2010
Framework
by
Joel Greenblatt
Framework-based value investing book that explains how to earn above-average returns by evaluating publicly traded companies. Joel Greenblatt’s strategy centers on understanding two things: how cheap a stock is at a given time, which is measured by calculating its earnings yield, and how efficient a company is at generating cash, which is measured by calculating return on capital. Written in plain language, it’s accessible to any beginner investor.
October 2023
Unexpected nugget – Greenblatt uses the higher of 6% or the 10-year Treasury yield as his discount rate. He never goes below 6%. His Magic Formula, which ranks companies by return on capital and earnings yield, was insightful. The appendix includes solid detail on how each metric is calculated. This is the second edition (first published in 2005) and incorporates post-financial crisis updates through 2009.
June 2023
