Saturday, September 22, 2007

Success Videos - Joel Greenblatt and Trusting the Data

In my previous post, Part 1 of my review of Tedlow's book on Andy Grove, I discussed my interpretation of a few of Grove's success principles:

1. Get the data.
2. Come to terms with the data as quickly as possible and…
3. Act fearlessly on the data that you find.

This video clip, featuring master investor Joel Greenblatt, actually embodies these principles, and contains a cautionary note about abandoning them. Greenblatt, author of The Little Book that Beats the Market , has one of the best investing records pf the past 20 years. One of his methods, described in his book, and in this video, involves a formula that he tested and verified.

In his talk, he mentions some similar testing work done by another fund manager, who prematurely sold his interest in the fund when the real-world results didn't work out like the testing, only to see the fund post magnificent returns shortly after he sold it.

I believe I know what fund Greenblatt is talking about, since I read the book written by the "mystery fund manager". I also have been an investor in that mutual fund, and have indeed reaped stellar returns. Why? Because I trusted the data...perhaps even more then the researcher himself.

Anyway, this video of Greenblatt is yet another huge benefit of living in the times we do. As little as 10 years ago, material of this kind, a one-hour conversation with a leading genius in his field, would have been unavailable. Only broad-band type videos, aired on network TV , would have been available. And only if you'd happened to be watching. And only if your interests matched those of 100 million average Americans.

We are truly blessed to be able to press a button and get such specialized , and immensely valuable information.


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