Joel Greenblatt (00:02:53):
The business had changed that much in a year. When I read just a little taste of Ben Graham, then I started everything that Ben Graham wrote. Then, from that Forbes article, a light bulb went off, literally a light bulb went off when I read that article about a little investing formula and describing just a very principle of no, these are actually ownership shares of businesses that you value and buy at a discount, and that turns out to be a pretty good strategy, and the bigger discount you can get, the better investment it might be, and that Mr. Market was pretty crazy at times, and you could take advantage of that if you knew what you were doing.
Joel Greenblatt (00:03:27):
All of that resonated with me, and none of the stuff that I had learned in business school, at that time was all efficient markets, made any sense to me. I read that article, a light bulb went off. I read everything about Ben Graham and then off to Warren Buffet over the years. I actually started … I wrote a paper for my master’s thesis at Wharton updating Graham’s formula to see if it still worked with a couple of my cohorts, and my friend, Bruce Newberg and Rich Pzena, and we didn’t really have … The computers were the size of, I don’t know, four large classrooms. It would be the size of the deck 10 computer that Wharton had and you needed punch cards.
Joel Greenblatt (00:04:05):
Of course, we couldn’t afford a database, so we actually took the old standard [inaudible 00:04:10] stock guides in manually. Went through the As and Bs and collected over a period of eight or 10 years data, ran it through the computer. It was a bigger operation than I’m making it sound, and it turned out that, lo and behold, Graham’s formula still work incredibly well. We got published in The Journal of Portfolio Management, our master’s thesis, and I raised a fund before I went to law school from some of my father’s friends to invest that way.
Joel Greenblatt (00:04:34):
So, I went off to law school, but I also had my hand in investing and a lot of my friends had gone off to work already and they seem like they were doing okay. Once again, I figured, how could I lose? I was at Stanford Law School and it’s good to get that credential. But one day I called up my mother, and I’m from a Jewish family, so your choices were doctor her lawyer. Other than that, her head was in the oven. I told her I was dropping out of law school and go to Wall Street. I found an opportunity, a startup hedge fund, man named Alan Slifka, who was running L.F. Rothschild’s arbitrage department was setting up his own fund, and I’m an entrepreneur at heart.
Joel Greenblatt (00:05:15):
I went and joined him with a couple of other people and I was the only research guy, so it was a great position and took a leave of absence and never went back.
Trey Lockerbie (00:05:24):
Okay. So, at this point, you’re running your own highly successful, highly concentrated fund that’s producing 50 plus percent returns every year for the first decade. So, so far so good. This sounds like every investor’s dream scenario. What’s so fascinating is that it’s, at this point, you decide to pay out your outside capital and shut down the fund to outside investors. Now, I’ve heard that managing money is as much managing people. Is this what ultimately led you to this decision?
Joel Greenblatt (00:05:53):
No, not actually. What I did was we had done well over those 10 years to make enough money, and my partner, Rob Goldstein, who joined me in 1989, right out of school, I hired him right out of school, we’re still together. I liked everyone I was working with and my partners were actually excellent. I mean, most people don’t yell at you when you make 50% a year, even though we had our ups and downs. Just to tell you a little story, for the first 15 months after I started Gotham, we were up a hundred and … Something like 140%.
Joel Greenblatt (00:06:24):
I called up all my family and friends and said, you got to invest. We’re doing so well and everything else. Of course, the first six months of business, we were down 17% after I took in all this money. I was ready to kill myself, and nothing to do with my own money, really just paying me to lose money for others. We ran a very concentrated book. So, every couple years we’d wake up to lose 20% or 30% of our net worth, just because one or two ideas weren’t going our way. By concentrated, I mean, six or eight ideas where traditionally 80 plus percent of our portfolio, so not so hard for one or two to go wrong and then to lose that kind of money in a few days.
Joel Greenblatt (00:06:56):
That was just part of the deal. Part of the deal, either you got something wrong or market didn’t like what you bought for a day or two, and so, or a week or two, or a month or two. So, you would take those type of draw-downs. Like I said, for me, I knew what I owned, so it did bother me. It was really the outside investors, the pressure I put on myself to try to perform well for the outside investor. Because we were up that 50% a year before our fees for the 10 years, we had enough assets on our own to return all the outside money, but keep our staff.
Joel Greenblatt (00:07:27):
I loved working with everyone that I was working with. We were able to afford to keep them, and then just took some of the outside pressure off of worrying about outside investors was the basic idea. I’d say it did about half of the job, meaning it certainly took pressure off, but doesn’t take all the pressure off. Investing is still always a challenge, especially with a concentrated portfolio, but it definitely helped a lot. I love the business of investing. If I wasn’t having the best time possible, after some period of success, you’re a little bit crazy to add more stress to it, if you can avoid it. That’s basically why we did that.
Trey Lockerbie (00:08:05):
Maybe walk us through the strategies a little bit that were around those six to eight holdings that you were holding in the portfolio.
Joel Greenblatt (00:08:12):
I wrote a book called You Can Be Stock Market Genius, which was basically a compilation of war stories for that 10 years. So, explaining the types of things we did. Some of them were longer-term holds, but a lot of them were special situations which could last two or three years, and a special situation could just be as really cheap, and it’s cheap for a reason. When you have a concentrated portfolio and you’re willing to take big positions, because this is always fighting to get into the portfolio. So, you’re always waiting, what do I own? And do I like this other thing better?
Joel Greenblatt (00:08:43):
We didn’t leverage, but we were pretty fully invested most of the time. When you found something new and even if you had something that could earn 15% or 20% a year, and it had this amount of risk, but you saw something that could earn 50% a year, that obviously, if you force rank your positions, you’re going to be knocking things out of the portfolio that maybe if you ran a larger portfolio or a more diverse portfolio, you would keep. So, it was really an organic process based on, what are the opportunities set?
Joel Greenblatt (00:09:13):
When you’re not running tons of money and you’re looking at special situations, they all come up about in different ways, whether it’s a recapitalization or a spinoff, or something new is happening in the business, restructuring. They play out over a period of time. At some point, people recognize that value so your rate of return may still be good, but come down a little bit. I would say that period of time, and that lasted probably over 20 years, really was closer to the way Buffet probably ran his partnership from mid ’50s to when he gave his money back in 1969, or whatever it was.
Joel Greenblatt (00:09:49):
I think those opportunities are still there. I think Buffet said, even as late as 10 years ago, whatever he said, when the year, he might have said in 2000, he said, “Look, I could earn 50% a year if I had a million dollars at any time.” If you have less money, there’s always nooks and crannies that you can find in the stock market. His saying is, a fat wallet is the enemy of investment returns. I once took my class, I taught at Columbia for 23 years, and I once took my class out to visit him in Omaha.
