"[I think] one of the keys to investing and one of the things I said in the book [is that] we're very good at buying, not so great at selling. But look down, not up, when making a big investment—meaning, how much can we lose?" --Joel Greenblatt (interview with Jim Grant on Real Vision)
"Why won't we do momentum investing? The reason for that really is that—let's say it didn't work for the next two years. It could be that it's just cyclically out of favor—it works over the long time, we just need to be patient and it will work. Or it could be that there's plenty of data in research papers and computers and ability to crunch numbers, and the trade now—and it's not so hard to figure out a stock used to be down here and now it's up here and it's got good momentum—and the trade's become crowded, it's degraded and that's why it doesn't work over the next two years. Two years from now, I wouldn't know the answer to that question. Is it just cyclically out of favor momentum or has the trade become crowded and degraded?... But if we're looking at cash flows and valuing businesses just like we value a house...that's what we do. It's possible that that kind of analysis doesn't work over the next two years, but I'm not going to stop doing what we're doing because it's the difference between causation and correlation. Momentum has correlated with good returns in the past.... What we look at is causation, and that's valuing businesses and the way we value businesses is looking at the cash flows." --Joel Greenblatt (interview with Jim Grant on Real Vision)
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