The latest issue of Graham & Doddsville is out. The feature interview is with famous value investor, Joel Greenblatt. Greenblatt says one of the first books he read is David Dreman Psychology and the Stock Market: Investment Strategy Beyond Random Walk. As I have pointed out on several occasions  and Greenblatt affirms, David Dreman was one of the first experts in behavioural finance. Greenblatt talks about short selling, and states that on the long side, he likes companies which are good asset allocators and generate large sums of cash flow. Greenblatt likes to buy these companies at a discount to intrinsic value. For shorting, he likes the exact opposite types of companies. Greenblatt seems to be saying the same thing about short selling, which Jim Chanos said recently./ There is no difference between the two, only the mistaken notion that they are somehow different.

Joel Greenblatt

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Graham & Dodsville 2012