Joel Greenblatt (00:10:18):
As he does with many of his visitors, he actually handed me his fat wallet. So, I got to hold his a fat wallet. Really hasn’t held him down that badly, but still, I’m sure he would do a lot better with less money.
Trey Lockerbie (00:10:29):
Another part of the evolution of your career that I find really interesting is that you went from this highly concentrated portfolio to now running a very diversified portfolio. Then you eventually opened it up to outside capital again. Maybe walk us through the decisions that.
Joel Greenblatt (00:10:44):
It came about organically. We were running money for ourselves, and we certainly were very Buffetized in the late ’80s, early ’90s, looking for quality businesses, and a little different than where we started with the net nets. That was the study we did, stocks selling below liquidation value, which was the study I did with my cohorts at Wharton that got published on Ben Graham’s stock-picking formulas. But I had always been curious to go and test, like we did in business school, this was the early two thousands, what strategy we had evolved towards, which is much closer to way buying good and cheap businesses, not just cheap.
Joel Greenblatt (00:11:20):
Buffet had that little twist that made him one of the richest people in the world. If I can buy a good business cheap, even better. For years, I’ve been writing about it, I have been teaching my students that concept, and I wanted to go back and test, could I prove that buying good and cheap was a good strategy. Maybe 2002, 2003, we hired a programmer to just basically do research on good and cheap. The very first test we ran, I ended up, this was not spinning the computer thousands of times to see what formulas might work. We said, hey, let’s use a crude metric for cheap and let’s use a crude metric for good, which was return on tangible capital.
Joel Greenblatt (00:12:01):
If you read two Buffet’s letter, that’s essentially what he’s looking for. And let’s just weight them 50/50 and let’s run a test. That was the very first test we ran and the results were pretty phenomenal. I wrote them up in a book called The Little Book that Beats the Market a couple of years later. It wasn’t a question of, oh, what’s the best way to make money? It was a question of, the very first inclination we had using a crude database, using crude metrics for cheap and good, could we prove? I think that’s a lot more proof that, that’s the very first thing we chose worked incredibly well, where the combination of cheap and good in the first decile beat, the second decile beat, the third decile beat.
Joel Greenblatt (00:12:38):
It was pretty phenomenal. I thought, what a great way. I’d been teaching for a long time already and writing, and what a great way to share these concepts and make them so blatant to investors that they would take them to heart. What’s not necessarily the best thing that you could come up with to make money, but it was very powerful. It really exemplified a lot of the teachings of Buffett and what I had been trying to convey to my students and in my writing. I thought, wow, what a great thing to share. That was the very first test we did was that, but it also set off a light bulb, my partner, Rob Goldstein, and I in our heads, as soon as we …
Joel Greenblatt (00:13:14):
We call that the not trying very hard method, meaning we just used crude metrics, crude database. We said, we know how to invest, we know how to do the work. These aren’t pieces of paper to us. These are ownership, shares of businesses that we’re actually valuing, and we actually know how to value businesses. What if we put a little effort in, could we improve on this? Of course, we did, and built a big research team and everything else. We really were just building it for us to see if we could put together a diversified portfolio of cheap companies and expensive ones, and see if we could come up with strategy that was also good.
Joel Greenblatt (00:13:48):
It turned out so good, our research, that we ended up starting in 2009, taking outside money again. One of the discoveries we made was that we could actually, following the style, diversified portfolios on the long and short side, make more money with a diversified portfolio than a concentrated portfolio using the style. The reason for that is that when you have a concentrated portfolio, and concentrated, we own 300 or 400 stocks on the long side and 300 or 400 on the short side, choosing from the 3,000 largest, let’s say.
Joel Greenblatt (00:14:18):
We made more money doing that than if we bought our 50 cheapest and shorted our 50 most expensive. The reason for that is those become much more volatile, and there are bad periods. If you think back to let’s say 1999 or 2000, you could really get in trouble just buying the cheapest and shorting the most expensive. Eventually it works, but if you’re going long, short and put on leverage, that’s pretty dangerous. One of the reasons why an insurance company would insure five people, no matter what kind of underwriting they do, how much research they do on how healthy you eat and what your medical stats are, some people step off the curb at a bad time and ruin all those numbers.
Joel Greenblatt (00:14:54):
You can tell I don’t sell insurance. It turned out that you actually made more money over time with a diversified portfolio, and there’s nothing wrong with what I was doing, but with a concentrated portfolio, we were doing that for a long, long time. It was a lot of fun. We were good at it. This was fascinating to us, running a big research team, following a lot of companies, trying to be right on average was another way to make money. It was maybe a smoother ride. It didn’t come with every two years losing 30% or 40% of your money.
Joel Greenblatt (00:15:25):
I still teach the other method of being concentrated. I still teach my kids that method. I think it’s a great way to make money, and they’re not better or worse. They have different sort of … It’s different strokes for different folks. If you can’t take the pain and you’re too concentrated, you’re gonna quit after a bad period, then you’re not really going to collect at the end of the day. For most people who don’t know how to value companies, I wouldn’t say concentrating like that, unless you really know what you’re doing is a good strategy.
Joel Greenblatt (00:15:52):
This is a more widespread strategy for more people, maybe a smoother ride. They’re both great. They’re both full-time jobs, to really do a good job drilling deep on just a handful of companies, or covering a wide universe of companies. They’re both full-time jobs. People ask me this question all the time, which is better, or why did you switch? It’s just different ways to make money. I was fascinated by one way for a long time. I showed that it could be successful. Then we really were pursuing this more diversified strategy just because it was fun and it was fascinating.
Joel Greenblatt (00:16:27):
It turned out, when we learned that we could make more money, we actually ended up with higher, slightly higher returns, but a lot less volatility with a more diversified portfolio following the strategy, that it didn’t hurt us to take outside money, and it was a very expensive operation because you need a lot of computer wizards and you need a lot of research people to do the actual fundamental work. So, it made sense for us to take outside money, but we went about that backwards. That wasn’t our goal. Our goal was to do this for ourselves. Also do something different, see what we learned.
Joel Greenblatt (00:16:58):
All the principles are still the same. Nothing’s really changed. Just sort of portfolio strategy. I love them both, depends who you are. It depends what your risk tolerances are and what you enjoy doing, I would say. They’ve both been fun journeys. I love both methodologies. I wouldn’t read anything into it that we’re not doing that concentrated investment. If I went to start again, I’d go do that again.
