Joel Greenblatt has outperformed his competitors by nearly 50% over 20 years with these 15 methods:

1. Do Nothing
“In long-term investing, doing ‘less’ often means getting ‘more’.”
2. Look for Bargains
“We want to get more value for the price we pay.”
3. Long-Term
“The market is very emotional, but over time, doing logical and systematic things actually works. The market will eventually price things correctly.”
4. Low Valuation
“The secret to successful investing is relatively simple: figure out the value of something, then buy it at a much lower price.”
5. Sit Back and Relax
“Long-term investing is like cooking rice with a lid on. After adding just the right amount of water and turning on the heat, sit back and let it cook itself.”
6. Make a Plan
“Picking stocks without knowing what you’re looking for is like running through a fireworks factory with a burning match. You might survive, but you’re still a fool.”
7. The Best Ideas Win
“Remember, the key to huge profits is the quality of your ideas, not the quantity.”
8. Invest Only in Obvious Opportunities
“I wait until an investment idea hits me like a hammer—heavy and undeniable.”
9. Capital Planning
“Think over a 5-year, 10-year, or even longer time horizon. Prepare your plan and asset allocation in advance. Invest some of your assets in the stock market—and stick with it!”
10. Magic Formula
“If I plug my estimates into the magic formula and the result is cheap, then that’s great.”
11. Do Your Homework
“Usually, stock prices behave like a rubber band. They stretch away from their value. If we’re good at valuing companies, the rubber band will eventually snap back.”
12. Invest Only in High-Confidence Ideas
“The most successful horse bettors (I guess also the least losing) are those who don’t bet on every race, but only when they have clear confidence.”
13. Diversify
“You need enough diversification to survive bad times or bad luck, so your skills and good processes have a chance to pay off in the long run.”
14. Short-Term
“Stock prices can fluctuate wildly over very short periods. That doesn’t mean the underlying company’s value changes significantly in the same period.”
15. Concentration
“By not putting all your eggs in one basket—say, a company that makes horsewhips, breast implants, pet stones, or fancy sweaters—you can diversify away the risk of any single company’s misfortune.”