The Greenblatt Thesis

The Greenblatt Thesis, developed by Joel Greenblatt, suggests that investors can achieve above-average returns by focusing on a specific strategy: buying undervalued stocks of companies with strong fundamentals (high return on capital) and low prices (low earnings multiples). This approach, often called "value investing," emphasizes disciplined selection of quality companies that are temporarily out of favor or undervalued by the market. Greenblatt's method aims to identify stocks that are likely to rebound and generate good returns over time, making investing more systematic and less reliant on speculation or market timing.