Trey Lockerbie (00:17:21):
I want to talk about the research you mentioned, because it led me to write this book called The Little Book That Beats the Market, or The Little Book That Still Beats the Market, as it’s called now. This is one of my all time favorite investment books, and it’s the one that I gift out the most to friends and family when they ask me for advice. It’s mainly because you do such an amazing job at distilling down the ideas of Buffet and Graham into just a couple of metrics. What’s so fascinating about this book is that you back test a screening of stocks using only the return on capital and the earnings yield ratios from 1988 to 2004, and the highest rank stocks in this portfolio end up producing a 30% return on investment. Just amazing returns. What I’m curious about is, if you’ve kept up with it, have you tracked the formula since 2004, and how has it done till today?
Joel Greenblatt (00:18:10):
I don’t have the exact data, but my best guess is that it performed pretty well through maybe 2016, in the last three or four years, with the way value, that specific formula, the way of value as underperformed would struggle. Then the same thing happened really in ’98, ’99. There was the hugest reversal of all time in 2000, 2001, 2002. I always tell the story that I started Gotham in 1985, and we were always profitable. We always made money. We had a very nice record, but in ’98, the market was up 28.6%.
Joel Greenblatt (00:18:44):
That was our first loss year. We were down 5%, and we were just long only, we weren’t shorting stocks. Weren’t doing anything like that. We were down 5% and that’s a big difference from the market being up 28.6 as measured by the S&P 500. In ’99, the market was up another 21%. That was our second year of losing money. We were down 5% again, and so pretty discouraging. I remember teaching at Columbia at that time, and I wouldn’t say the kids were throwing erasers at us, but I would say that, particularly at me, you’re out of it, value investing doesn’t make sense, everything else, but that’s how I felt, and that’s sort of how I think my students were looking at me, and I don’t think I was projecting.
Joel Greenblatt (00:19:20):
In 2000, the market was down 9%. We were up 114%. It wasn’t that I think we were idiots in ’98, ’99, and then all of a sudden, geniuses in the year, 2000, I think what actually happened was we just finally got paid for all the hard work we did in ’98, ’99, finally paid off in 2000 when people decided to value some of the things we were valuing in those businesses. It’s a good lesson. I don’t think right now, what I would say is I think some of these big companies, Amazon, Google, Microsoft, Facebook, these are great businesses. I don’t think we’ve seen the likes of them before, just the type of franchises these businesses are.
Joel Greenblatt (00:20:02):
For the most part, we have positions in these names, big positions. I think they justify their valuations, even if they’re not quite as cheap as they were, but just to point out, in 2019, so this is pre COVID, there were about 313 companies that lost money, 2019, pre-COVID. Of those that now that had a market value over a billion dollars at the end of 2020, the average return for those 313 money losing companies in 2019 was over 100%. The median return was 70 something percent. Those hundreds of companies are being priced as if they’ll be the next Amazon, Google, and Microsoft.
Joel Greenblatt (00:20:38):
I’m betting only a handful will be in the great businesses and not all of them will deserve their lofty valuations. I see some signs. It’s nowhere what I saw in the internet bubble, but I do see some signs of froth, certainly on the small cap money losing businesses. Some of them are valuable, but it’s traditionally been the world’s worst investment strategy to buy a company’s trading at 200, 300 times, or one’s losing money. I’m expecting, well, I would just say that it might be a good time for the magic formula again.
Trey Lockerbie (00:21:09):
Well, you touched on teaching. I want to talk about your decision to become a professor at Columbia, teaching value investing to MBA students. What was appealing to you about becoming a professor?
Joel Greenblatt (00:21:19):
When I was pretty young, and I guess I told you about my sort of epiphany I had by reading Ben Graham and then reading his books, and then reading all the things that Buffet wrote subsequently as his best student. I always thought that, if I were successful, I’d like to give back in some way, and writing and teaching, I thought would be fun, and sort of sharing what I know one of the few little areas of the world that I know something about. Could I share that with others? Because others had been kind enough to share with me. I would say Columbia was a unique place.
Joel Greenblatt (00:21:50):
To be honest, I initially wanted to go back and teach a Wharton because that’s where I went to school. They were still teaching efficient markets. They didn’t have much interest in a practitioner’s view of how the world works. Columbia was very centered that way. Maybe one of the only, at that time, only places, and maybe one or two others, and it was the home of Ben Graham. I started out teaching security analysis, which was his course. So, it wasn’t a lore there, and their focus was that they valued what I had to bring to the table for MBAs, and I would say that was very, very aware back in ’96, that anyone would care to teach that way.
Joel Greenblatt (00:22:27):
They had a value investing place, which was frowned upon pretty much everywhere else. It was exciting to be able to share what I knew. I would say, I think I got pretty decent at teaching after three years or so. Once again, I can apologize for my first three years of students, but hopefully they got something out of it as well, just because I did try my best, but I would just say teaching, I have a lot of respect for the teaching profession, and to do it well is very hard. What I would say is, I think, in those first, at least 10 or 15 years, I learned more from teaching, and trying to describe in very simple ways the thought process that I had.
Joel Greenblatt (00:23:10):
I think I learned more trying to be concise and trying to be clear and trying to be simple, and simplify very important investment concepts. I think I learned more by doing that and clarified my own thoughts than whatever my students got, and I hope they got a lot, but I think I got more. It was a win-win, I hope. That was exciting. I think it helped my writing. I think it helped me be more clear. I wrote You Can Be Stock Market Genius before I started teaching. I thought I wrote it in a friendly way, but I realized, after I started teaching MBAs, that I really had written that at an MBA level.
Joel Greenblatt (00:23:42):
Part of the reason I wrote The Little Book That Beats the Market was to take back a few notches. By then, I had kids, I had five kids at that time, and so I kind of knew what a sixth grader would know, and I try to just keep my oldest guy, who I think was in sixth grade when I started writing The Little Book. Instead of writing it an MBA level, which I thought I was writing at a sixth grade level, when I wrote You Can Be a Stock Market Genius, but I’d been in the business so long I didn’t realize what I was assuming people knew.
Joel Greenblatt (00:24:05):
The Little Book gave me a really a great chance to go back, say, if you’re a smart sixth grader, how can I say this in a way that’s simple enough and clear enough that you can start, and as you know, starting early matters.
Trey Lockerbie (00:24:19):
Joel, if investing is like the game of monopoly, it seems like the person acting as the bank is handing out more and more money to the players who are currently winning the game. I’m of course, talking about the Fed’s efforts with quantitative easing and this low interest rate environment we’ve been in. Has your investing approach changed through this environment?
