Joel Greenblatt LOVES Gushing Cash Flows (And So Should YOU)

Here I breakdown the major parts of a Bloomberg Joel Greenblatt interview on the topic of cash flows and intrinsic valuation. Greenblatt explains the key metrics he uses to value businesses and how his firm, Gotham Capital, generated annualised returns of 40% over a 21 year period.

Joel Greenblatt is a very successful value investor with a long/short S&P 500 portfolio.

Check out the full interview below:

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Disclaimer:
The information in this video is general information only and should not be taken as constituting professional advice from Hamish Hodder.
Hamish Hodder is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.
Hamish Hodder is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this video.

[JakeKelly]

Hi Hammish. Could please consider revisit some of your earlier business valuations examples and apply ‘cash flow yield’ metric?

[scottscriticalmass]

Great topic and video Hamish... I highly recommend everyone read Greenblatt's books. In order... 'You Can Be a Stock Market Genius', 'The Little Book that Beats the Market' & 'The Big Secret for the Small Investor'. You will be a better investor following those reads IMO.

[vickingvicbubble]

I just subscribed to the Channel. It is great, for an investor like me, who lacks the formal training in business and accounting, it helps me get a good grasp of the basics that I need to fully understand Value Investing Strategies! This channel will be very successful! Trust me!

[danh]

Thanks Hamish! Love your content - always get so much value from your videos!

[alexgolding]

This is great, really appreciate you taking the time to unpackage this. Its just an opinion, but i think your opinion is very close to what greenblat is expressing.
Great content always!

[chrishellmuth]

very good Greenblatt video with perfect explanations by Hammish

[hman]

The little book that beats the market. His book that explains his quant style. There is an Aussie bloke that is very similar to Greenblatt called Toby Carlisle. Worth a look too.
Thanks for the video

[bloodphantom]

around the 2:00 mark, he said he values every company in the S&P 500, bottoms up. I’m not sure if that means he invests in every company in the index or if he’s following/watching every company in the index.

[SinghTan]

I watched almost 1k videos on investing, this one had the best explanation. Attention to detail great keep it up

[gregwmanning]

Already subbed so liked and commented as requested.
What metric would one use to compare cashflows and how/where is it found. Thanks for your efforts to make this video. Merry Christmas Hamish

[letsdanceonhere]

I would have missed a lot of information without your ongoing commentary. Thanks and I’m subbed!

[TheHistoryReader]

Hey Hamish nice video. You might be interested in the Big Un story. ASX company that figured out a new way of manipulating cash flows. They set up shop with an invoice factoring company, then sent false invoices to them and got paid for them, so the bank account said they had cash coming in. However, the invoice factoring company was in on it, and had a PPSR charge over the cash in the bank account, to be paid back through some convoluted dividend arrangement. Needless to say, they went bust when a journalist at the AFR figured it all out.

[marxenbrothers]

Thanks for bringing us this interview and commentary. Top content!

[jaroncorleone]

Thanks for the job. I apreciate so much your coments of the interview

[hugomeza]

How funny, I just order his book on Amazon and next thing I see is a YouTube notification of your most recent video on him.
Great video.👍

[gavinli]

Great video. Really loved breaking down some anecdotes.

[shubhamvartak]

Nice video....can you please make a video or explain about how to make your portfolio crash proof if market crashes...and how to outperform market during a crash

[AdventuresandUs]

I love the highlight on cash flow. If you don't have the cash to keep the lights on then how are you going to keep the company running in the future. :)

[renetamayo]

Que tal Hamish, excelente video como siempre! Y me quedé con una duda de la entrevista... Del método que estuvo hablando Greenblatt en el vídeo es de la famosa "magic formula"? Y quisiera saber que opinas tú de esa forma de inversión... Realmente crees que con altos ROIC y con bajos EV/EBIT en el S&P500 puedas generar rendimientos como los de él? Agradecería mucho tu respuesta. Saludos desde México!

[Zyleok]

Hey Hamish, I was using your stock analysis spreadsheet but I am not sure how to find the numbers to put into the 5 year P/E ratio slots, is there a video I can watch where you show how to do that?