MI381: Joel Greenblatt: Behind the Magic Formula w/ Shawn O’Malley

This podcast episode analyzes video lectures by investor Joel Greenblatt, focusing on his investment strategies and case studies. The host details Greenblatt's approach to identifying undervalued companies, using examples like NVR (a homebuilder) and NII Holdings (a wireless company), highlighting the importance of understanding a company's business model and why the market undervalues it. Greenblatt's "magic formula," emphasizing cheap valuation and high returns on capital, is discussed, along with the concept of "cigar butt" investing (finding extremely cheap, dying companies). The episode concludes with Greenblatt's worst investment as a cautionary tale and encourages listeners to utilize the Value Investors Club forum as a resource. Listeners gain insights into identifying undervalued stocks and the importance of understanding market mispricing.