Joel Greenblatt's Best Investing Strategy

Many famous traders have become rich solely through their own abilities, without having a background in finance or economics.

But this doesn't mean education hinders success; rather, it helps them find the right investment decisions.

It's good economists who achieve investment success by using approaches that are different from speculative ones and yet carry less risk.

A prime example of how a good education helps in one's work is Joel Greenblatt, who graduated from the University of Pennsylvania School of Business in 1980. He was 23 at the time.

Just five years later, he founded his hedge fund, Gotham Capital, with $7 billion in capital.

A distinctive feature of this fund was its profitability; thanks to Joel's strategy, the company was able to operate for 9 years with an average annual return of 50% per annum.

What is the secret of Joel Greenblatt's strategy?

As he himself states, he managed to develop the "Magic Value Investing" the main components of which are:

• Buy inexpensive shares of promising companies that show profit.

• The market value of the purchased companies should exceed 50 million dollars.

• When investing, choose only low-risk objects.

• Investment diversification should not be excessive.

• Use special situations for purchasing - acquisitions, mergers, restructuring.

• Always consider what level of profit the stock has in relation to the invested capital.

Try to turn off emotions when choosing a security and focus only on numbers and industry forecasts, only this approach will allow you to achieve outstanding results.

In order to study the strategy in more detail, read the book by Joel Greenblatt "The Little Book of the Stock Market Winner" - http://time-forex.com/knigi/malenkaya-kniga