Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.
Joel GreenblattLook down, not up, when making your initial investment decision. If you donโt lose money, most of the remaining alternatives are good ones.
Joel GreenblattThere's a clarity that comes with great ideas: You can [easily and simply] explain why something's a great business, how and why it's cheap, why it's cheap for temporary reasons and how, on a normal basis, it should be trading at a much higher level. You're never sitting there on the 40th page of your spreadsheet, as Buffett would say, agonizing over whether you should buy or not.
Joel GreenblattIt just seems logical that sticking to investing in only a small number of companies that you understand well, rather than moving down the list to your thirtieth or fiftieth favorite pick, would create a much greater potential to earn above-average investment returns.
Joel GreenblattI think the exercise of trying to figure out how to simplify concepts has been incredibly helpful to me over the last 13 years of teaching and I hope my students have benefited from it.
Joel GreenblattThereโs a virtuous cycle when people have to defend challenges to their ideas. Any gaps in thinking or analysis become clear pretty quickly when smart people ask good, logical questions. You canโt be a good value investor without being an independent thinker โ youโre seeing valuations that the market is not appreciating. But itโs critical that you understand why the market isnโt seeing the value you do. The back and forth that goes on in the investment process helps you get at that.
Joel Greenblatt