A Detailed Look At Joel Greenblatt’s Magic Formula Method – A Model that Blends Value & Quality

Joel Greenblatt produced exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable 40 percent annualized return over more than two decades. In his 2005 bestseller The Little Book That Beats The Market, Greenblatt laid out a very simple two variable strategy that more than doubled the market return in his testing.

In this episode, we take a deep dive into the magic formula, how it works, and its pros and cons.

We hope you enjoy the discussion.

VALIDEA'S MAGIC FORMULA MODEL
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ABOUT THE PODCAST
Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

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