Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations (Wiley Finance)
Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations is a must-read exploration of deep value investment strategy, describing the evolution of the theories of valuation and shareholder activism from Graham to Icahn and beyond. The book combines engaging...more
What I liked about the book:
Very simple and easy to read. It's about 280 pages and doesn't have too much superfluous writing. It's easy to read and understand.
Backed by empirical data that is a fairy large sample and is robust.
Provides a good understanding of the concept of mean reversion and its importance in investing.
What I did not like about the book:
Does not ...more
In the era of moat and growth investing, this book provides much needed empirical evidence from across various time periods and markets, on how Graham type of strategies still outperform almost all other approaches. A must read.
Warning: The book is like an academic paper with tonnes of surveys and data. Not a very fluid read.
Long version review:
Mean reversion in business is pervasive (can think of cyclical nature of businesses). High return businesses attract competition and drives down return to the point where the invested capital can no longer make any profit or even endure loss, some in the industry then choose to exit, and so the returns move ...more
In the second half, and the more interesting one, Tobias really gets to the heart of deep value investing by depicting cases of deeply undervalued companies from the real world and narrating how ...more
Losing stocks - those in crisis, with apparently failing businesses, and uncertain futures - offer unusually favourable investment prospects - deep value investing.
From 1983 to 2008 the net net strategy returned 35% pa versus 13% for the market.
Apple was a net net in 2002 at $2.5b market cap - $7 per share versus $7.80 cash. In ...more
The main point of Deep Value is reversion to the mean is a very powerful concept in investing. Its how Ben Graham's voting machine turns into a weighing machine.
This simple thesis is elaborated on throughout the book with lots of research along with fascinating real world examples of value investing successes.
A slight gripe could be made that more pages could have been devoted to the storytelling rather than technical analysis, but this still doesn't take too much away ...more
Deep Value demonstrates the case that low priced stock in terms of EV/EBITDA outperforms expensive stocks.