Joel Greenblatt's Greatness Indicator | Return on Capital Ratio for Magic Formula Investing

Joel Greenblatt Return on Capital Ratio // Magic Formula Investing // Great businesses at cheap prices are the holy grail for investors. One of the best metrics to identify great businesses is Return on Capital. Since there many ways that return on invested capital is calculated, I walk through Joel Greenblatt's specific method of return on tangible capital employed using AAPL as an example.

What variation of Return on Capital do you use most often?

[BradKaellner]

Do you use ROC as part of your investment analysis?

[joseandresbaquerocordova]

Finally I find a person that show me exactly how to calculate this formula. Like and follow, you are a genius

[User]

THANKS YOU A LOTT. Finally someone showed me how to do it right.

[nikunj]

Thank you Brad for sharing the details of ROC. It will be really helpful to me as i am trying to mimic the magic formula investing in NON US market. I will really be waiting for your another video on how to calculate Earnings Yield as per the book. Thank you very much and appreciate the good work that you are doing!👍🏼

Just want to tell you that i got introduced to Magic formula investing through your another video and i have started my own portfolio using the magic formula in US market last week.

[saschadiederichs]

HEY I Like the Joel Greenblatt Videos YOU make the most. Do YOU also trade spinn off or Others Special Situations?

[HaIsKuL]

When I'm shopping, I usually rank it from the best to the worst item then look at the price if I can afford it and how much of a bargain it is.

Consequently, is there a way to rank order based on ROC and THEN rank it based on the P/E ratio? This means I'm prioritizing ROC over P/E instead of looking at a rating system that combines both of them.

[ecineko]

Hi Brad, how about all the money that company collects when people buy stocks, where is that accounted for. Clearly that is also the capital that company then invests.

[zaeem]

What do you do with acquisitive companies where there is large goodwill on the balance sheet?