Joel Greenblatt: Avoiding Value Traps

Falling into a value trap is one of the biggest risks value investors face. Unfortunately, there is no set framework for analyzing and discovering traps or even a fixed description of what constitutes a value trap. If you’re looking for value stocks, and exclusive access to value-focused hedge fund managers, check out ValueWalk’s exclusive value newsletter, Hidden Value Stocks However, according to Wall Street legend Joel Greenblatt, a value trap can be defined as a “low return” business or a company that is destroying value for shareholders. These businesses are often undervalued, and as a result, look attractive to value…