1. Stock prices move around wildly over very short periods of time. This does not mean that the values of the underlying companies have changed very much during that same period. In effect, the stock market acts very much like a crazy guy named Mr. Market.
2. It is a good idea to buy shares of a company at a big discount to your estimated value of those shares. Buying shares at a large discount to value will provide you with a large margin of safety and lead to safe and consistently profitable investments.
3. From what we’ve learned so far, you wouldn’t know a bargain-priced stock if it hit you in the head.
4. Being a few cards short of a full deck, you might as well keep reading.
That’s the point—you would rather have a higher earnings yield than a lower one; you would rather the business earn more relative to the price you are paying than less!
Sayfa 66Kitabı okudu
Here comes the summary:
1. Paying a bargain price when you purchase a share in a business is a good thing. One way to do this is to purchase a business that earns more relative to the price you are paying rather than less. In other words, a higher earnings yield is better than a lower one.
2. Buying a share of a good business is better than buying a share of a bad business. One way to do this is to purchase a business that can invest its own money at high rates of return rather than purchasing a business that can only invest at lower ones. In other words, businesses that earn a high return on capital are better than businesses that earn a low return on capital.
3. Combining points 1 and 2, buying good businesses at bargain prices is the secret to making lots of money.
Sayfa 70Kitabı okudu
Graham’s formula involved purchasing companies whose stock prices were so low that the purchase price was actually lower than the proceeds that would be received from simply shutting down the business and selling off the company’s assets in a fire sale (he called these stocks by various names: bargain issues, net-current-asset stocks, or stocks selling below their net liquidation value).
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