Hedge fund manager and investor Joel Greenblatt on Barry Ritholtz’s The Masters in Business podcast:

My definition of value is figure out what the business is worth and pay a lot less. It is not low price-to-book, low price-to-sales investing…. As Warren Buffett would say, value and growth are tied at the hip. Growth is part of value…. The reason I’m a value investor, according to our definition, is stocks are actually ownership shares of businesses that you value and try to buy at a discount, they’re not pieces of paper the bounce around that you put Sharpe ratios and Sortina ratios and use computer simulations to balance your portfolios or whatever it is. Basically, they are ownership shares of business that you value and try to buy at a discount. So it’s certainly possible that the market does not reward my valuations even if I’m right over the next two years, but that doesn’t mean we’re going to stop doing what we’re doing. That’s what stocks are: ownership shares of businesses, and that’s very fundamental to the way we look at everything.

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