Breaking up is hard to do
"Everybody's talkin' 'bout the new kid in town," the Eagles once sang. And so it goes. Sorry, Warren Buffett. I've learned a lot from you. But there is a new kid in town, and he's got a lot of good things to say. I've even updated my profile to say so. His name is Joel Greenblatt.

Don't be sad, Warren. You've had a great run, but you knew this day would come. You've got a sharp mind and have laid the foundation for so many investors today. But it's time to pass the torch. And I think Joel is ready to step in and take investors to the next level.

Why Joel? Well, I can't say it's because I know him. But I can say that I have been reading what he's been teaching, and I've been watching him on video as well. And there's lots to learn. (Check the second link down; it opens a Real Video file. Thanks to Fool Community member RedneckRoleModel for sharing the link on the Liquid Lounge board.)

Joel's books
At The Motley Fool, we've sung the praises of Joel's first book You Can Be a Stock Market Genius. It's about special-situations investing, including things like spin-offs, bankruptcies, arbitrage, and LEAPS. Spin-offs seem the most palatable subject to my simple mind.

But it was his next book, The Little Book That Beats the Market, that put him over the top for me. Investing in great companies at good prices is a fantastic way to go. You should know, Warren; you made it popular.

So many lessons in so few words
Warren, everyone loves to study your portfolio, especially when they get to speculate on what you might put in it next. But Joel's portfolio can teach us a thing or too as well. Here it is, straight from the latest SEC filing.

Trailing-12-Month P/E

Return on Invested Capital

American Express



Ameriprise (NYSE:AMP)









Live Nation (NYSE:LYV)






*Figure refers to return on equity.
Data supplied by Capital IQ, a division of Standard & Poor's.

On the surface, it looks as if Joel got enamored with the As, couldn't find anything in B through K, did well in the Ls, and found an 800-pound gorilla in W. But let's dig a bit deeper.

First off, I see four cool things about Joel's portfolio at Gotham Capital:

1. He practices what he preaches.
American Express, AutoZone, and Wal-Mart seem to be straight out of "the little book." These are great companies that generate good returns. And when you combine their P/E ratios with their returns, they look like great companies at good prices. Clearly, Joel has listened to you, Warren.

2. He sticks to his specialties.
Joel hasn't strayed too far from one of the boats that got him there, the spin-off: Ameriprise, from American Express, and Live Nation, from Clear Channel (NYSE:CCU).

3. He makes big bets.
With only six names in his portfolio, he's concentrating his efforts to get the biggest bang for his portfolio buck. It looks as though he understands that knowledge, not numbers, provides the best risk mitigation. Greenblatt is content to stick with a few equities. That's strikes a chord with me. He's saying, I'm not smart enough to be able to invest in 30 to 50 companies. What do you know! Neither am I! You have to respect that.

4. Value is value.
So what about Lear? Where does that company fit in? I would say it's probably one of those good companies at a very compelling price. That means Joel is willing to look everywhere he can to find what he considers a mispriced opportunity. So no matter what the situation, value is value.

The next Warren Buffett?
You see, Warren, Joel is doing exactly what you prescribed. And according to that video I linked to above, he's looking to keep from working very hard in the process. That's what's really sold me. That partner Munger of yours wants me reading three books a day and finding all of the interrelationships among the 10 learning points I come up with. Sorry, guys, but that's a lot of work, and my PlayStation 2 is calling me.

Don't worry, Warren. You don't need me to be one of your biggest fans anymore. You'll do just fine without me cheering you on. And you'll always have a special place in my book.

It's just time to learn lessons from other great investors who are willing to teach. Learning every day is a fundamental key to life, let alone investing.

Now, if you were to suddenly put out a podcast .

For more Foolishness on Joel Greenblatt:

Are you a value investor? Have you checked out what lead analyst Philip Durell is doing at The Motley Fool'sInside Valuenewsletter? Why not? Start up a free 30-day trial to find out how Philip is beating the market. Wal-Mart and AutoZone are among the newsletter's recommendations.

Retail editor and Inside Value member David Meier loves to study the investment gurus. That's because he knows he's not smart enough to do it all on his own. He does not own shares in any of the companies mentioned. The Fool takes its disclosure policy very seriously.