Is there a link between Joel Greenblatt and Jim Farley? Not a public one. In the SEC filings, company releases and major coverage I checked, there is no joint venture, no documented meeting and no shared project between the famous value investor and Ford’s chief executive.
Yet the two names belong in one conversation. One wrote a famously simple rulebook for finding cheap, high-quality businesses. The other is running one of the most closely watched industrial turnarounds in America.
That is the useful story, and it is far better than a rumour. Apply Greenblatt’s thinking to Farley’s Ford and you get a sharp, honest question: is the Detroit giant a hidden bargain, or a classic value trap?
The numbers from Ford’s second-quarter 2026 results make the question hard to dodge. Revenue was $48.3 billion. Adjusted earnings before interest and tax (EBIT) rose 17% to $2.5 billion. Management then lifted its full-year adjusted EBIT guidance to a range of $10 billion to $11 billion.
Yet the electric-vehicle unit, Model e, still lost $919 million in the quarter. And Ford says it has recalled roughly 12 million vehicles this year.
That is the tension a value investor loves and fears in equal measure. Powerful profit engines sit beside expensive bets. Pricing strength sits beside quality headaches.
In this guide you get the facts first: who each man is, what the Magic Formula really measures, and what the latest Ford figures show. Then comes a balanced bull case, a hard-nosed bear case and a practical checklist you can reuse on any company.
One caution before we start. This is analysis, not financial advice, and I am not a financial adviser. Treat every figure as a starting point for your own research.
Who Is Joel Greenblatt? The Investor Behind the Magic Formula
Joel Greenblatt is a US investor, author and teacher. He was born in 1957, studied at the Wharton School of the University of Pennsylvania, and was drawn to the markets by the ideas of Benjamin Graham.
In 1985 he launched Gotham Capital. Widely repeated figures put its returns at around 40% a year before fees between 1985 and 2005. Those numbers are historical, self-reported and gross, so they should be read as a reputation rather than an audited promise.
Gotham reportedly returned outside investors’ money by the mid-1990s, which only added to the legend. Greenblatt also co-founded the Value Investors Club, an online community where analysts pitch ideas, and taught value investing as an adjunct professor at Columbia Business School.
He is best known to the public through two books. You Can Be a Stock Market Genius explored special situations such as spin-offs and restructurings. The Little Book That Beats the Market turned his thinking into a rule-based method for ordinary savers.
Today his firm, Gotham Asset Management, files quarterly 13F reports with the US regulator. The filing for the second quarter of 2026 shows roughly 1,790 long positions worth about $43 billion. That breadth tells you something important: Gotham is a systematic, diversified manager, not a fund that stakes everything on one chief executive.
The Magic Formula in Plain English
The Magic Formula ranks shares on just two measures.
The first is earnings yield: operating profit (EBIT) divided by enterprise value, which is market value plus net debt. Higher means cheaper.
The second is return on capital: EBIT divided by the money tied up in working capital and fixed assets. Higher means a better business.
You rank every share on both, add the two ranks together and buy the best-scoring handful. In the original version you held roughly 20 to 30 companies for a year, then sold and repeated. The first version screened out financial companies and utilities, and ignored very small firms, with a market-value floor of around $100 million.
The book reports a back-test from 1988 to 2004 in which the top 30 shares returned 30.8% a year, against 12.4% for the S&P 500. That figure is widely quoted, including by Validea and Value Research.
Two caveats matter. A back-test is not a live result, and Greenblatt himself stresses that the method can trail the market for stretches. The real challenge is behavioural: it is painful to keep buying out-of-favour shares while the crowd chases the latest favourite.
Who Is Jim Farley? The Car Enthusiast Running Ford
Jim Farley, formally James D. Farley Jr., has been president and chief executive of Ford Motor Company since October 2020. He succeeded Jim Hackett, and Ford announced the change in August 2020.
His roots in the industry run deep. The Automotive Hall of Fame notes that his grandfather was employee number 389 at Ford’s Highland Park plant. Farley himself started at Toyota in 1990, rose to group vice president and general manager of Lexus, and was involved in launching the Scion brand.
He joined Ford in November 2007 as head of global marketing. From there he led Lincoln, ran Ford of Europe, Middle East and Africa between 2015 and 2017, headed new businesses and strategy, and became chief operating officer before taking the top job.
He holds an economics degree from Georgetown University and a management degree from UCLA’s Anderson School. Beyond Ford, company filings show he was nominated to the Harley-Davidson board in 2021, and he sits on the board of McDonald’s. He also chaired a $40 million capital campaign for the Pope Francis Center in Detroit.