Joel Greenblatt (00:24:39):
Well, that’s a great question. What I’ve written before when rates are extraordinarily low, in other words, is the fed manufacturing low rates to boost the economy. Are they mispricing money? Which kind is important. I would say, well, they can only control the short end, but if they go out and buy long-term bonds, they can also, at least artificially, for time, keep long rates artificially low as well. How does that affect your investment alternatives, particularly the stock market?
Joel Greenblatt (00:25:07):
What kind of yield do you need from earnings … Be entitled to the earnings of a business relative to the price you pay. How does that compare to your other alternatives? Well, of course, that’s going to make most stock investments of earning businesses more attractive on a relative basis, but of course, current rates aren’t the important thing. The important thing are normalized rates if you’re a long-term holder of stocks. What are the normalized rates? The answer to that is, I don’t know. My guess is they’re being kept artificially low. My guess is that inflation isn’t really measured properly, if you include asset inflation, perhaps it’s not, including stocks and houses and a bunch of other things that might be inflated that aren’t included.
Trey Lockerbie (00:25:51):
That’s actually been a pretty frequent topic of discussion for us, which is basically, what is a proper discount rate in today’s environment,
Joel Greenblatt (00:25:58):
Not being so smart. You have to build in a large margin of safety, so to go back to first principles. What I wrote in 2005 in The Little Book was that, regardless of where rates are, I use 6% as my long-term risk-free rate. If I’m going to buy inequity, I want it to beat that 6% on a risk adjusted basis, or I won’t buy it. That doesn’t mean I can’t buy something for 30 times earnings or 30 times cashflow that, let’s call it after tax cashflow that’s a 3.3% rate, if I think that’s going to grow over time, I could beat the 6% flat risk-free rate, and that’s fine. There’s nothing wrong with that.
Joel Greenblatt (00:26:39):
This is not like a hard fast rule, oh, I can’t pay more than 16 times earnings or something. That’s not what I mean. I mean, what are my normalized cashflow is going to be over a period of time? What are the risks that I’m going to get those cashflows? How does that compare to a 6% risk-free rate that remains steady? If I can’t beat that, I have no business investing in that business in my mind. I still think that holds. I mean, if you’re saying I’m building in too big a margin of safety, well, so be it. One of your alternatives, and Seth Klarman’s brought this up a lot, one of your alternatives for investing is not just what’s in front of you today, but what you might have an opportunity to buy six months, 12 months, or two years from now.
Joel Greenblatt (00:27:18):
Okay. Your opportunity set is not just what’s in front of you today, and what can I compare? What can I buy now? The question is, if I keep my powder dry, what can I buy six months, 12 months, two years from now, and how does that compare to what I can buy today? I think that’s a very important concept that people miss, because you can, at 1% interest rates, decide that, hey, this thing’s trading at a hundred times and it’s growing a little, so that’s better than a 1% flat. Of course, I would say that’s not building the risks.
Joel Greenblatt (00:27:46):
I would say junk bonds that just went under yesterday 4% for the first time on average, aren’t really working in risk of default very much, or bad things happen over the life of the bonds, and so my guess is that’s not a great thing to be doing, even if it looks comparatively rich relative to the risk-free, the short-term risk-free rate, or even the 10 year rate, or even the 30 year rate. I don’t really have to know the answer to your question. I would just say I haven’t changed my standards.
Joel Greenblatt (00:28:17):
If I can beat a 6% risk-free rate when I’m thinking through and I have the security. I think, number one, the earnings are going to grow so that’s a winning bet, and that I have pretty good vision. I feel secure in my knowledge. My circle of competence says, hey, I think this is really going to happen and I feel pretty secure about that. That’s still my standard, and I’m not going to go buy anything that can’t beat that. I would argue that’s a smart way to be. I wouldn’t even tell you that the S&P, which is dominated by some of those big companies, even at, whatever it’s at, a three, a little over 3% yield, free cashflow yield, we would have to discuss.
Joel Greenblatt (00:28:57):
It’s a market cap weighted index. The first five names are like 30%. What of those is going to grow? You could make a case for some of those names yet, is that even a smart discussion to have? Because the market is not a stock market. As the saying goes, it’s a market of stocks. I really tend to look at it that way. I look at individual stock. An index investor may have a different answer, depends what index, depends where, and everything else, and they may have a challenge. Because if you don’t know how to value a company, then you’re stuck doing indexes, which you could do tax efficiently, which has been a good deal last 50 years, over 10% a year for the S&P. It’s possible that continues.
Joel Greenblatt (00:29:37):
If not, it could still be pretty good. But if that’s where you stock, then you could argue to keep some powder dry maybe for a better buying opportunity for some of your investment. People don’t tend to be good at that either. So, if you were my, let’s call you my sister, they were asking for advice, I still think that would be the best advice, go buy S&P ETF, and with most of your money, if you want to play with a little bit. I wrote another book called The Big Secret. I always say, it’s still a big secret because no one read it or bought it.
Joel Greenblatt (00:30:06):
But in that book, I talked about picking an allocation to equities that you’re comfortable with. Whether it’s 60% long, because the market can fall 40% or 50%, you’re going to get out of it. You can’t take more than a 25% loss. Maybe you’re only better off being 60 or 70% long, but whatever that is, if you get really optimistic, maybe you can go up 10 points to seven, if your standard allocation is 60%. If you get really pessimistic, you go down to 50, I said you’re going to be wrong, but at least you’re limiting how much you’re going to mess up by, by limiting how much you go up and down.
Joel Greenblatt (00:30:37):
In fact, that’s how major institutions and endowments and every … Run their portfolios. They have a weighting. They’ll go up a little, they’ll go down a little, but generally, they have a weighting that’s appropriate over the long-term.
Trey Lockerbie (00:30:50):
Looking at your funds, they appear to be very highly focused on us stocks. I’m curious if you ever invest outside of the US into other markets or even into other assets like gold or bonds, etc.
Joel Greenblatt (00:31:03):
Once again, we go to circle of competence. If you’re talking about Australia, if you’re talking about Canada, if you’re talking about parts of Europe, I feel pretty comfortable investing, for the most part, in many of those businesses and those economies and those legal structures. When you get outside of that area, it becomes a little bit different for me. Not for others. I think there’s huge opportunity. If you want to study an area and you know the laws and you know how that works, I think no more power to you. I think, looking more off the beaten path is always a great thing to do.
