Master of Value: The Legacy and Wisdom of Joel Greenblatt
Biography of Joel Greenblatt
Early Life and Education
Joel Greenblatt was born on December 13, 1957, in Great
Neck, New York. He graduated summa cum laude from The Wharton School at the
University of Pennsylvania in 1979 with a Bachelor of Science degree and earned
his MBA in 1980. Initially considering a career in law, he enrolled at Stanford
Law School but soon redirected his focus to finance, marking the beginning of
his impactful journey in the investment world.
Academic Contributions and Publications
Greenblatt's academic pursuits led him to become an adjunct
professor at Columbia Business School, where he taught "Value and Special
Situation Investing" for over two decades. His research and writings have
significantly influenced value investing strategies. In 1997, he published
"You Can Be a Stock Market Genius," exploring unconventional
investment strategies. His 2005 book, "The Little Book That Beats the
Market," introduced the "Magic Formula" investing strategy,
which gained widespread acclaim for its simplicity and effectiveness. The
strategy focuses on investing in companies with high earnings yield and high
return on invested capital. Greenblatt's subsequent works, including "The
Big Secret for the Small Investor" (2011) and "Common Sense: The
Investor’s Guide to Equality, Opportunity, and Growth" (2020), further
cemented his reputation as a thought leader in finance.
Master of Value: The Legacy and Wisdom of Joel Greenblatt/ Biography of Joel Greenblatt#American academic, hedge fund manager, investor, and writer
Gotham Capital and Gotham Asset Management
In 1985, Greenblatt founded Gotham Capital with an initial
investment of $7 million, primarily from Michael Milken. Between 1985 and 1994,
Gotham Capital achieved an annualized return of 50% before fees, specializing
in "special situations" like spinoffs and corporate restructurings.
In 1995, the firm returned all capital to outside investors and ceased
accepting new external investments. In 2008, Gotham Capital transitioned into
Gotham Asset Management, with Greenblatt and Robert Goldstein serving as Managing
Principals and Co-Chief Investment Officers. As of August 2025, Gotham Asset
Management manages approximately $16.7 billion in assets across 1,655 holdings,
with top positions in SPDR S&P 500 ETF (SPY), Tidal Trust I - Gotham
Enhanced 500 ETF (GSPY), NVIDIA Corporation (NVDA), and Apple Inc. (AAPL).
The Magic Formula Investing Strategy
Greenblatt's "Magic Formula" investing strategy,
outlined in his 2005 book, involves selecting stocks based on two criteria:
high earnings yield and high return on invested capital. This approach aims to
identify undervalued companies with strong profitability. While the strategy
has demonstrated long-term outperformance, it is associated with higher
short-term volatility due to its concentrated portfolio of 20–30 stocks. To
facilitate its application, Greenblatt launched MagicFormulaInvesting.com,
providing a free stock screening tool for investors.
The Value Investors Club
In 2000, Greenblatt co-founded the Value Investors Club with
John Petry, an exclusive online platform where approved investors share value
and special situation investment ideas. Membership is capped at 250
individuals, and the club awards $5,000 bimonthly to members who provide the
best investment advice. Academic research has demonstrated that recommendations
made by club members yield significant abnormal profits, highlighting the
quality of insights shared within the platform.
Philanthropy and Educational Initiatives
Beyond his financial endeavors, Greenblatt has made
significant philanthropic contributions. In 2002, he donated $2.5 million to
P.S. 65Q, a public elementary school in Queens, to support students from
predominantly South American and South Asian immigrant communities. In 2006, he
co-founded the Success Academy Charter Schools, aiming to provide quality
education to students in underserved communities. He has also served on the
boards of the Institute for Student Achievement and the Davidson School of the
Jewish Theological Seminary.
Legacy and Influence
Joel Greenblatt's innovative approaches to value investing, coupled with his commitment to education and philanthropy, have left an indelible mark on the financial world. His "Magic Formula" continues to be a cornerstone for investors seeking systematic strategies to achieve long-term success. Through his writings, teachings, and philanthropic efforts, Greenblatt has inspired countless individuals to approach investing with discipline, integrity, and a focus on value.
