Joel Greenblatt's Greatest Investment

Firstly, I learned what a mutual bank, a mutual conversion, and a 2-step mutual conversion are. Moving on to some problems I found in the pitch/ need more clarification: - How did the deli man arrive at his base case that the MHC would sell at 90% of book value? - So what happens if the MHC sells at 80% of BV? 100%? 110%? And how much did the MHC eventually sell the equity for? - Is it in the existing shareholders' interest at all for management to delay the sale of the MHC's equity so that BV increases with retained earnings? - Why are the shares outstanding the same after the 2nd-step conversion? Initially, the remaining 53% shares were privately held by the MHC. Now that the MHC sells the shares to outside investors, so the share count should increase. Unless you mean that 115,638 in the first valuation overview are ALL shares of HCBK, including the 53% of shares owned by the MHC that are not traded on the public market. - I think there's a mistake in the pro forma P/B, it should be 58%, not 68%. Pro forma P/B = Stock price/ Pro forma BVPS = $11/ ($2,184,542/ 115,638) = 58% So what's the trade here? Buy HCBK now, because the MHC will sell the shares soon which won't dilute existing shareholders? And the thesis is that ROE, ROA, and the efficiency ratio are strong; with the influx of equity capital that management will get, they will continue to earn good returns on that capital? If so, then why is pro forma BV after the 2nd-step conversion relevant now? That pro forma BVPS is presumably only relevant for investors looking to buy the shares from the MHC in the future. If the trade is to buy HCBK now, only the present P/BV is relevant. The HCBK pitch aside, this was a great meditation on how alpha can come from anywhere and anyone. Equity research is a largely democratized game - analysts compete on public info and non-secret research skills (you don't need to go to an equity research university to learn to read a 10-K and model unit economics). So why do hedge funds only recruit from the traditional pipeline? And is it empirically true that alpha comes from anywhere - from as much deli men as hedge funds?