Who is Joel Greenblatt?
Joel Greenblatt is an associate professor at the Columbia University Graduate School of Business. He is an American fund manager and inventor of Magic Formula Investing, an investment strategy he presents in his book “The Stock Market Magic Formula. How to beat the market with ease”.
The life of Joel Greenblatt
Greenblatt was born on December 13, 1957 in Great Neck, Long Island (NY) into a Jewish family. After his childhood, Greenblatt studied at the Wharton School of the University of Pennsylvania and graduated with an MBA in 1985. In the same year, thanks to the support of Michael Milken, he founded his own investment fund, Gotham Capital, with a starting capital of 7 million dollars.
Greenblatt’s success and skill were such that between 1988 and 1994 he gave his investors annual returns of up to 50% before tax, or in other words, 30% after tax and fees.
In 2000, Greenblatt’s fund, Michael Burry, helped set up the Scion Fund by providing him with 1 million dollars. Over the years, Gotham Capital entrusted Burry with around 100 million dollars. Although the relationship was productive, it hit a rough patch in 2006 when disagreements over Burry’s bet against the mortgage market led Greenblatt – like other investors – to try to withdraw his capital, which Burry prevented. In the end, Burry was right and Greenblatt had the advantage. However, when the real estate crisis broke out and with it the financial crisis of 2008, Greenblatt decided to withdraw his capital from Scion.
In 2008, Greenblatt founded a new company, Gotham Asset Management LLC. With this new company, he had set up four funds by 2010, raising more than 360 million dollars to manage. Due to Greenblatt’s fame and prestige, he managed more than 5 billion dollars by the end of 2019.
In addition to running his investment firm, Greenblatt has been a professor at Columbia University’s Graduate School of Business since 1996. He has also founded an exclusive club: “The Value Investors Club”, to which only 250 value investors are admitted in order to give each other useful advice and share their market assessments.
Thanks to these activities, he recognized the importance of financial education and wrote four books in this context, including the famous book: “The Little book that beats Market”. There he explains his magic formula for beating the market.
Joel Greenblatt today
Joel Greenblatt is still active in the stock market and teaches at Columbia University, as well as continuing to run his exclusive club. Like other major investors, he also devotes time and money to philanthropy, especially to improve the education of marginalized groups such as African-Americans and Latinos in New York. Undoubtedly, it is not only necessary to know his views on the market, but also to take into account the advice he gives in his numerous books.