Customer Quote by Joel Greenblatt
““When thinking about risk, rather than making things unnecessarily complicated, there are really two main things you should want to know about an investment strategy: 1. What is the risk of losing money following that strategy over the long term? 2. What is the risk that your chosen strategy will perform worse than alternative strategies over the long term?””
About This Quote
Source Speech: Investor Presentation, Joel Greenblatt, 2019
Assessing an investment strategy requires focusing on two core risks: long‑term loss probability and relative underperformance versus alternatives.
In simple terms: Know both absolute loss risk and comparative performance risk.
Key Takeaway
Evaluate both loss and relative risk.
Themes
investment
risk assessment
strategy evaluation
Mood
analytical
cautious
Type
financial
educational
When to use this quote
- portfolio planning
- retirement saving
- fund selection
- risk management
Key Concepts
probability
long‑term performance
benchmarking
Questions to Reflect On
- How do you measure long‑term loss risk?
- What benchmarks best capture relative performance?
A Different Perspective
Only considering one risk may miss the other critical dimension.
![“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)