His signature move is the Ford+ plan. Ford was reorganised into three units: Ford Blue for petrol and hybrid vehicles, Ford Model e for electric vehicles and software, and Ford Pro for commercial customers. Farley took on the additional title of president of Model e in March 2022.
That structure matters to investors. It forces Ford to show, line by line, which parts of the business earn money and which parts burn it.
Is There a Real Link Between Joel Greenblatt and Jim Farley?
Here is the straight answer. I found no public record of a partnership, joint appearance, interview or advisory role connecting Joel Greenblatt and Jim Farley.
Be wary of any website that claims Greenblatt ‘bet on Farley’ or that Farley ‘follows the Magic Formula’. Without a filing, a transcript or a named interview behind it, that is speculation dressed as fact.
What you can verify is narrower. Gotham files a 13F, and anyone can read it on the regulator’s database to see whether Ford shares appear and in what size. I did not confirm a Ford position in the filings I reviewed, and a large, rules-based portfolio of this kind would naturally hold hundreds of companies without any view on a single chief executive.
The honest connection is therefore intellectual rather than personal. Greenblatt supplies the questions. Farley supplies the case study.
Putting Ford Through the Greenblatt Lens
I have not run the formal Magic Formula screen on Ford, and I would not trust a stranger’s screenshot of one. What I can do is show why Ford is an awkward fit, and why that is revealing.
1. Ford is capital-hungry. Car makers tie up vast sums in plants, tooling and inventory. That drags down return on capital, the second pillar of the formula.
2. Ford owns a finance arm. Ford Credit lends to customers and dealers. Greenblatt’s original screen excluded financial companies, so a blended manufacturer-and-lender does not sit neatly in the test.
3. Earnings are lumpy. Ford’s second-quarter release showed adjusted EBIT of $2.5 billion but a net loss of $1.3 billion once special items were counted. A screen that leans on one year’s operating profit can be misled in either direction.
4. The cheap-looking part may be the unloved part. Value investors often hunt where sentiment is poor. Ford carries recalls, tariffs, commodity swings and an electric-vehicle bet that has not yet paid off.
The lesson is not that Ford passes or fails. It is that a screen is only the start. Greenblatt’s own work in special situations rewarded investors who read the detail behind the headline number.
Farley’s three-unit structure helps with exactly that job. Instead of one blurred profit figure, you can judge the engine (Ford Pro), the cash cow (Ford Blue) and the experiment (Model e) separately.
Ford’s Scorecard Under Farley: The Q2 2026 Numbers
Ford reported second-quarter 2026 results on 28 July 2026. The table below uses figures from Ford’s own press release and earnings call, as reported by CNBC and other outlets.
| Measure | Q2 2026 result | What it tells a value investor |
|---|---|---|
| Group revenue | $48.3 billion, down 4% | Sales slipped on lower aluminium supply and retired models |
| Adjusted EBIT | $2.5 billion, up 17% | Mix and pricing are doing the heavy lifting |
| Adjusted EPS | 42 cents vs 35 cents expected | A clear beat on the headline measure |
| Net result | Loss of $1.3 billion | Special items still distort the reported picture |
| Ford Pro | $1.7 billion EBIT on $17.8 billion revenue (9.7% margin) | The commercial unit is the profit engine |
| Ford Blue | About $1.1 billion EBIT, up 72% | Trucks, Bronco and off-road demand are paying off |
| Model e | Loss of $919 million, a 31% improvement | Losses are narrowing, but remain large |
| Full-year adjusted EBIT guidance | $10 billion to $11 billion | Midpoint raised by $1 billion |
| Full-year adjusted free cash flow | $6 billion to $7 billion | Cash generation is the key test of quality |
A few details deserve emphasis.
First, Ford Pro’s profit fell 26% year on year in the quarter, mainly because of a disruption at the aluminium supplier Novelis, which management estimates will cost about $1.5 billion across the year. That is a supply problem rather than a demand problem, but it is real money.
Second, Model e is still expected to lose about $4 billion this year. That figure includes roughly $1 billion of extra spending on the Universal EV platform and Ford Energy, mostly in the second half.
Third, Farley said the first vehicle on that platform, at around $30,000, will reach customers in 2027. If it succeeds, it could change the economics of the whole electric unit. If it stumbles, it will be an expensive lesson.
The Bull Case: Why Farley’s Ford Could Be a Bargain
Optimists start with focus. Ford is concentrating on what it does best: trucks, vans, off-road vehicles and commercial fleets. Those are the segments where it has loyal customers and pricing power.
The second argument is software and services. Ford Pro reports more than 900,000 paid Pro Intelligence subscriptions, up over 20% on the year. Across the group, paid software and physical services subscriptions grew about 50% to 1.6 million. Recurring revenue is exactly the type of earnings that deserves a higher valuation.