Joel Greenblatt (00:31:34):
I will say that the rule of law in the United States and some of these other much more established countries, property rights, they’re pretty secure. If you said, what do you think of China, I would say, I don’t feel comfortable. It doesn’t mean other people can’t make money. It doesn’t mean other people can’t be comfortable investing there, obviously economy’s growing there. I wouldn’t call it a kleptocracy, but I would say that it’s one man rule and anything can happen there, and I wouldn’t feel having a big chunk of my portfolio, might be a portion of my portfolio, in more risky things. There’s nothing wrong with that, but that’s not something that I would go seek out.
Joel Greenblatt (00:32:12):
I think that the United States still, out of the entire world, despite what, maybe some questions getting a little worse in the last few years, and even now, and not knowing tax policy and a lot of other things, I still think is one of the greatest places in the world to invest in. As Buffet would say, if you have a basketball team and you’re relying too much on Michael Jordan, is that a good thing or not? Well, as long as you have Michael Jordan, you might as well take advantage. I think United States is one of those types of places that has to be a big chunk of your portfolio. I think it’s one of the greatest places.
Joel Greenblatt (00:32:40):
It doesn’t mean you can’t do other things. There are places off the beaten path where if you have an edge or knowledge, sure, go for it, but that’s not where my expertise is.
Trey Lockerbie (00:32:49):
Well, taking that analogy of having Michael Jordan on your team, I want to talk a little bit about position sizing, because I’ve heard you say that your largest positions aren’t usually because you expect the most yield, but it’s because you actually expect the least amount of risk. Maybe talk to us about that.
Joel Greenblatt (00:33:06):
Most people say, “Oh, I took a 10% position, I took a 20% position. Oh, I’d never take a 30% position.” I don’t think that’s the right analysis. If you’re good at what you do and you have confidence in what you’re investing in, and realizing that maybe you’ll be wrong so you have to factor that in, so your level of certainty. But I look down not up when I invest. If I think I can make 10 times my money, that doesn’t make it my favorite investment. If I can invest a lot of money and I don’t see how I’m going to lose anything, or maybe lose 1%, but maybe I can make 5% or 10%, that might be a much better risk reward for me.
Joel Greenblatt (00:33:47):
Typically, when I’ve done it correctly, my largest positions have been the ones where … Largest positions on an AUM basis, a percentage of assets under management business would be those I don’t think I can lose money. I don’t mean losing money like a bad mark, stock market mark. It means that if you own a stock for $10, that has $9 in net cash and a good operating business, that has a nice franchise, it doesn’t mean that stock can’t go down to $6. It just means, the way I’m looking at risk is boy, if I had my choice of when to sell this over the next few years, I don’t think you’re going to lose more than a dollar or two in that name, not where it could trade on any particular day.
Joel Greenblatt (00:34:31):
But if I can patiently get out of that position sometime over the next couple of years, what’s my realistic loss. That would be my risk in my mind. If that risk were not large relative to my purchase price, then I could take a very large position. I’ve had positions occasional, but positions that have equal 30% or 40% of assets for just that reason. Some of them, the bigger ones have been, maybe 20% positions that grew as another way to get those up there, and so that can happen as well. Those are the two ways that I would have large positions.
Joel Greenblatt (00:35:03):
I don’t really look at what percentage of the portfolio before I get to 30% or 40%. I’m looking at how much I think I’m risking for that. I mean, one of our best investments ever that actually instigated the formation of the Value Investors Club, which I started with my partner, John Petry in 1999, what the instigation was, we had found an investment that it was one of the best investments we had ever seen. It was a small business that we could buy at half its cash value. It was a very complicated capital structure, so this wasn’t very clear. But if you actually unwound it all, you were buying the business half its cash value, plus a very good business attached.
Joel Greenblatt (00:35:39):
At $24 in net cash, and you can pay 12, and it had a good business attached in addition to the $24 in cash. So, we backed up the truck and put 40% in. John Petry, my partner, found on a Yahoo message board back in the late ’90s, someone who had nailed it in exactly all its complicated glory, that position, and we thought we were the only guys on Wall Street to have figure this out. The light bulb went off in my head, and I said, “Hey, there’s intelligent life out there. Maybe we could find a lot of these people.” That was really part of the instigation for the Value Investors Club, to sort of find people that were a little bit off the beaten path to share ideas with each other.
Joel Greenblatt (00:36:13):
That turned into the Value Investors Club, but it came from that idea, where I was looking down and saying, I don’t see how I’m losing money in this thing. I think it was found because it was a very complicated capital structure and people didn’t realize it, and I didn’t think we were taking very much risk what it could be worth. Maybe it wasn’t going to be worth 10X, but I thought it was going to be worth two or three X easily, and that was our largest position folio.
Trey Lockerbie (00:36:37):
Joel, what is the Value Investors Club and what has been the most rewarding experience for you from having started this?
Joel Greenblatt (00:36:46):
Oh, there’s been a lot. It’s been very fascinating. I really recommend it to people as a learning exercise. What the Value Investors Club for those who don’t know is, it’s harder to get into than Harvard on a percentage basis. People put in their applications with an investment idea, and there’s a group of us, I’m not in that group anymore. That’s moved on, but John still is, and goes through these applications to join the club. If you have a really good idea, it started off, like I was teaching at Columbia, and there were maybe two or three kids who would’ve gotten A plus in my class every year.
Joel Greenblatt (00:37:15):
If you could write an investment pitch that would’ve gotten A plus in my class, then we would let you into this club, and your obligation would be to share your ideas to, at least twice a year, with the other members of the club. You got to give as good as you take. It was meant really for amateurs. It turned into about half professionals, half amateurs, but it was merit-based. The group of people writing on that site are very high-end because it was very hard to get it.
Joel Greenblatt (00:37:40):
Then you have a lot of smart people beating up on the other people who put a write up. Then there’s a question and answer portion that comes, a message board, where you go back and forth on that idea and you just see it develop, like, what were you thinking here? What were you doing there? This doesn’t make sense because of this. I always recommend the value investors club. We have a delayed portion of it so you can just look at many ideas over a period of decades of ideas on how great investors, or many great investors think, and how they evaluate an idea. Like I said, I have five kids and a number of them, I’ve used the Value Investors Club as a teaching. The most rewarding thing is I’ve been able to teach my own kids with something that we created.
Joel Greenblatt (00:38:17):
That’s been great. We also met, it’s sort of turned in originally to a little bit like American idol for hedge fund managers, if I’m dating myself, but it was just new talent that you never would have guessed. I got to meet some really nice people at the beginning. We don’t do this anymore, but I got to meet some of the investors and become good friends with a number of them. Just when you have a shared interests like this, that’s pretty cool. Those are the two things, got to meet some great people I wouldn’t have been able to meet, also got to teach my own kids using this tool, which I think is available to everybody, and I’d say the number one way to learn.
