Fellow value investing blogger, Shai Dardashti, has secured a meeting with Joel Greenblatt the author of The Little Book That Beats the Market. In preparation for the meeting, he has asked the community for questions. Here are the questions that I sent along to Shai to ask Mr. Greenblatt:
1. What do you think of going private transactions in this post Sarbanes Oxley Act environment that didn’t exist when you wrote “You Can Be A Stock Market Genius”? Do you think it is profitable for small investors to participate in these risk arbitrage opportunities associated with the reverse split/fractional shareholder cash outs used for some going private transactions? How should investors be evaluating which of these opportunities are good and which ones are bad? 2. The Magic Formula produces an interesting list of companies. Some of the profitable companies on this list however don’t appear to have sustainable competitive advantages and their high profits may be temporary. When you personally use the results of the Magic Formula do you try to sort out which companies have sustainable competitive advantages versus the ones that don’t? What other criteria do you use to select which companies to invest in from the result of the Magic Formula?
I wish Shai the best of luck with the interview. I look forward to reading about his experience soon. I’ll post a link to it when Shai posts his notes about the meeting with Joel Greenblatt.