Monday, November 17, 2008

Joel Greenblatt

It was sheer coincidence that I discovered Joel Greenblatt.
I read about his latest book 'THE LITTLE BOOK THAT BEATS THE MARKET' and immediately ordered on through landmark. What I got for 250 Rs is priceless insight.
Here is one hedge fund manager who explains about modern value investing just like a loving father would to a school going son or daughter.

I fell in love with his metrics of Return on capital and Earnings yield which are variations of Return on Equity and PE ratio.

Right now I am setting up my own screen for the BSE 500 using his magicformula for US stocks.

How i wish we had one for our BSEs and NSEs.

The screen I am setting up also factors in the Benjamin Graham forumla of stocks with the market cap being less than the liquidating value along with the parameters of magic forumla investing - high ROC and high EY. It's been a very interesting process so far. I hope to finish it by the next week or two.

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