He attended The Wharton School at the University of Pennsylvania and earned his bachelor’s degree in business in 1979, graduating summa cum laude. The following year, he earned his Master of Business Administration.
His professional career has been prolific and well-studied. It began in earnest when he established Gotham Capital.
This now-legendary hedge fund was started with $7 million in 1985. Greenblatt directed the fund until 2006 and achieved estimated annualized returns of 40%.
This iconic investor known for developing the Magic Formula is a former chairman of the board of a Fortune 500 company as well as a best-selling financial author.
With all of this, though, can Joel Greenblatt’s net worth really be $500 million? We decided to find out.
Joel Greenblatt Gotham Capital
In retrospect, perhaps nothing contributed to Greenblatt’s net worth as much as his compensation from Gotham Capital.
While he has certainly been involved in ventures that compensated him handsomely, this hedge fund catapulted him to legendary status in the financial world.
It established him as an expert and opened many doors, including publishing opportunities that would also contribute significantly to his wealth.
Greenblatt presided over the fund he began with $7 million from 1985 to 2006. Much of that money was provided to him by Michael Milken, often referred to as the “Junk Bond King.”
The investing strategies Greenblatt applied were innovative for their era and produced Gotham Capital returns that handily beat most other investors and the market as a whole.
That level of success over a 20-year period remains among the best returns in the history of markets.
Joel Greenblatt Ventures
Value Investors Club
In 1999, after Greenblatt had published his first book and was still managing Gotham Capital, he co-founded the Value Investors Club with John Petry.
Membership is exclusive, prestigious and capped at 250 investors.
The goal of the club is to share investment recommendations among members, who may benefit from the best ideas.
Magic Formula Investing
Magic formula investing is the investing strategy that made Greenblatt successful and famous.
It is also the strategy he explains in great detail in his 2006 book “The Little Book That Beats the Market.”
This is the strategy that he employed with Gotham Capital, and it evolved over a 20-year period.
In a nutshell, the goal is to identify cheap stocks that provide a high earnings yield as well as high returns on capital.
It’s interesting that Greenblatt was willing to sell his recipe for success, but he was confident that widespread knowledge of the technique would not reduce its effectiveness.
He was right.
He also says in the book that the Magic Formula is not infallible. He goes on to say that its fallibility is a good thing because if it was unfailing, then the market would account for it and render it null and void.
Formula Investing
In 2009, Greenblatt established Formula Investing, which is an online money management firm.
This firm adheres to the Magic Formula strategies explained in “The Little Book That Beats the Market.”
The services are offered to individuals as well as registered financial advisors and even organizations.
The approach is disciplined and employs a stock-screening technique that is proprietary to the firm.
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More Joel Greenblatt Books
Greenblatt’s books may not be his primary source of wealth but certainly they have contributed handsomely to his overall wealth.
His great success with Gotham Capital, in particular, demonstrated an insight that was just not widely known at the time he launched his hedge fund.
“The Little Book That Beats the Market” is not a small contributor to Joel Greenblatt’s fortune but likely pales in comparison to his compensation from Gotham Capital.
It’s widely considered required reading for all investors, and it continues to sell so well that it has been amended, re-edited and rebranded as the “The Little Book That Still Beats the Market.”
Greenblatt has two other books that have also done very well for him financially.
“You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits”
It was released at just about the halfway point of his Gotham Capital run.
This book immediately distinguished itself — and provided insight into Greenblatt’s success — by concentrating on special situations that were ripe for investing rather than focusing on traditional value investing.
The book promises to reveal the lucrative opportunities that portfolio managers and other top investment professionals often miss.
You won’t be sold any snake oil in the book. To the contrary, it explores case studies where the market undervalued prospects.
These case studies cover bankruptcies, risk arbitrage, recapitalizations, merger securities, restructurings and much more.
“The Little Book That Beats the Market”
“The Little Book That Beats the Market” is recognized as classic literature of the financial world.
Numerous financial authors have referred to it in their own books, and it’s even used in many business curricula.
This book is perhaps best known for defining and making publicly available Greenblatt’s Magic Formula.
This is a book for everyone because the strategies are sound even if you’re just a modest investor with an eye on retirement.
Its widespread appeal has helped it sell hundreds of thousands of copies and contribute greatly to the author’s wealth.
Perhaps the most fascinating part of this book is when Greenblatt demonstrates why the strategies will continue to work even after everyone knows the secrets.
“The Little Book That Still Beats the Market”
Since then, it has continued to sell well and stand the test of time.
Greenblatt’s promise that the strategies would be sound even after becoming common knowledge had borne out.
So, four years later in 2010, the book was re-released with a new forward, a new afterword and additional research and case studies from post-2005.
This work was released with the modified title, “The Little Book That Still Beats the Market.”
The fundamentals remain the same: Seek out good businesses that are undervalued by the market at large.
Nothing has been removed; all of the information from the original book remains.
The new material is well worth the reader’s time, though, because it often examines the then-recent financial crisis and demonstrates how investors were able to use these principles to enjoy success even then.
“The Big Secret for the Small Investor: A New Route to Long-Term Investment Success”
Greenblatt’s ability to reach the average investor has contributed largely to his literary success.
With this book, he takes a look at the average person investing for the long term and considers strategies and the challenges they face.
Greenblatt promises an approach based on the core principles of value investing but contextualized within quantitative discipline and plain old common sense.
It remains a fascinating read for the new or intermediate individual investor who is asking questions about their investments.
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Joel Greenblatt Philanthropy
Greenblatt is more than an investor. He is also a philanthropist, who is perhaps best known for the contributions he has made to education in New York City.
In a particularly notable gift, he donated $2.5 million to a public elementary school in Queens.
That donation essentially amounted to $1,000 for each student who attended, and it helped P.S. 65Q rise from a struggling school to a great educational success in short order.
Greenblatt serves as an Institute for Student Achievement board member.
The Institute is recognized for its work helping public high schools become educational communities that prepare students for post-secondary education.
In 2006, he helped establish the Success Academy Charter Schools, which is a publicly and privately funded institution that educates 15,500 students annually.
Joel Greenblatt is also a founding member of Portfolios with Purpose. PwP is a nonprofit organization that hosts an annual virtual stock competition.
The event brings together amateurs as well as professionals. These professionals are known as Master Players, of which Greenblatt is one.
The entry fees collected are donated to a charitable cause chosen by the winner of the competition.
Joel Greenblatt Wife and Kids
Despite all of his success and notoriety in the financial world, Greenblatt has managed to keep most of his private life fairly private.
He is married to Julia Greenblatt. They have been married for decades now and continue to live in Port Washington, NY.
Joel and Julia have five children together: Melissa, Matthew, Jonathan, Rebecca and Jordan.
Joel has pointed to his children as the inspiration for all the philanthropic work he does with underprivileged students.
He and Julia also worked together to found the MRM Foundation, which is a humanitarian vehicle designed to give back to the community.
There’s little doubt that estimates of Greenblatt’s net worth are not only realistic but may even be a tad conservative.
His investment strategies have proven successful time and again. And they’ve evolved with the financial markets. Indeed, it’s believed that he’s never stopped investing.
His books continue to be best-sellers years after hitting book stands.
He also serves as an adjunct professor at Columbia Business School, a position he has held since 1996. With all of this, it’s no wonder that Greenblatt’s net worth is estimated to be around $500 million.
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Joel Greenblatt Net Worth
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