Trey Lockerbie (00:38:52):
At one point, you put some capital to Michael Barry’s fund. I’m curious, did you find him through the Value Investors Club?
Joel Greenblatt (00:38:58):
No. He had his own website there. He was writing up stock ideas and I found it just because I’m a value investor, and I think it was called Value Investing something or other. I read two of his ideas and I just said, this guy’s brilliant.
Trey Lockerbie (00:39:11):
If you’ve read Joel Greenblatt, especially The Little Book That Beats the Market, you might walk away thinking that Joel Greenblatt is this quant investor, or this very systematic investor, and I do know that you focus a lot on the micro. I’m really curious to know if the macro environment ever really weighs into your investment decisions.
Joel Greenblatt (00:39:30):
We spent our time ranking mostly in the US, although we do it internationally as well, ranking companies from one to, let’s say 2,500 based on their cheapness, their discount to our assessment of value. Of course, most of the companies are affected the same, or very similarly valuation-wise for those low interest rates. So, it’s a really have a ranking system. If you’re telling me, hey, find the best stocks you can find, and your job is to find the cheapest stocks you can find in the US. If that’s my job, I’m not going up and down. I’m 60% long, I’m 50% long, I’m 100% long. I’m buying the cheapest things I can find at that time.
Joel Greenblatt (00:40:03):
Across the 2,500 largest companies, those interest rates and those macro things are affecting most of them somewhat similarly. The other answer to your question is I generally don’t know. I have times where I’m more cautious. That might go more to asset allocation than it would be to comparing one stock to the other and the cashflows that I’m expecting from that stock over time and my certainty of those. I don’t bother too much with macro. I think Buffet answered this question many years ago saying, if you told me what the fed is going to do, I don’t know. If I changed anything, I wouldn’t know what to do. The markets and the economy are complex adaptive systems. If you know one or two inputs, you can get yourself in real trouble, because there’s so many repercussions and so many moving pieces, that to think you know something is kind of dangerous.
Joel Greenblatt (00:40:53):
There’s a saying attributed to Mark Twain, it wasn’t Mark Twain, but I’ll attribute it to Mark Twain, which said, it ain’t what you don’t know that hurts you, it’s what you think you know. I think that’s what people, when they do macro predictions, it’s such a complex adaptive system. I mean, I would just even use last year, if I told you there was a pandemic, and we’re still not back to work, and I said, guess which way the market’s going in 2020. Most people, I’m guessing, would have gotten it wrong, and I’d say almost everyone. That’s a big thing to know. I would say that’s a big, big thing to know, and everyone would have gotten it wrong.
Joel Greenblatt (00:41:26):
Just a cautionary tale to making your decisions based on macro. I find it very easy that if I find a business that’s gushing cash that I can beat my 6% risk-free rate that’s going to grow over time, that’s got a good franchise, and all those great things you look for in a business, I feel more comfortable doing that. That’s within my circle of competence. The macro environment, over time, it’s not going to affect that, that much. Even if you want to talk about inflation, well, a business with pricing power usually is the best place to shield yourself against inflation. If that’s one of your worries, I would say, where would I hide from a inflation or environment? Would be a business that has pricing power.
Trey Lockerbie (00:42:04):
You’ve touched on the circle of competence idea a couple of times, but it sounds like, from what I’m hearing, you’re defining it a little bit differently than I’m familiar with. You’re defining it almost like your overall strategy and your comfortability with the strategy that you’ve developed. Whereas a lot of people might take circle of competence to mean more like a certain industry that you have to be an expert in. Like I might be an expert in airlines, and so therefore, I only invest in airlines. Maybe talk to us about how you define your circle of competence.
Joel Greenblatt (00:42:32):
I’m not smart enough on airlines, but some people are, and that would be a great strategy. I mean, knowing an industry deep and well would be a big advantage. I think that’s an excellent way to go about investing. Although, one of the analogies I gave in one of the books was sort of knowing a little area, let’s say you live in Cleveland, knowing the nicest house in Cleveland may not be so nice relative to Beverly Hills. If you only know Cleveland, you may think you’re getting a decent bargain, but relative to what’s out there, maybe you’re not seeing the whole picture.
Joel Greenblatt (00:43:01):
That would be a risk in only knowing one little industry, but there’s a big advantage in having an edge. So, I’m for having an edge. I think, if I have an edge at all, is not on the micro level. I’ve met too many people who are better analysts, individual company analysts. I think I’m really looking from 40,000 feet usually and taking a step back, and contextualizing things, and sticking to things I find simple. I’m trying to simplify things. If I can simplify things, I won’t do it. It doesn’t mean I’m so good at it. It means I know my circle of competence.
Joel Greenblatt (00:43:35):
If I can’t understand that in a simple way, and there’s not 9 million moving pieces, but it’s super simple, and I can understand it, I feel really good about that. Knowing where that is, is my edge, and being disciplined to bet, to take my investments when I feel that I’m there. Of course, experience is helpful. Having a lot of years of experience, knowing, hey, this looks like that thing I saw 15 years ago, and now I can contextualize it across all the other opportunities I’ve seen. How does this risk reward set up? What is my certainty level here relative to other things? I think that’s where I’m good. I’m a good portfolio manager looking out 40,000 feet.
Joel Greenblatt (00:44:11):
Where should I size my positions? You could do great. I think some of the best analysts I know, size their positions wrong. If you’re really great at something and you take a 1% position, you weren’t right. You blew it. You should have a 10 or 20% position if you really have high certainty. If you are right, but only took a 1% position, and you should have taken a 10 or 20, you didn’t get it right. You blew it. I think that’s being able to size things. The other encouraging thing I tell my students is that, and I laugh with my partner, Rob Goldstein all the time is that, if we worked for somebody else, we would have been fired many, many times.
Joel Greenblatt (00:44:46):
We’ve made so many mistakes over the years, and big mistakes. What I tell my students is, you can still be successful over time making lots of mistakes, and that should be encouraging to you because you will make mistakes. You don’t want to die from any of them. Portfolio sizing does matter. Knowing when to hit the gas pedal does matter and some luck doesn’t matter. There’s no way getting around it. I mean, if you asked Malcolm Gladwell, I got out to Wall Street in 1981, market hadn’t gone up in 13 years, that big bull market since pretty much ’82.
