How to Trounce the Markets

(Bloomberg View) -- Joel Greenblatt, this week's guest on Masters in Business, knows as well as anyone the challenges of managing money with the goal of outperforming benchmarks. When he was running his concentrated, special situations portfolio at Gotham Capital, he generated compounded returns of 50 percent a year (before fees) for a decade. His investors were understandably unhappy when he returned their capital.

Greenblatt is now co-chief investment officer and portfolio manager at Gotham Asset Management LLC.  The fund he manages, Gotham Index Plus, is three years old, and was ranked the top-performing fund in its category (large-cap mixed) against about 1,200 peers. (It is, however, little changed so far this year). The fund is designed as a long-short hedge fund substitute with a flat 1 percent fee.

Greenblatt also has served as an adjunct professor at Columbia Business School since 1996, where he teaches classes on value and special-situation investing. He is the author of several books, most recently “The Big Secret for the Small Investor.”

His favorite books are cited here; our conversation transcript is published here.

You can stream/download the full conversation, including the podcast extras, on iTunesBloomberg and Overcast. Our earlier podcasts can all be found on iTunesOvercast and Bloomberg.

Next week, we chat with Patty McCord, the chief talent officer at Netflix for 14 years, and author of the new book, “Powerful: Building a Culture of Freedom and Responsibility.”

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”

To contact the author of this story: Barry Ritholtz at

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