One of the best investors around, Joel Greenblatt, has…
“One of the best investors around, Joel Greenblatt, has written a popular, charming and funny book about investing in great companies at low P/E multiples. To simplify an already simple book, great companies are generally measured as companies that can generate lots of profit without requiring a lot of capital. This means that they have high ROEs.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Investing in companies with high returns on equity and low price‑to‑earnings yields strong long‑term performance.
In simple terms: Buy high‑ROE, low‑P/E firms.
Key Takeaway
Seek quality at a discount.
Themes
value investing
financial analysis
quality
ROE
valuation
Mood
analytical
optimistic
Type
educational
inspirational
When to use this quote
- portfolio construction
- stock selection
- financial education
- investment research
Key Concepts
economic moat
capital efficiency
earnings power
Questions to Reflect On
- How do you assess a company's sustainable competitive advantage?
- What risks arise from focusing solely on ROE?
A Different Perspective
High ROE alone may ignore growth prospects or market risk.