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

by Tobias E. Carlisle

$10,000 Invested in Acquirer’s Multiple, Magic Formula, and S&P 500 (1973 to 2017) In our $50 million market-cap test, the Acquirer’s Multiple beat the Magic Formula. Both beat the S&P 500. The Acquirer’s Multiple compounded at 18.6 percent yearly. The Magic Formula managed a respectable 16.2 percent yearly. That small advantage to the Acquirer’s Multiple made a big difference over the full forty-four years. A theoretical $10,000 invested in each strategy became $18.7 million for the Acquirer’s Multiple and $7.6 million for the Magic Formula. Market Cap $200 Million And Above $10,000 Invested in Acquirer’s Multiple, Magic Formula, and S&P 500 (1973 to 2017) In our $200 million market-cap test, the Acquirer’s Multiple also beat the Magic Formula but by a smaller margin. Again, both beat the S&P 500. In the larger universe, the Acquirer’s Multiple compounded at 17.5 percent yearly. The Magic Formula averaged 17.2 percent annually. That tiny advantage to the Acquirer’s Multiple made a little difference over the full forty-four years. A theoretical $10,000 invested in each strategy became $12.6 million for the Acquirer’s Multiple and $11.2 million for the Magic Formula. Market Cap $1 Billion And Above