Joel Greenblatt (00:45:18):
That was pretty good timing. I’d have to sort of gotten out of the way in a really bad way not to have been successful during that time, and so I don’t want to overstate success I’ve had, or some of my cohorts that were lucky enough to be born in the right country in the right year and the right time and go to Wall Street at the right time. I will say that the market hadn’t gone up in 13 years and not many people I knew were going to Wall Street on the investment side. So, I think that was lucky, and the fact that I got smitten, and so once again, I have to thank Ben Graham for writing about it and just hooking me while I was still in college.
Trey Lockerbie (00:45:52):
Joel, you have an amazing new book out called Common Sense: The Investors Guide to Equality, Opportunity and Growth. I got to tell you, this has actually become now the most gifted book to my friends and family. What’s so fascinating about it is it’s not really an investing book, it’s more about tackling some of these major issues that are plaguing our country I know, and probably others, mainly around education and financial literacy, income inequality, etc. Talk to us a little bit about what led you to write this book.
Joel Greenblatt (00:46:24):
Thanks for the question. I was really excited to write Common Sense. I knew it wouldn’t be an investment bestseller, but it really is an investor’s view of how we can solve some of our biggest problems, and of course, I think capitalism is the best system there is. It really can bring prosperity, the most prosperity to the most people of anything out there. I shouldn’t even have to say that, I believe. It should be settled at this point, but it isn’t. I think that’s because a lot of things could be a lot better.
Joel Greenblatt (00:46:53):
What I did is try to take my investment eye, and look at some of our biggest problems and say, how would investor go about approaching these problems? How would you go about looking at them? There were a list of topics that I covered, and of course, as an investor, I’ve been very personally involved in education with the idea, teach a man to fish is the best way to help people, help them help themselves. Of course, that is, I think, our biggest flaw in this country, that our education system is very unequal. You were assigned to your school based on your neighborhood, and if there’s a bad school in your neighborhood and you have any resources at all, you just move to a neighborhood that has a better school, or you send your kid to private school, and you have these options.
Joel Greenblatt (00:47:37):
The only people that don’t have an option are the people who don’t have resources, okay? Or the parents are struggling in some way. If you’re a savvy parent, even you can … Most schools have online, you can check out how good a school is, and you can, if you have a savvy parent, if you’re lucky enough to have a savvy parent who knows how the system works, they can move to a neighborhood that they can afford, even if it’s a low-income neighborhood with the best, best schools that they can afford. That’s there. But if you don’t have that luck, if you don’t have any money and you don’t have … And your parents aren’t savvy, or they’re immigrants, or just for whatever reason, they don’t have a good education because they got cheated by the current system, you end up in the worst schools with no choice.
Joel Greenblatt (00:48:19):
I got involved in the charter school movement. I was a co-founder of Success Academy that now 3000 students, and we have 47 schools. Those kids are, a vast majority, minority kids, vast majority, low income. Those kids, as a group, those 20,000 kids, outperformed the … They would be the number one district in New York state beating the wealthiest districts. The point there was not anything other than to show that it’s not the kid’s fault, that with the right resources and the right background, right supports, every kid, almost every kid can perform at high levels.
Joel Greenblatt (00:48:56):
The English language learners and the kids with disabilities outperform, at Success, outperform the kids at the regular public school, even in the wealthiest districts. If you just look at the kids who are currently homeless, they outperform the wealthiest districts. With the right supports, all the kids can do it. So, it’s a big failure of our system, that we’re not doing it. I think charters are under attack right now. I don’t think they’ll be able to expand as much as I think would be helpful, but in the book, I talk about, and I won’t bore you too much with it, but bottom line is I talked about around the system.
Joel Greenblatt (00:49:34):
How, as an investor, would you go about creating something that was more fair? I said that places like Microsoft, Google, Amazon, JP Morgan could actually help solve this problem. All they would have to do is set standards. What tests, what courses, what certificates could you get, in lieu of a college degree, that we would accept for a high paying job? And just tell, nothing to do with schooling, just what courses, tests, or certificates could you go get, and we would put you in the running for a high paying job.
Joel Greenblatt (00:50:07):
The reason for that is, if you are poor or a minority in one of our major cities, top 50 major cities, your chances of graduating college are one out of 11, and we know college graduates aren’t 70% more than high school graduates. High school graduates are 30% more than college dropouts. So, one out of 11 are doing it now. So, what do you do for the 10 out of 11 where the current system is failing them, if you’re a poor minority? I’m saying, if we run around the system, and all we need is these companies to set standards.
Joel Greenblatt (00:50:38):
We don’t need them to write tests, we don’t need to give tests, or to make courses or anything like that. We just say, which of these things outside the current system, could you pass? Or course certificates could you get or courses that you could take? I talk about how this works. I talked a lot about Clay Christensen, how he set up. He says, how disruption happens. I talk about how this happens, and all you need is a buyer. You need a buyer to say, I’ll buy it if you pass this course or test. Then all of the supportive services for people to pass these things will spring up as a result of having a buyer at the end.
Joel Greenblatt (00:51:13):
I go through a lot of pages. I don’t want to bore you with it, but it’s incredible. Once you know the kids can do it with the right support, I think this works. I called it alternative certification. I hope you read Common Sense and read about that particular part. I also talked about an earned income tax credit. I talked about skilled immigration. I talked about banking reform. I talked about retirement savings. All those topics I try to cover from the viewpoint of an investor. How would you look at that? How would you go about solving these problems? For retirement savings, you’re in the bottom, nine out of 10 people in the bottom quintile don’t have any.
Joel Greenblatt (00:51:49):
Social security, if you make $10 or $12 an hour is $9,000 a year. If you have no savings, you’re kind of screwed. There’s easy ways. I talk about what Australia does. I talk about how we can do something that rhymes with that pretty quickly, and I talk about the benefits of compound interest that probably everyone listening to your program understands, that the sooner you start, the better, and we’re not starting at all. It’s very, very, very straightforward. I think people will like that part.
Trey Lockerbie (00:52:15):
Well, that part, in particular, really stood out to me because you provide an amazing example of Australia and this superannuation that they’re doing over there, where they’re essentially forcing people, more or less, to invest from their paychecks, but it’s to their benefit.
Joel Greenblatt (00:52:31):
Right. Well, what I would suggest besides doing it on your own, right now, I forgot what the cutoff is, but it’s probably about $147,000 for, $143,000, I don’t know, for stop paying social security taxes, because you don’t get any benefit from doing it. What you put in originally for social security was going to be related to what you get out. So, if they tax to beyond that, you wouldn’t get anything out of it. But I suggested, one way to do this is to continue to tax people beyond this, but it would go into your own savings account. But a portion of that, maybe 15% or 20% would go to people who don’t make that kind of money.
