The Greenblattian approach

The Greenblattian approach refers to the investment strategy developed by Joel Greenblatt, encapsulated in his book "The Little Book That Beats the Market." It focuses on two key concepts: "return on capital" and "earnings yield." Greenblatt suggests identifying undervalued companies with high returns on their investments and a strong earnings yield, essentially the earnings generated compared to the company's price. By ranking stocks based on these criteria, investors can create a portfolio aimed at achieving superior returns. This method emphasizes simplicity and discipline in selecting investments, seeking to outperform the market over time.