Estimates Quote by Joel Greenblatt
“If I plug my estimates into the Magic Formula, and it comes out cheap, that's good.”
About This Quote
Source Book: “The Little Book That Still Beats the Market” (implied)
Using a valuation formula, cheap stocks are identified as good investments.
In simple terms: Cheap stocks are good buys.
Key Takeaway
Invest in undervalued stocks.
Themes
finance
valuation
investment
strategy
Mood
pragmatic
cautious
Type
financial
educational
When to use this quote
- stock selection
- portfolio building
- financial planning
Key Concepts
value investing
quantitative analysis
market efficiency
Questions to Reflect On
- How do you verify cheapness?
- What risks exist in formulaic investing?
A Different Perspective
Market may misprice for reasons.
![“There's a clarity that comes with great ideas: You can [easily and simply] explain why something's a great business, how and why it's cheap, why it's cheap for temporary reasons and how, on a normal basis, it should be trading at a much higher level. You're never sitting there on the 40th page of…” quote by Joel Greenblatt](https://sms4smile.com/quotes/img-quotes/ffb/joel-greenblatt-21588_agonizing_there-s-a-clarity-that-comes-with-great_467148.jpg)
