April 4, 2016  |   

In this blog post we will talk about Joel Greenblatt. Joel is a hedge fund manager, investor, and writer. He is also an American academic and professor at the Columbia University Graduates School of Business. Which means he not only posses the knowledge but also the experience with Wall Street. The best part is, he has shared his tips and tricks to help teach others.

Here are a few of those tips and tricks:

Magic Formula Investing

Magic Formula Investing is an investment technique that uses the “principles of value investing”. In his magic formula, Greenblatt suggests purchasing 30 “good companies” and then it is all about holding, selling and doing it all over again. Sort of a wash rinse and repeat method, if you will. He writes more about this magic formula in his book ‘The Little Book that Beats the Market’ which we will talk more about later on.

The formula goes like this:

How it works:

  • Screen for top ranked stocks
  • Buy them
  • Hold for one year then sell
  • Go back to step one

To dig in and learn more so you can really put this formula to use, check out the site Magic Formula Investing. Another way to learn more is to purchase and read ‘The Little Book That Beats the Market’ (which we highly recommend).

‘The Little Book That Beats the Market’

‘The Little Book That Beats the Market’ is very well known in the Wall Street world and we at the ‘Win On Wall Street’ team recommend that you not only read this book but also sign up for the magic formula investing stock screener.

This book has also become one of the New York Times best sellers with over 30,000 copies. Greenblatt explains how investors can outperform the popular market averages by simply applying the magic formula that seeks out good businesses when they are at their “bargain” prices.

Interested in looking into some of Joel’s latest stock trades?

Check out his picks at gurufocus.com.

Have you read the book or used the magic formula? Let us know in the comments your thoughts and favorite tips.