Joel Greenblatt speaks about value investing with Howard Marks. Both are successful investors who have achieved success at the highest level and are alumni of the Wharton School of business, which is part of the University of Pennsylvania.
Greenblatt ran an incredibly successful fund, Gotham Capital that produced a 40% return from 1985 to 2006. He speaks about being inspired by Benjamin Graham’s book Security Analysis and expands on his approach to investing.
Howard Marks is the founder of Oaktree Capital Management, which manages over $100 billion in assets. Marks used the principles of value investing by buying assets that were distressed and undervalued and then timed the appreciation of those investments to maximise profitability.
The billionaire Warren Buffett used a similar strategy in his early investing philosophy, which he used the metaphor of a ‘cigar butt’ that equated to a company that was undervalued but not necessarily a good company to invest in. Buffet due partly to the influence of his partner Charlie Munger would evolve his investment philosophy to discard cigar butts.
‘It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.’ – Warren Buffett
Greenblatt and Marks have both evolved their investment philosophies over the years and share their experiences.
On Value Investing: A Conversation with Joel Greenblatt W’79 WG’80
Investor: Joel Greenblatt
Investor: Howard Marks