Greenblatt portfolio fund. On balance, I'd say it could be worth a shot for part of a portfolio.
On the one hand, why pay someone for something that seemingly, you can do yourself? That would be so if we knew exactly what the formula was. We know it's 1/pe vs. roic, but the definition of roic is not specified by the author (or wasn't when the book came out). Still, imo, pe vs. roe is just as good.
The benefit with these guys is that they do the work - picking and holding and selling, and that they follow some approach that is understandable and consistent (assuming they pick stocks from the quadrant of high roic and high 1/pe). Yes they'll use judgment to select from among low cap/high cap, domestic/foreign, etc., but it should all be encased within the quadrant (the criteria). To me, this beats most mutual fund managers and people here who claim to be value investors but you can not understand how they determine that a stock is undervalued. As for example with mutual fund managers who say they have quant skills in a black box; just trust them. Or fund managers who ask you to invest with them because the value they provide is meeting with and evaluating the companies' corporate managers (access to whom, individual investors don't get). |
