Something out of the ordinary course of business is taking place that creates an investment opportunity. The list of corporate events that can result in big profits for you runs the gamutโspinoffs, mergers, restructurings, rights offerings, bankruptcies, liquidations, asset sales, distributions.
Joel GreenblattMy goal is to buy a company at a low multiple to normal earnings power several years out and that the company earns good returns on capital at that level of normal earnings. A holding period of more than one year also works quite well as the factors are persistent in years 2 and 3.
Joel GreenblattValue investing strategies have worked for years and everyone's known about them. They continue to work because it's hard for people to do, for two main reasons. First, the companies that show up on the screens can be scary and not doing so well, so people find them difficult to buy. Second, there can be one-, two- or three-year periods when a strategy like this doesn't work. Most people aren't capable of sticking it out through that.
Joel GreenblattIf you spend your energies looking for and analysing situations not closely followed by other informed investors, your chance of finding bargains greatly increases.
Joel GreenblattWe are busy surviving, herding, fixating on what just happened, and being overconfident!
Joel Greenblatt