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The Defensive Value Investor by John Kingham

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Chapter 6. Defensiveness and Value Combined

“What we’re trying to get at is buying above-average companies, high return on capital companies but only when they’re available at below-average prices.”

Professor Joel Greenblatt

Now that we have a range of defensive factors and valuation factors we can use them to quickly narrow down the list of companies we might be interested in.

This narrowing down of potential investment candidates is an important step because calculating a company’s defensive value factors typically takes just a few minutes (especially when using a spreadsheet), while the more detailed business analysis in Part 2 can take several hours. So the rational thing to do first is quickly review a company using the defensive value ...

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