Joel Greenblatt (00:53:04):
Go to people who are in their early 20s, who aren’t making a lot of money because they’re in their early 20s and they don’t have high salaries, and it’s for savings. In other words, we just give it to them. That compounds at huge rates if you start very early. Low income, give them money to go into accounts. They can supplement it. We can help them supplement it in the way we already do with 401ks and IRAs and everything else. But here’s money you get. It’s done automatically similar to the way they do it in Australia.
Joel Greenblatt (00:53:31):
That’s a way that we can help everyone. I don’t think those people who either want to put more money into their 401k, where you can do that, but part of that money has to go to help people who have less, or we do it mandatory through social security, where you get to keep most of it. So, it’s not really raising your taxes, but that tax benefits you’re getting by investing in a tax, tax benefited account, part of those savings will go back to those who needed even more. Through both those methodologies, looking at the results that we’ve seen in Australia through super, something called superannuation. It’s a big, long, complicated name, but I explained in the book.
Joel Greenblatt (00:54:07):
It’s basically forced savings at an early age, and everyone gets the benefit of compounding. That’s really what you’re trying to do, and there’s no other answer. You need to start early. You need to get the benefit of compounding, and everyone can do it. That’s one of the things that everyone can do. It’s a crazy, crazy thing. If few look at the compound interest tables and you don’t understand them, and this is an investing program, so a lot of your listeners are aware of it, but I will still telling everyone, go take a look at a compound interest table. It’s crazy.
Joel Greenblatt (00:54:38):
One of the examples I give in the book is that, if you started saving at age 19 and you put in a couple of thousand dollars every year from 19 to 26 for seven years, and then never put in another nickel, and you invest your money at 10%, or you start at age 26, put in 2,000 a year for 40 years, the person who started age 19 and only put in seven payments and never put in another nickel ends up earning more money than the person who starts at age 26 and puts in 40 payments. That’s how powerful compounding is and how powerful starting early is.
Joel Greenblatt (00:55:11):
Once people realize that, I hope they don’t feel bad about spending money, but it’s a good idea to save, and of course those, when you’re getting started, you don’t have a lot of money. You don’t have a lot of money to save. In the book, I talk about how we can do that for people.
Trey Lockerbie (00:55:25):
Now, have you seen any second or third order effects with the superannuation in Australia? Is there rampant inflation or wage inflation just because they’re offsetting for the net balance that they need to take home asset inflation or anything else?
Joel Greenblatt (00:55:40):
Bottom line is they have like a catchall there, because obviously they didn’t start superannuation until the ’90s. So, people who just started then really haven’t been saving their whole lives and therefore don’t have enough. So, they have a supplemental program that makes up for that. In my proposal, I said that, if you didn’t save enough here, I mean, we weren’t going to give you less than social security, meaning this would be a supplement to social security. The worst you could do is your current benefits social security. But if you saved anything, you’d be doing better than that. Australia as a supplemental program, that takes care of those problems. Because once again, even though they started 25 years ago, that’s still not a long time ago, regardless, so they have a supplemental program.
Joel Greenblatt (00:56:22):
That’s what we would have to do, have a supplemental program with this. Once you have a supplemental program, you can answer all the questions that arise, as long as you know there’s a minimum that you will be protected for.
Trey Lockerbie (00:56:34):
There’s another idea going around right now. I think it even has the name of birth dividend, where people are advocating for more or less people to have money put into indexes when they’re born so that the money can compound for them over time. What are your thoughts on this side?
Joel Greenblatt (00:56:48):
I think that makes a lot of sense. I was trying to fund it. Obviously there’s a lot of good uses for money, and at some point it gets ridiculous. But I do think, if the government, now that the government can borrow for free, if you can borrow at one and a half percent for 30 years, and they probably should issue 50 or a hundred year bonds, the US government. If you could use that and use the government’s borrowing power at very low rates to go then invest at 8% or 10% starting from birth, that could solve a lot of problems using the government’s balance sheet.
Joel Greenblatt (00:57:20):
There’s a lot of fancy tricks you could play there. But I tried to make a distinction in the book between government spending and government investing. There are certain things that have a clear payoff, and there are certain things that are spending right now, and there’s a difference between the two. So, it was an investing book, I would say. So, there’s some government investing, and one place of investing was education. One place of investing is earned income tax credit, where you take kids out of childhood poverty, because that costs us a trillion dollars a year already.
Joel Greenblatt (00:57:53):
If we could spend less than a trillion dollars and take everyone out of childhood poverty, we’re making money, and that’s the distinction I try to make. I think a program like that, where you give people retirement savings, because they will have enough if you start them off early enough and use the power of compound interest and you have 65 years or more to compound, I love those kinds of programs. I mean, they have to be done within reason, but I don’t even think that … I just think, as an investor, if you can borrow one and a half percent and invest at higher, that makes sense.
Trey Lockerbie (00:58:26):
Joel, I have really enjoyed this discussion, and I want to give you an opportunity to hand off to our audience where they can learn more about you, your funds, your books, your philanthropic endeavors, where can we follow along?
Joel Greenblatt (00:58:40):
Well, you can buy my books on Amazon, so good luck with that. I run a firm called Gotham Asset Management. Otherwise, I really wrote Common Sense, the latest book, really from the heart, actually trying to come up with solutions that made sense. I was hoping it would be more influential than a typical investment bestseller. If you do read it, have anyone that can be influential that you can get to read it, I’d appreciate that help. That’s really where I’d go there. Of course, if you can support good education in whatever form is meaningful to you, I think that’s the most leveraged way, that if you’re lucky enough in the investment world to have been successful, to give back. Anything you can find in that area, I think, would be a very important contribution.
Trey Lockerbie (00:59:30):
Joel, I want to thank you personally for coming on the show and also for writing these amazing books, especially your latest book, Common Sense. I find your approach to finding solutions over debating other topics very refreshing, and really useful in today’s environment. So, thank you for that. I really enjoyed the discussion. I hope we can do it again soon.
Joel Greenblatt (00:59:50):
Love to, Trey. Pleasure to be here.
Trey Lockerbie (00:59:52):
All right, everybody. That’s all we had for you this week. If you’re loving the show, please go ahead and hit the subscribe button in your app so that you get these podcasts episodes automatically every week, either the Wednesday Bitcoin Show, or the Sunday We study Billionaire Show. With that, we’ll see you again next week.
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