The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market

by Tobias E. Carlisle

Operating earnings is a measure of the income flowing from a business’s operations. It excludes one-off items like sales of assets and legal settlements.

For nonindustrial businesses like financials, such as banks and insurers, book value is the better single measure.

discounts. It breaks the received wisdom of the market and academia that higher returns mean more risk.

distress. No company ever won with too much cash, but many have sunk with too

much debt.

Companies that own science experiments or toys in search of a business model are for speculators.

Treat a share as an ownership interest, not a mere ticker symbol.

5. Be wary of high earnings growth and profits.

But moats are harder to find and easier to cross than most investors realize.

The best place to find future growth and profit is in businesses currently enduring hard times.

rules. Ideally, we should write them down and strictly follow them.

No strategy has ever failed in theory. Almost all have failed in reality.

“tracking error.” It

Remember, it’s more likely you are wrong and the rest of the market is right.

The effects of compounding take a long time to become observable. But interest on interest or gains on gains become significant over the long term.