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The Acquirer's Multiple: How The Billionaire Contrarians of Deep Value Beat The Market Excerpt
The Acquirer's Multiple: How The Billionaire Contrarians of Deep Value Beat The Market Excerpt
Multiple:
How the
Billionaire
Contrarians of
Deep Value Beat
the Market
TOBIAS E. CARLISLE
Copyright 2017 Tobias E. Carlisle
All rights reserved.
ISBN: 0692928855
ISBN-13: 978-0692928851
DEDICATION
Preface vi
Acknowledgments x
Notes 155
PREFACE
It is better to be lucky. But I would rather be exact.
Then when luck comes, you are ready.
Ernest Hemingway, The Old Man and The Sea (1952)
Zig?
Zig when the crowd zags. Zig with the value investors.
Zig with the contrarians.
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THE ACQUIRERS MULTIPLE
before it turns.
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THE ACQUIRERS MULTIPLE
Warren Buffett
Carl Icahn
Daniel Loeb
David Einhorn
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TOBIAS E. CARLISLE
ACKNOWLEDGMENTS
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xi
1. HOW THE BILLIONAIRE
CONTRARIANS ZIG
To beat the market you have to do something different
from the market.
Joel Greenblatt, Talks at Google, April 4, 2017.
They buy what the crowd wants to sell. They sell when the
crowd wants to buy.
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companys fundamentals.
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a great bet.
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well.
The ebbing and flowing of competitors cause mean
reversion at the business level, but what causes it at the
company level? How do undervalued and expensive stocks
get back to fair value? The answer is other investors.
Fundamental investors. Value investors.
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They buy at what looks like the worst possible time, such
as when profits are falling or losses are widening, and it
looks like this will continue until the crashing stock hits
zero. Its the worst-case scenario. But the stock is
undervalued, and it offers a wide margin of safety. Its time
to buy.
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THE ACQUIRERS MULTIPLE
Theyll also sell at what looks like the best possible time:
profits are high and rising quickly, and it looks like this will
continue forever. The stock price is soaring. Its the best-
case scenario. But the stock is expensive, and it offers no
margin of safety. Its time to sell.
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