Third, there is improving discipline. Management reconfirmed plans to cut about $1 billion of material and warranty costs this year. Farley told analysts the number of recalls is down roughly 40% on last year, even though about 12 million vehicles have been recalled so far in 2026.
Fourth, the cash numbers are healthy. Adjusted free cash flow guidance of $6 billion to $7 billion gives the company room to invest, pay dividends and absorb shocks.
Finally, Farley is a genuine enthusiast with decades of experience at Toyota and Ford. Investors often pay little attention to that, yet in a product-led industry, a chief executive who understands the product is a real asset.
For a Greenblatt-style thinker, the bull case rests on one idea: the market may be pricing Ford as a cyclical car maker while an increasing share of its profit comes from commercial and recurring sources.
The Bear Case: Why It Could Be a Value Trap
Sceptics begin with the electric-vehicle bet. A $4 billion annual loss is hard to wave away, even when it is shrinking. Every quarter of delay means another large cheque.
Second comes quality. A recall count of around 12 million vehicles in a single year is a serious reputational and financial burden, whatever the improving trend. Warranty costs are a silent tax on profit.
Third is dependence on a few supply chains. The Novelis episode showed how one supplier problem can knock a quarter of profit out of the most valuable unit.
Fourth, the reported results remain noisy. A net loss alongside rising adjusted profit invites a fair question: how much of the ‘adjusted’ story will turn into cash that shareholders can actually keep?
Fifth, cyclicality. Vehicle demand rises and falls with interest rates, consumer confidence and tariffs. A downturn would test every promise on the page.
The bear’s strongest point is the classic value-trap warning. A share can look cheap for years because the business never earns enough on the capital it consumes. If Ford’s return on capital stays modest, a low valuation may simply be fair.
A Greenblatt-Style Checklist for Watching Ford
You do not need his fund to borrow his habits. Here are five questions to ask each quarter.
- Is operating profit rising on a steady base? Compare adjusted and reported results, and read the list of special items.
- Is return on capital improving? Ford’s own measure of return on invested capital is a useful cross-check on any screen.
- Is free cash flow keeping pace with profit? Profit that never becomes cash is a warning sign.
- Are Model e losses shrinking faster than spending grows? Watch the 2027 launch closely.
- Is the recall trend moving the right way? Fewer recalls, and cheaper ones, would support the quality story.
Write the answers down. Greenblatt’s method works because it replaces mood with a repeatable process.
What Everyday Readers Can Learn From This Pairing
The pairing of Joel Greenblatt and Jim Farley teaches three practical lessons, whether or not you ever buy a Ford share.
Cheap is not the same as good. The formula asks for both a low price and a high-quality business. Ignore either half and you risk a trap.
Process beats prediction. Nobody can forecast the 2027 launch reliably. A written checklist keeps you steady when headlines swing.
Read the segments, not the slogan. Farley’s three-unit structure is a gift to analysts, because it reveals where profit actually comes from. Apply the same habit to any company you own.
Also remember diversification. Even Gotham spreads its money across well over a thousand names. If an investment professional with a famous track record does not stake everything on one story, you probably should not either.
The Verdict: Bargain, Trap or Neither?
So what does the evidence say? Ford under Farley looks like a business improving from a hard base, with real strengths in Pro and Blue and a costly, unproven experiment in Model e.
Whether that makes it a bargain depends on price, and price changes daily. I will not pretend that a single article can settle it.
What can be settled is the headline question. Joel Greenblatt and Jim Farley are not publicly connected, and anyone who claims otherwise should show a source. The value comes from the lens, not the legend.
Use the Magic Formula’s two questions on any company: how cheap is it, and how good is the business? Then keep checking whether the answers still hold.
Frequently Asked Questions
Are Joel Greenblatt and Jim Farley connected? I found no public record of a partnership, meeting or advisory role between them. They are linked only by analysis: Greenblatt’s investing framework can be used to study Farley’s turnaround of Ford.
Does Joel Greenblatt own Ford shares? His firm, Gotham Asset Management, files a quarterly 13F with the US regulator. Check the latest filing for any Ford position and its size. A holding in a large, rules-based portfolio would not signal a personal endorsement of Farley.
What is the Magic Formula? It is a rule-based method from The Little Book That Beats the Market that ranks shares by earnings yield and return on capital, buys the best-scoring group, and rebalances yearly.
When did Jim Farley become Ford’s chief executive? He took over in October 2020, after Ford announced the succession of Jim Hackett in August 2020.
Is Ford a good value investment right now? That depends on today’s price and your own goals. The operating story is improving, but electric-vehicle losses, recalls and cyclicality remain real risks. This article is not financial advice.
