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Tag: Joel Greenblatt

The Permanent Portfolio And Joel Greenblatt’s Big Secret

The Permanent Portfolio And Joel Greenblatt’s Big Secret

I recently wrote an article for Gurufocus.com on an asset allocation strategy called the ‘Permanent Portfolio’ (PP). For readers who don’t know, or who haven’t heard about this portfolio approach before, it was first published in the 1970s by Harry Browne, a U.S. writer and politician (book). Browne’s goal was to create a simple portfolio that would be easy to manage and protect his wealth in all market environments. The approach is simple, Browne recommended investors separate their wealth into…

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Joel Greenblatt’s Original Magic Formula

Joel Greenblatt’s Original Magic Formula

Most investors are familiar with Joel Greenblatt’s Magic Formula, made famous in his book, “The Little Book That Beats the Market”. The key drivers of the Magic Formula we know today are Earnings Yield (EBIT / Enterprise Value) and Return on Capital (EBIT / (Net Fixed Assets + Working Capital)). Companies are ranked according to these two metrics — highest earnings yield and highest return on capital — then the 20 to 30 companies with the highest ranks are purchased…

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